Sipho Nkosi, CEO of Exxaro is originally from Kwazulu Natal where he grew up in the area of Vryheid. He never aspired to be where he is today. As he explains: “I never aspired to take a leadership position because the environment I grew up in was always an environment of compliance and what was known became normal. I saw myself, for instance, as a clerk at a court, or as a teacher, which was known and available.”
Experiences such as the association with a young white friend by the name of Pieter contributed to this kind of attitude. At a very young age Pieter would sleep over at Nkosi’s house, eat and play there. But then they started going to school, in totally different locations. Suddenly, during holidays Pieter would refuse to enter their house because he was taught that black people’s houses were full of germs. He also indicated to Nkosi not to bother studying as he (Pieter) would always be his boss anyway. Such experiences did not fuel Nkosi’s self-belief and ambition at the time.
Fortunately other experiences countered these negative influences. His father pushed them to make studies a priority by telling them: “I will do whatever it takes to get you to study whatever it is you have to study”. His brother was the first matriculant in their family and went on to study law at the University of Zululand.
So Nkosi had a choice: Listen to the negative voices around him, or heed the positive influences. Because he decided on the latter he rose above his circumstances and can today serve as one of the few examples that overcame the odds and bucked the trend against the system.
He completed a Bcom, also at University of Zululand, after which he went to Ford motor company for 5 years, initially as a graduate trainee and then a market analyst. But his resolve and desire to move forward was tested. He was retrenched, which was a huge challenge as many in the community looked up to this young Bcom graduate from Natal. Although it was difficult to sit down with his parents and explain that he was out of a job, his view is: “It’s those things that shaped you and made you a better person.” As destiny would have it he could not find a job for several months. During this period an earlier application to do an MBA at the University of Massachusetts in the USA, which he had forgotten about, was accepted. The decision to do this fulltime was probably made easier because he was unemployed. Of this experience he says: “I truly believe that every experience that you encounter, or any activity that you get involved in, at some time pays off; the lessons in life – you never know where they lead you. If you allow certain things to happen, you get “taken” to a particular spot where you should have energy and drive and ambition to do that.” He started developing what many refer to as a ‘can do’ attitude.
“In terms of saying, no this I can’t do because I lack certain skills, that was not part of my life.”
Upon his return from the USA he started at Anglo American, Coal division where he spent 5 years in marketing. The business, industry and his own career took a few turns, changed and eventually, when Anglo American and BHP Billiton decided to sell some coal assets Nkosi was encouraged by former colleagues to put a team together, which he did. They looked for funding, bid for the asset and got it. This entity eventually became Exxaro, with a vision to become a 20 billion dollar market cap business by 2020. They are currently on 8 billion dollars and moving in the right direction, despite market conditions that resist it.
The vision for Exxaro was born when Nkosi indicated to his team that he wanted the organization to achieve the stated vision. They went away and crunched the numbers, only to return with a strong case that it could only be achieved by 2019. He then suggested 2020 and everyone agreed; there was full buy-in. Today, every time someone suggests a strategy or project, the question back to them is: “How will this assist us to get to the 20 billion dollar vision by 2020?”
While he has been the leader they seem to have achieved much. Not only is there unity around a direction by way of a clear vision that at least most employees follow passionately, but the strategy seems to be clear to everyone, according to Nkosi. He knows this because of the kind of questions general staff confront him with, such as concerns around why Exxaro aims to enter the PGM (Platinum Group Metals) market. He is then required to explain the reasoning in greater detail.
Nkosi also feels they have managed to “encourage employees to feel that they belong to the organization – 9600 employees all over who all believe in the system, that the benefits they have seen, accrue to them as well”. They created a scheme that has already paid a billion rand to employees who is not management – from the cleaner upwards, everyone walked away with R 135 000.
Employees are now starting to follow the share price with enthusiasm, because it is their organization. Nkosi explains further: “Last year the share price went down because we had made an announcement that we were buying some asset in Australia and the market didn’t take that well. The phone calls I was getting from people I don’t even know, staff, unions, saying this bad management decision must come to an end. Everyone looked at me and wondered how I could make this decision.”
While Nkosi also believes they have brought stability into the organization as far as leadership is concerned, in his view “everyone knows, that for this organization to be successful, we’ve got to be flexible, we’ve got to understand that change is happening every 3 or 6 months because we live in an environment that is dynamic and changing, and secondly, we are part of the developing world which is really driving growth. Our business is driven by the China’s and the India’s, not the Europe’s and the America’s. So everyone in this organization understands that we can make an announcement next week that changes the face of the organization”.
The challenges ahead are clear. Firstly, to make sure they identify and secure the right projects that will take them to their 2020 vision. Secondly, and in his own words, “developing the skill and leaders to do that. Without the people, without the leaders the vision will not happen”. And thirdly, Nkosi believes they need to ensure that the next leader will not easily deviate from the vision. In a sense they need to institutionalize the vision. He is confident that a next leader will not change it due to the broad buy-in from all stakeholders.
Those around Nkosi seem to view him as a modest and empowering leader, giving his team members space to co-lead. He is willing to learn and accept that he does not have all the answers, though he knows where he wants to go. He knows he has the final say, yet he is often over ruled in meetings by his team. As a CEO he seems to be as approachable as they come. Recently the organization decided to celebrate the achievement of no fatalities for a year. A reasonably junior employee walked into his office and challenged the decision for head office to spend more than the operations on the celebration, even though they are not at the coal face, and they continually promote frugal spending. It made sense to Nkosi and he discussed with his Exco. They changed it.
This is the man that, together with his team and all employees seem to be bucking the trend in the mining industry, as he did in his own life.
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