Approximately three and a half years ago, we facilitated a leadership breakfast with top leaders on a panel. At the time the worldwide economic crash had just unfolded and most so called experts were speculating about how long we would be subjected to it. At the breakfast most of the leaders present were fairly optimistic and projected a positive, short term outlook. Then it was Alan Knott-Craig, outgoing CEO of Vodacom’s turn to comment. He confidently stated we were looking at a six year slump, at least. It seemed rather out of sync and pessimistic at the time. But, today, almost four years down the road the picture has changed. It sure seems he was correct.
This is Alan Knott-Craig, who another leader that has associated with him over the last couple of years describes as, “very energized and motivated, alternate thinker who pushes boundaries”.
He is no doubt a legend on the South African corporate landscape, and probably needs no introduction as the founder of Vodacom and arguably the father of the cell phone industry in SA. From the first of April he will move into the CEO seat at Cell C, a move most would describe as surprising, or at the very least, ‘interesting’, for obvious reasons.
For the last three or so years, since handing over the baton to Pieter Uys at Vodacom, he has enjoyed an interesting run as Non-Executive Director for organisations like Nedbank, Murray & Roberts, CSIR and others. He also traveled all over with his lovely wife, enjoying his passion for photography, nature and genealogy work. In short, the outcome of this period is, surprisingly, a very positive outlook towards the potential South Africa has to be a successful country.
He joined the Nedbank Board in January 2009, as the entire banking industry started disintegrating all over the world. His first lessons in banking were not about how banks work but about why banks crashed. Through all this he discovered how solid our banking industry was.
What he took away from serving on the Murray & Roberts board position is that “our huge engineering capacity in this country is much more than I ever thought”. The challenge though is it’s dependability on government.
Knott-Craig was also blown away by what people are doing at the CSIR, from drug technology to Nano-technology, which could be close to the best in the world.
These and other experiences instilled a confidence that we have all sorts of capacities in South Africa to make this place a success. In his own words:
“Our capability to do things in this country extends way beyond our imagination”
Of course the challenge is to leverage all this capacity, in a united and effective way, and the catalyst is most certainly effective leadership.
His reason for taking on the Cell C job may not be as mysterious as many speculate. One of the reasons for leaving the pressures of the fulltime Vodacom CEO position was to restore his health after he had suffered a few heart attacks along the way. He also left because “I wasn’t having much fun anymore. Vodacom was big and doing well”. It took him about two years to return to better health, which happened while he had a restraint of trade anyway. During the second half of 2011 he started developing an appetite for taking on a challenge again. And, he adds “the only area I really understand is telecoms”. He became quite frustrated sitting on boards as a non-executive, because when the problems in a company became clear he wanted to go and fix it.
Knott-Craig is almost sixty, which meant if he didn’t go and do something soon it would have been too late. He had no company in mind, but after a timeous, though per chance coffee with the Chairman of Cell C, whom he has known for years, things unfolded. It was mentioned that they didn’t have a CEO anymore, which he did not know. Knott-Craig offered his services; he became part of the search process and soon after met with the shareholders overseas. Now he is ready to make history; to “have some fun”, as he puts it.
His estimations are that it would take about three years to fix Cell C. A strong focus will be to put management in place that can survive the next ten years. His opinion is that Cell C has given themselves a raw deal by placing too many expatriates in senior positions: “When people from other countries come to work in this country they leave their families behind. So now you have this disconnect. They want to see their family and often find themselves outside the country.”
Too many expatriates in a management team are not advantageous to an organisation, in the long run, according to Knott-Craig. Much of business in SA is built on relationships. As he says: “If you don’t have relationships at the top of the company, what do you have?” The danger is then that one falls into the trap of doing things the way it is done in other parts of the world, but it does not necessarily work here. In short, with relationships one has a better chance.
In his view management must be here in South Africa 24/7, three hundred and sixty five days a year. He is not totally opposed to expatriates, but it should be the exception, when the skills are not available locally. He believes “you can’t establish leadership in a company where there are cultural barriers and where there is a discontinuity in time”. One can perhaps do this in Vodacom or another big machine like it, but not in a Cell C, or a weak company where there is a lot of fixing to do.
Knott-Craig has paused his active leadership for a few years, which has given him time to think about how he would do it differently, if at all. He trusts that he has learned to listen a lot better, because of his involvement in companies where he did not know the game. So he had to learn, by listening.
Further to this he learnt to pick the people he listened to. He says: “The difficulty some leaders face is that they try to listen to everybody. You should pick the people you listen to”.
Knott-Craig has learnt to be less aggressive as well; to be just a little more gentle and add a tad more diplomacy to how he approaches people.
He is very aware of the difference between starting a company from scratch and taking over one like Cell C. In the former, the founder almost naturally grows up to be the ‘father’ of the business. In the case of the latter it is so different. According to him Cell C employees would “want some energy; they want to feel confident; they want to feel like they are going somewhere; they want to feel like they are going to be someone; they want all the things that we all aspire towards, whether we are in a leadership position or not; they just want to feel good about themselves; they want to believe again – in their leader, in the company, in themselves. They don’t want to feel like losers, a hopeless third.” Knott-Craig absolutely believes he can achieve this.
Getting the basics right will be a priority. He adds: “We cannot have a company whose game is cell phones, but they don’t have a network that is competitive. So we have to build a competitive network. They are busy doing it, but there is a way to go.”
In a way Knott-Craig’s greatest challenge will be to ‘outsmart’ himself. When he sat on the other side of the fence they made it difficult for their rivals to compete, which was part of the competitive game. How does he now reverse some of what was put in place in the past?
The challenge for Vodacom, MTN and others is that Cell C’s experienced incoming CEO has had time to think deeply about the future. Some even believe Knott-Craig is contemplating a war that may destroy the industry. Of this he comments: “I would never do that. What a terrible thing to destroy the one thing that I built in my life. Would I disrupt the industry, or rather business models? I have to. I must just get my timing right. I have to disrupt entrenched business models that have lasted for twenty years.” He has spent a lot of time thinking how they can do this.
According to him this industry is a numbers game, so Cell C has to increase their market share. He clarifies: “There is a point at which you become self-funding, and that point depends on revenue, and revenue depends on market share. So if you can’t increase your market share of revenue, you can’t up your game. And, when you increase your market share of revenue, somebody else decreases theirs.” And of course Knott-Craig reminds us that while the market may be saturated with voice product, it is not the case with data, which in his view can never be saturated.
He is excited about the opportunity to physically change something, even in the unlikely event of failing. Being in control again is also attractive, though I believe this is not as attractive as it may have been years ago. As he says, “even if you fail you would have helped the world move forward”. He adds: “What is failure anyway. It is a personal thing for people. Get over it. One of the great things about being older is that you get over things.” He also looks forward to the people. During the first few weeks he just wants information, to listen and to barely hold any meetings.
At this stage success at Cell C will be when they can self-finance the business; when they are no longer dependent on loans and shareholder funding. On top of this Knott-Craig believes they can become the number one cell phone company in time, whether organically or otherwise.
It is clear that the Telecommunications space is going to be a very exciting one to watch over the next three years.
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