I placed Grant Pattison the CEO of Massmart on the Leadership Platform last week to give us some insight into the historic Massmart / Wal-Mart journey, including some leadership, life and personal lessons learnt along the way.
How have you managed the intense stress of negotiating a deal with Wal-Mart and navigating the high profile competition authority’s process without falling apart? I haven’t engaged any specific stress management techniques, other than taking a bit more time off. The greatest stress reliever was being able to count on the personal support of those closest to me.
What has been the biggest challenges in leading a company that is on the brink of huge change, but is also at the eye of the storm, that is an intense national debate on the merits of the deal? Mart has been great partners and has been a pleasure to work with.
How has this experience changed your perspective on being a CEO that simply has to lead his organisation, without such an extraordinary distraction? It seems much easier. For example having to deal with an underperforming business is hard, but not as hard as what I have been through. It certainly changed my perspective of running a business. And, to top it all off I haven’t even experienced the worst of it, which would be going through this entire experience and then the transaction fails. That has to be just another level of complexity. I now have to deal with the complexity of implementing the deal.
Following this experience, what is your view of South Africa’s economic and business landscape, against the backdrop of politics in South Africa? My view is the current place we find ourselves in politically is the politics of appeasement. We have the alliance and the complexities of how it remains together and this dominates our political landscape. As far as I can tell we have Ministers of such varying political views that they tend to act completely independently. This is my observation. The Minister in charge of a particular department is really acting according to his own ideology. There does not seem to be a national ideology.
I have had to hold discussions with a lot of people I almost agree with nothing on. Me, a white male, CEO of a big retail company, discussing issues with individuals that have a communist, working class, union background. What were we going to agree on? But you still got to learn to respect that that persons views are created by their own life experiences and what they want out of this world is just as valid as what I want out of this world. But we just don’t agree. Now, how do we sit in a room and have a discussion? I found myself saying quite regularly to people: “You must respect that I have a completely different world view.” For example when the union said to me “we would like you to agree to reduce the apartheid wage gap” I had to say to them “you must understand that the inequity in society was primarily driven by capitalism. You label it apartheid, but from my perspective capitalism drove the wage gap and apartheid made it look black and white.” At that point our views are so divergent that it is impossible to agree. What do you do now? I also found myself often saying: “Let’s not get upset, I just disagree with you. Now let’s move on.”
Did this process open your eyes more to how difficult it is to lead in South Africa? Certainly that’s what I felt at one point. I would go off to Wal-Mart thinking that they would be put off, but they did not see it this way. I discovered they see a world view with places like Russia, China, India or Columbia. So I actually think we have a relatively normal society. Yes I was surprised by the Department of Economic Developments aggressive intervention and I personally still think that was not handled as well as it could have been. In context everything else though was absolutely fine. The process was portrayed as having more setbacks than there actually were. On reflection the one real setback was the delay of the hearing date by six weeks.
What advice would you give a leader that is about to enter the same process? What should he do, not do, do differently? This is a difficult question because every deal of this nature is so different. But I would warn the leader that people say really radical things. What I learnt to do was to rely on the fact that in the end the law is the law and the radical interpretation of the law is generally not accepted. And so you have to learn to just calm down and trust it will get reasonable. Newspapers often write the radical interpretations.
In short, make sure you understand the law, intimately and then ignore the radicalism. Understand that the positive and the negative will balance out in the end. Stick to the law and trust the process. Accept that your opponents have a right to be your opponents and there is no need to publicly bad mouth them for this. They just disagree with you.
What hasn’t been said to South Africa about this historical deal? What is the authentic message, without PR spin? What we are doing is being driven by people who believe one hundred percent that what we are doing is in the best interest of the country, the continent and the company. We may be wrong, we may be right, but don’t doubt our motives. We believe it to be a good thing. There is no big conspiracy theory.
How lonely was this journey? The entire process was exceptionally complicated, with 50 to 100 advisors from all spheres giving me advice. I today still can’t explain to anyone exactly what happened, because I was in contact with so many incredible professionals pumping me with information and advice, even people outside of the transaction phoning, telling me things I couldn’t share with anyone. I quickly became the only person that was involved with every part of the transaction and on top of that I couldn’t even explain everything to everyone.
In my personal life I didn’t want to talk about the deal anymore, which was difficult on others. But, it was impossible for them to get the context because it was too complicated. Still, it was exceptionally exciting, exhilarating, and stimulating.
What have you learnt about yourself? I am stronger than I thought. I have been able to live with people disagreeing with me, much better than I thought. One of the burdens of asking for someone’s advice is you pretty much have to take it or you certainly can’t ignore it. Because of so much advice I was always completely disagreeing with someone. I have been fine with that and they have been fine with that and my relationships have been fine.
I have also learnt that I am not as good at dealing with stress as I perhaps thought I would be. Sleeping was hard. I improved through the process and by the end I was better. I had to also deal with two time zones, being blasted with information right up to bed time. I had to learn to not take the email or read the sms. I had to learn to prepare myself for sleep. I realised, if you can’t learn to go to sleep, with unanswered questions in your mind, that appear to be unanswerable, you will not make it.
What has this done for your confidence levels? It has built my confidence. Firstly, who gets to lead a great company like Massmart. Very few people have such an opportunity. And then, who gets to be bought by the world’s biggest company? It is an enormous privilege! I have obviously collected experiences that very few people get to collect, in the world. But I also realise that there is so much luck in such a process. I can point to hundreds of things that worked in our favour that had nothing to do with us. But, with success comes more confidence.
What have you learnt about human beings inside such a unique and historical situation? Two things – one good and one bad. My trusted Lieutenants, some of them in the business and some outside the business stepped up to the plate like you cannot believe. If you leave space for people to advise you they will. They performed at levels that I did not think they were capable of.
The bad thing about humans, more specifically our opponents of the transaction is that there is a horrible inevitability that if there is a point of leverage they will use it, regardless of value or principle. They cannot stop themselves. Everyone leverages their position. Humans cannot help themselves. And they will come up with any rationalisation to justify it. The union’s behaviour was inevitable. The government’s behaviour was inevitable, because they could. And all parties interpreted the law to their own benefit and interests.
What I now know is that I can rely on that. And by the way, it has given me some comfort because I am not disappointed any more. There is a book written about this – “The selfish gene”. The Author writes that human society lives under the dependency that we will all act in our own self interest, all the time. That’s what I have learnt about humans. Also, at some point one realises that ‘I must also be doing this; everyone can’t be doing this and I am not.’ So I am no longer disappointed.
I also learnt that too many human beings make their minds up before they start talking. So our ideology holds us all back. The unions immediately formed an anti-Wal-Mart coalition. Now, how does one come to any agreement on Wal-Mart buying Massmart with the anti–Wal-Mart coalition?
After all of this I actually find that I like the people I was in opposition with. If I saw them around I would actually sit down and have a cup of coffee with them because we have been in the trenches together.
What has been driving you and what drives you today? You stand to make a lot of money, but what actually drives you? I always had a belief that if Wal-Mart came to South Africa they had to join with us. My primary motivator was that I did not want to compete against them and I felt they were coming. They did not tell me. My primary motivator today is that it is just so exciting! We are part of making history. Will it be good or bad history? I don’t know. To be part of something that essentially changes the course of history is very exciting. There will be pre – Wal-Mart and post – Wal-Mart. It’s a pivotal point.
Your biggest leadership challenges now are what? Firstly a personal challenge of how to deal with the natural let down of the high. I have been living in this stress induced high for nine months. Personally I therefore have to re-energise, re-discipline myself and not sit back on my laurels, while recognizing that I do need a break. So I have to balance these two things.
From now on the challenge is one of merging two cultures. I too often forget that I am very comfortable with Wal-Mart because I have been in the trenches with them. But, most people in the company haven’t. Therefore, under the pressure of trying to extract value from the transaction I have to remember to take everyone through the learning, on a journey. Allow them to have the social discussions around the culture shock, to go through the sceptical phase, the negative phase, and so on. I went through all of those so why can’t everyone else. There is no short cut.
Do we know what we have to do for the next three years, strategy and technically wise? Absolutely! It is about getting other people to understand the plan and then trying to get them to have a relationship. So I have to build relationships between Wal-Mart and Massmart, which is going to be difficult.
How do you motivate staff, given that on the one hand you have highly paid and highly skilled executives and managers and on the other you have relatively low paid and unskilled staff on the shop floor? The reality is that we are motivated by a combination of the reputation of the company, and the way we are treated by our direct line supervisors. With respect to the first component, we must run a company for a specific social objective that is clear and understandable – “we save our customers money so they can live better”, and behave and communicate in a way that is consistent with that. On the second we try – although are not always successful – to make our leaders feel empowered, but responsible, and then attempt to give them the skills and feedback to lead properly.
Do you recognize some areas in yourself or your team that need improvement? Email Adriaan on email@example.com for more on creating “Leadership Fit” leaders that generate successful movement (performance) inside your organisation.