After a couple of years in the oil business, a youthful Sean Summers was lining up a move into computers with IBM before fate intervened. A chance discussion with his parents’ dinner guests launched him into a career with Raymond Ackerman’s then embryonic Pick n Pay, a journey which ended in 2008 when the duo “fell out of love”. At the time Summers had been Pick n Pay’s CEO for 11 years and helped steer it to the top of the SA retailing tree, a position it has since lost. After emigrating to the UK, the Capetonian teamed up with Markus Jooste’s Steinhoff Group and now runs its 450 store UK beds and furniture chains. In this in-depth interview, Summers gives a masterclass in retailing, talks about his close relationships with the iconic Ackerman and Jooste, and offers some pointed insights into mainly self-inflicted challenges facing his homeland. – Alec Hogg
I’m in London with Sean Summers, a director at the Steinhoff Group – at your favourite club.
Good day, Alec.
Sean, its lovely catching up with you, the great retailer of South Africa. Although I suppose Whitey Basson nowadays is making a bit of a run at that title.
No, Whitey was always one of the great retailers of South Africa, amongst a whole lot of other luminaries. South Africa’s had many great retailers.
Why is that?
I suppose we have some roots going back to England at the end of the day. They always say England is a nation of shopkeepers, so I think there’s certainly some heritage and roots there and some truth in that.
Well, you’re in England now. You came to this country some years ago, but your background – your ethos – comes from Pick n Pay, from starting there as a trainee manager. You’re a bright guy. The whole world knows that. You didn’t go to university. You went, pretty much, straight into working at that company. Any regrets?
No, nothing at all. I’ve always said that in truth, I think a person would be a liar if they said that there would be nothing ever, in their life that they wouldn’t do differently. I think that would be stupid to say that. I don’t have any regrets about what I’ve done in life because when I’ve made a mistake in life, I’ve learned from it and I think that some of the most important things I’ve learned in life have been from my mistakes.
You have an interesting heritage. We were talking before this interview with your mom and dad, and your father made a huge contribution to South Africa in his own way.
Yes. My grandfather on my mother’s side, Brigadier Craig was sent to South Africa as an engineer shortly after the First World War. In fact, the entire reclamation of the Foreshore and the whole establishment of the Duncan Docks and then subsequent to that, Port Elizabeth and East London – all of the emplacements before the Second World War – was his brainchild. I have very fond…I still have the cuttings of my father and my grandfather standing on the beach in front of the castle with General Smuts, with all of his buds. I can see him with the lanterns on, showing where the Foreshore was going to be established. I suppose, sadly, he didn’t really have that much foresight because he didn’t keep a piece of the ground.
Your father’s influence actually got you into Pick n Pay in the first place. Tell us that story.
My father went to South Africa as a very young man, in the mid-30’s/early 30’s. He worked for Courtaulds and when the war started, he joined the navy in the Counter-Espionage in Simonstown. He was also in the Photographic and Surveillance Unit and then after that, he pursued his photographic career and eventually, ended up in advertising. In fact, at that stage, one of his early clients in the agency was Jack Goldin (when he started Pick n Pay). When Jack became ill and sold Pick n Pay to Raymond, that’s how my father knew Raymond. I then, anecdotally, came across Don and Petrusa Cobb who were friends of my parents’. As a young guy, it was really through Don one evening, that after my first job at Shell and BP Service Company, I was trying to get into the computer division there. It was 1973 and it was the start of the first major world crisis and then, when everything was put on hold there, being the young tempestuous fellow that I was, I decided to pursue other options and have a look at what was around.
When I went to visit my parents one Friday evening, Don and Petrusa were having dinner with my folks, he asked me what I was up to (and I was quite petulant, as I said), so Don said, “Well, come to Pick n Pay tomorrow morning and just have a chat to me.” I went there and I met Raymond Ackerman for the first time and they said, “Listen, we’re looking for young guys to join us. We’ve opened in Port Elizabeth and we’ve opened more and more stores in Cape Town.” Before I knew where I was, on the spur of the moment I was off to PE in 1974.
How big was Pick n Pay then?
Then, Pick n Pay would maybe have had about 10/12 stores in the Western Cape. In Port Elizabeth, we had four stores at that stage and they had just opened in Durban. They had a few stores in Johannesburg. Raymond’s thesis at that stage (quite correctly) was to take the fight to Greatermans and Checkers on a far wider scale across the country, so when I arrived in PE, we had four stores
So, you’ve seen Pick n Pay grow from that embryonic beginning and been very instrumental in helping to develop it as well – becoming CEO as you went along there. Retailing is a craft, an art, a science in many ways as well. How did you learn? Where did you pick all of this up?
Everybody talks about these labels. He/she is a retailer. He/she isn’t a retailer. You really ask yourself, “What is it at the end of the day?” It’s like trying to define what leadership is. I suppose retail, at the end of the day, is almost like a bush craft. Bushcraft is not something you can just learn by going to visit Mala Mala and spending three days in a Range Rover driving around with a guide and suddenly, you’re a subject expert. I think it’s like bushcraft. You have to grow up in that environment. You have to be aware of what’s going on around you. You have to develop a sense of self-preservation and a keen sense of awareness. I think you have to be extraordinarily inquisitive as well and I think those are really, the hallmarks of retail. When I was in Namibia, I was asking a German how it was that he had this extraordinary ability to spot game. He just said to me, “Sean, it’s simple. Look for the thing that shouldn’t be there.” I think a little bit of that applies to retail, but a lot of that applies to life as well.
Raymond Ackerman came from the south. In the north of the country – in the commercial centre – they used to talk about ‘the University of Newtown’. Is there much within the University of Pick n Pay that’s similar to what the old timers called ‘the University of Newtown’? In other words, learning on the job.
Yes, I think that learning on the job is a very important part of retail. When you look at the great retail operations around the world (whether they be in apparel, food, luxury goods, or whatever area of retail it can be) and all the markets you’re in, they all involve an extraordinary passion first and foremost, for product and what it is that you sell. What is the stuff? What do we do? That absolutely, has to be backed up by an extraordinary passion for people because without people and product, you cannot build a business. The great retailer absolutely understand that. When you go around as a consumer (and retail extends even further out. It goes to the hospitality industry) you walk into a restaurant, hotel, or whatever it is, you can sense straight away whether these people are actually in tune and on song because you can see it. You can see it in the attitude of the people. You can see it in the product. It’s inspirational to you. Automatically, you get an instinct that what is there is right.
You talk about retail extending very widely, but when we come back to the kind of retail you’re involved in, that’s a tough job. Either you’re sitting at a till for hours or you’re walking on the floor, trying to encourage customers. We know that quite often, the public is very hard to deal with, so how do you motivate those staff?
Absolutely. One of the first things that you have to accept in retail is that it is very repetitive and what you do is very process-driven. On some levels, it’s very mundane. It’s very routine. It’s unlocking a shop, having the shelves emptied out, replenishing the shelves, locking the store, going home, and coming back the next day and doing the same thing. A lot of that applies to length and breadth of retail, no matter what category you’re sitting in or what commodity you’re selling. I suppose one could say the same thing. If you’re a broker, you come to work, you open up your computer, you look at the stocks, you do what you do, and you go home. I think that there is routine in all of these things. Yes, retail is very, very intense in terms of the way that you have this immediate connection with the consumer – daily/continually.
That’s why you have to inject fun into the job. If you don’t inject fun into the job and by your very nature, enjoy people – both the people that you work with and the customers who shop in your store – and get a thrill out of seeing people get joy out of what you do; then you’re in the wrong space. One of the things that I learned was from one of the greatest people that I’ve ever been fortunate enough to know – Martin Rosen. When we all started working together as youngsters in Pick n Pay, Martin was one of us. Then he had a very unfortunate accident at the end of his army career, and Martin was crippled. Martin taught me extraordinary lessons about life, about fortitude, and about never feeling sorry for yourself. The thing I’ve learned from Martin that has served me greatly through my life, is that he just innately, somehow taught me the ability…that to do something for somebody, which they cannot ordinarily do themselves, is very rewarding.
It can be something as mundane as helping Martin up the step in his wheelchair or carrying him up a flight of stairs, and I think that the same applies to everything in life. If you’re passionate about what you do, you’re passionate about the people that you work with, and you’re passionate about delivering for your consumers; your consumers should never be a problem for you because they’ll actually be getting enjoyment out of what you do, so it’s not drudgery. It’s actually, hugely rewarding.
You mentioned Martin – somebody else who was very close to you was Raymond Ackerman (not quite the founder, but almost). Do you still speak to each other?
Sure. Absolutely. Raymond and I had the most extraordinary years together. I joined as a trainee, as I said. That Saturday morning when I went to the Pick n Pay office in the old Medical Centre in Claremont and Raymond came in and met me, I was there with Don Cobb and June Andrews, his secretary. In those days, it was secretary, public relations, and personnel. Raymond said, “We’re looking for young guys”, and he left the interview. I was back the next week. June gave me the job and she said, “Well, if you want the job, you have to go to Port Elizabeth. That’s where we have some openings at this stage.” A couple of weeks after that, Raymond walked into Walmer 6th Avenue, where I was and he said, “Oh, Sean. I’d heard you’d joined Pick n Pay, but why are you here?” I said, “No, sir. June told me that if I wanted a job at Pick n Pay, I had to come to PE.” He said, “No, you don’t have to do that. You can go home if you want.” I said, “No, I’m here.”
We just had the most extraordinary 33 years together. One of my greatest, proudest moments was obviously, the day I was appointed CEO. To be able to come into the organisation and to have walked the walk that we walked together and to basically, have been given the keys to the kingdom by Raymond was one of the proudest days of my life. We really had the most extraordinary time together.
How good is he in a global sense, the international retailing business?
Raymond was a phenomenal retailer – absolutely, phenomenal retailer. Again, you can see that it goes back to his genesis. It goes back to his roots. It goes back to his Greaterman days where he would always regale you fondly with the stories of when he worked in the lingerie department and all the clothing departments, etcetera. Raymond was always a retailer to the tips of his fingers. Again, around stores there is a very important thing. When you go and visit stores and you visit the business, you have to ask yourself a simple question. When you leave, do your people feel better off for having seen you, or do they feel worse? With all Raymond’s visits, people just feel buoyant. They always felt uplifted and one of the great things I learned from Raymond is that you absolutely, have the ability to live in people’s minds and hearts when you leave. Their feeling about you is in your hands.
Engagement or keeping them engaged. One of your big challenges during your time as CEO at Pick n Pay is the extortion crisis that happened in 2003. We’ve all heard of the Tylenol crisis around the world but in South Africa, you had something that was akin to it.
Yes, I suppose you get those moments in life where you really, get a real shock – a rush of cold blood through your veins. On the day that Danie Boshoff walked into my office with that little brown box with the three items in it and the note, it was certainly a moment of reckoning.
What did the note say?
Well, it basically said that the three items in the box had been contaminated, that they’d been tampered with, that we were not to contact anybody, and that we were to await a phone call on Alan van den Berg’s phone. He was the buyer for the region downstairs. We were on the end of a string on this thing. You come to a situation in life where you have to start taking some lonely decisions and that’s what you do.
It was like blackmail, I guess. If someone’s going to tamper with your products in a retailing organisation, you cannot be responsible for people’s death (those people who are buying from you). Did you bring the police in immediately? How did you go about it?
All I can say to you on that score is, “Instantaneously.” That thought didn’t take more than a second to realise a process is going on here, which is way beyond the scope and compass of what you are normally capable of dealing with. Again, having been heavily involved in the founding of Business against Crime, I was very fortunate to have the correct level of contact into the police, to be able to engage at the correct level. That was a very important part of this process because it obviously had to be kept very discreet, as there were some very onerous demands that were placed in the letter that was given to us, so we dealt with it on that basis.
Did you ever find the blackmailer?
No. He was never found, but we deal with it on that basis and we kept it quiet for about three months. When I say ‘kept it quiet for three months’; obviously, the whole idea was to try to entrap the perpetrator. What did become apparent when we spoke to the police was that this was not the only instance that was going on at that stage. Obviously, the first issue was engagement and entrapment and this went on for about three months of real stress and intrigue – waiting for this phone to ring all the time for various communications from the perpetrator. Then we had the issue… I was in fact, at a conference. I had to go and speak at a conference in Spain and my phone rang on a Friday evening. I got the call that somebody had been rushed to hospital in Randburg and they’d bought a can of tuna from Pick n Pay that had been tampered with, and they were sick.
We then had to go public, so I flew back the next night. The Saturday night, I flew back to South Africa and on the Sunday night, we took the whole thing pubic. We recorded a TV broadcast and took it public. We took airtime on all the TV stations on the Sunday evening and we told South Africa what had happened. We dealt with it from there and then it became full public knowledge.
For a young manager who gets an envelope sent to him with a similar kind of threat in it, what would your advice be?
I’ll never forget my good friend, John Robbie on Radio 702. At times, I thought that John was the extortionist. No, I’m joking. One day, John said to me, “Sean, you’ve done this thing by the textbook” and I said, “John, if there is a textbook, I’d sure love to see it. I’d sure love to read it.” As with anything in life, you go back to the values. I suppose you’re taught these values by your parents at the end of the day, and the simple thing is that you do what’s right. My father always taught me, through life, that you do what’s right and you suffer the consequences of that – good or bad. I liken it to the Town Hall decision. If you’re ever in any of these situations, no matter what it is… The reason why you can’t write a book for an extortion situation like this is that every circumstance is different. You have different companies and different things in play, so there is textbook that can do this thing. I think the way to deal with it is to take the Town Hall decision where you have to sit down and say to yourself, “On the basis of shared knowledge; if the community was in a Town Hall and everybody knew what you knew in full, what collective decision would the Town Hall take?”’ I think that if that decision is the decision that you take at that point in time; the passage of time will prove you right.
Did you lose sales?
No. It was quite funny because when the thing went public, Raymond wasn’t in South Africa. He was in England on a bit of a sabbatical. Raymond kept on phoning me to say, “Sean, well done. It’s being handled so well.” He was wonderfully supportive and he would say to me, “But if it’s being so well-supported, why are sales down a bit?” Certainly, specifically around the Johannesburg environment, there was some nervousness at a consumer level, which one could understand – totally – because at the end of the day, humans have to trust in each other. One of the really, distressing things in the world we live in today, is the breakdown in moral fibre, moral fabric, and people’s ability to trust in each other. There was a bit of situation around lost sales etcetera in the short term. Totally understandable. The extraordinary thing is that when we made all the announcements and went public; Pick n Pay’s share price actually went up.
I think that cuts a lot, to the credibility of the organisation and the honest with consumers. We got a little bit of criticism in the beginning. For example, “Why didn’t you go public with this three months ago?” You say, “Well, you can’t go public every time someone cries ‘wolf’. We took a very considered opinion.” The second we knew that there was the potential and that this guy had actually, committed an act to put our customers in danger, it changed the whole game. Then you say, “Now there are completely different rules.” As I say, just a bit of common sense and Town Hall wisdom.
Another of the big challenges (and this is something that few CEO’s in other parts of the world have to deal with) is the labour issues, particularly some of those strikes that turned pretty violent. For many years, Pick n Pay was regarded as a more progressive, more liberal employer and yet – certainly, under your watch – you were targeted by the unions as a bit of a soft touch as well.
I don’t think it was as much of a ‘soft touch’, Alec. When you look at South Africa as a country, I consider myself truly blessed. Not only to be a South African, but I consider myself even more blessed, having grown up as a young person through my commercial life in South Africa. Living from the mid-70’s, joining Pick n Pay, all the way through to when I left in 2008, while having been in a corporation through the whole movement that took place in South Africa where South Africa came forward into a new dispensation. If you look at 300-odd years of social engineering, I think one is naïve to believe that you can simply free a few people from jail, unban a party, and everything is done. It’s not. The pendulum of society has to swing. When you release a pendulum that has all that pent-up momentum in it after the 300 years of engineering that it had, you cannot take everything personally.
In the beginning, as much as you look at your people in Pick n Pay, you’ve done your best, you’ve tried to pay the best, and you tried to be as stalwart as one can be as an employer in everything that you do; your initial reaction is to take these things personally. You have to distance yourself and say that there is a far bigger issue at play here and the reason why you are singled out for treatment is that you actually do have moral fibre. Why would you go against something that doesn’t have moral fibre? If you want to make a stand, you would absolutely go against something that has moral fibre and that was one of the reasons why we ended up in the situation. For me, the extraordinary thing is that we went through a couple of bad and protracted strikes in Pick n Pay, but it was always amazing for me, post the strike. Literally, within days, everything was pretty much back to normal.
We have this ability in South Africa, to be very cross and passionately cross with each other for a period of time and then again, to get over that and heal the wounds so quickly. I think it’s one of the really, great attributes of South Africa and something, which gives me so much hope about the country is this instinctive, unbelievable residual core of goodwill that does exist.
When you left (as you said) in 2008 as a Chief Executive, you’d been with the company for a lifetime. You were relatively young, having run the business for 11 years. What triggered that decision, given that if you take the Warren Buffett school of thought, you should have been there for at least another 50?
I don’t know. If you look at kids today in the market place, they think that if you’ve been in a company for more than three years, you got stuck. You couldn’t find a job elsewhere. We’d had years and years of extraordinary success – Raymond and myself – and I think you just get to a stage where many things happen. You look at your own life and you say, “Am I just going to live one life in my lifetime or are there other opportunities out there? Do I want to develop in other dimensions?” I think, certainly on my watch, we’d achieved…we’d taken the company to a new place. In life, you can fall in love and I think you can get to a stage as well, where you can agree and say, “Listen, we can go our own ways now.” I still have extraordinary admiration and love for Raymond. We still phone on birthdays, keep in touch, and he’s just an extraordinary man.
If you look at his track record and what he’s created in South Africa in terms of employment and industry, Raymond was one of the leaders in the retail industry in South Africa and his legacy will stand tall and proud forever. One of the things that I never try to do is to try to even walk in Raymond’s footprints or step in his footprints in the sand. That you can never do. Raymond’s footprints will remain in the sand forever and they will be his. I just tried to make my own little footprints alongside for a while.
When you left, you appointed someone you knew very well – Nick Badminton – a fine gentleman. It appeared as though if there was anyone who could walk in your shoes in the sand, it was Nick but he wasn’t there for very long. Is that a source of some unhappiness for you that your successor was not able to go through with it?
I don’t know, Alec. Nick will obviously speak for his own career and for his own legacy. I think that all companies go through cycles and all companies are faced with new challenges with the passage of time. Certainly, the South African commercial space has undergone (post my leaving) a lot of change and a lot of flux. I think it’s up to each leader, as you come into it, to deal with it and to take the business forward.
Are you surprised though, that there’s been such a dramatic shift? When you were there, Pick n Pay was top of the tree. Since then, you’ve seen a reversal in the role with Shoprite becoming stronger. Was it just going to happen anyway, or might there have been a way of changing it?
Listen, I always liken retail to hand-to-hand combat. It is. These are fixed bayonets in the trenches every day, and it’s real warfare. When we ran the company, we were very much of that mindset. When I left Pick n Pay, I moved my life predominantly offshore and to a degree, I think you quarantine yourself from the real detail of what’s going on, although I desperately miss the people of the company. At the end of the day, you move on to new horizons. You move on to new things and you leave it for the current team to play the game. As I say, they have to answer to their time on the pitch.
Well, the new team that you joined is Markus Jooste’s Steinhoff Group. He’s given you a very substantial portfolio. Why do that in the first place? Why go back with another South African when clearly, the world must have been your oyster?
After 33 years with Raymond… I joined at the age of 20 and we were having our final discussions before we left. I always used to tell Raymond and Wendy I gave them more time than I gave my parents, joining the company and leaving in my early fifties. My folks got 20 years. They got about 33. I was restrained for a period of time and then, I took a sabbatical as well. I just felt that I wanted to get in touch with life again. I had a moment. I’ll share this with you. I was lying on the beach one summer holiday. I always used to go on holiday in June because during Christmas, we were always busy. I was lying on the beach one summer holiday and we were talking about doing many things next year. Things like the Masters and all sorts of things that I’d wanted to go to and by the time I’d looked at my statutory diary (and my statutory diary was always around supervisory board meetings, board meetings, risk meetings, audit meetings, REMCOM’s and all of those great things)…
Once I’d had a look at this, I realised that the next year was stitched and then you kind of, have a moment. I said to myself, “My God, I’m going to be 53. I know what my next seven years look like. They’re going to be no different. It’s going to be rewind and play every single year.” You look at this thing and I think all of this is part of the conditioning of getting to a stage where you say, “Maybe we don’t make old bones. Maybe we just keep going down, but we’re not going to be walking next to each other anymore.” I took my sabbatical and I did a lot of stuff on my bucket list. One of the things I ticked off – very clearly – is retirement. It ain’t all it’s hacked up to be. Trust me. That you can take for granted. I’d obviously known Markus Jooste. I’d met Markus in ’96 when Markus was a very young guy. He’s had his furniture manufacturing (Gomma Gomma). Paul Harris phoned me the one day and said he has this chap that he’d like me to meet. I went to the FNB Blue Glass Tower in Sandton and Theunie Lategan was sitting there. He was at FNB in those days and Theunie introduced me to Markus. Markus wanted to buy Boardmans because in those days, we still had Boardmans, but Raymond (Ackerman) wasn’t a seller. Sadly, we sold it to Edgars a while after that. We should rather have sold it to Markus. It may still have been around. That’s where I met Markus. Obviously, over the years, Markus and I knew each other from a distance. I always watched what Markus was doing and then, when he got involved with Claus Daun and all that Markus is doing at Steinhoff…I was just lucky when one day we came across each other and Markus asked me what I was doing. I said my fingers are itchy. I’m nearly at the end of my restraint and I want to do something again. Markus said, “Well, come and join us. We are intent on building a retail business. Come and join us.” I must say it’s been absolutely extraordinary.
Well, the annual report says you look after the U.K. and Australia, but what is that?
Well, I look after the U.K., which is obviously, all the retail manufacturing and logistics operations here. We have about 500-odd stores across Harvey’s and Bensons. We’re the largest bed retailer in the United Kingdom. We have three factories here as well. We manufacture our own beds in the United Kingdom. We have an upholstery production facility down in Bridgend and we have a very significant logistics service here, so we do just over one million home deliveries per year (furniture). Two men in a van with white gloves. I’m sorry to sound sexist, but it’s still a man’s job – lifting 80kg bulky furniture items. That’s the United Kingdom business. Then I work with Danie van der Merwe who is our Chief Operating Officer. I help Danie with Australia. Obviously, I have good roots in Australia, having worked there in 1985 when we opened the Hypermarket in Brisbane for ten months. Then obviously, our foray with Franklins there, which I remember you Alec, when you were looking to open your business in Aussie in those days. It’s just been really great to be involved in Australian retail again.
It’s an interesting place for South Africans to go – Australia. You’ve had, as you say, two runs at it before. What did you learn? Firstly, from the ’85 side, which was probably more politically instigated – the failure of Pick n Pay’s foray there – and then the next one with Franklins, that you’re able to apply this time around?
Well, as you so rightly say, in 1985 we were just beaten hands down by the political situation. We were a fairly high-profile South African company coming in there. We went to Queensland. John Bjelke-Petersen was the State Premier in Queensland in those days and he made P.W. Botha look liberal. Then, when we wanted to open up in Melbourne… In fact, we had the site at Taylor’s Lake in Melbourne. We were busy with land works there and then we were blacklisted, banned by the Plumbers and Gas Worker’s Union. What the unions did was they stopped any growth outside of Queensland. We had it on good authority that our major retail opposition there had a good finger in that pie; in getting the unions to agitate so we were beaten solidly/politically in those days. It was sad, so we left.
The foray with Franklins into Australia: had we backed up our investment with the correct levels of capital for growth, Franklins would have been in a very good place today and it’s just interesting to see how ‘value retail’ is the watchword. We can see what’s happening everywhere. You can see how well they are doing in Australia. You can see here in the United Kingdom with the advent of the B&M stores, never mind the growth of Lidl here. It’s been so extraordinary. You can look in the back of that. The issue of value retailing in Australia is clearly, also a value retail market. It was a wonderful experience. The company learned a lot from it. At the end of the day, when you put all of the urban legends and housewives’ tales behind it, when Pick n Pay eventually sold out their business, they walked out with R500m in profit. I don’t think that’s a bad return on effort for extraordinary learning and extraordinary lessons.
And today, the Steinhoff investments into Australia: how’s that going?
We’re going well. Freedom is really, in a good space – middle market. For Steinhoff, it’s a little bit out of the normal Steinhoff current thesis of real value retailing, being more in the faster end of the marketplace. Freedom has always been in that space in Australia and has been, very much, a mid-market brand and been a total Decorator Solution. We don’t only sell furniture there, but the whole home Decorator Solution as well. Obviously, we have the Snooze bedding business, which is predominantly franchised. We have a very good manufacturing business down there as well and in New Zealand, too. Australia’s looking good.
One of the online reports that I read in researching this discussion, said that you like Steinhoff because there’s a lot more freedom to be in a decentralised organisation. Was that fair comment?
Absolutely. If you look at Pick n Pay, Raymond always had a philosophy of decentralisation within the organisation that extended to the geographic regions there. For example, Western Cape, Eastern Cape, Natal, and Gauteng etcetera but Markus’ true genius is that he truly understands global decentralisation. The ability to be able to buy companies in geographies that have a geographic relevance to that marketplace and to be able to aggregate these furniture and retail businesses in home and housewares, to set very clear guidelines on capital, budgets, and forecast and having done that, to totally leave the local management alone to get the job done. You cannot sit in any one geography and think that you have the solutions for all these businesses that are confronting all these different dynamics, from consumer groupings to taste levels, to taste profiles etcetera. It’s extraordinary for me.
If you look in the world of fast-moving retail (and I’m not talking about the high-fashion stuff like Louis Vuitton or Cartier), there’s only one retailer that’s actually, done it globally and that’s Ikea. The mantra usually is that everybody says that you always have to think global and act local. If you look at what Ikea do, they do exactly the opposite. They think local and act global. ‘This is our Swedish/Nordic look. That’s how it is’ and you engage it. They go into a marketplace – big stores. They get a certain piece of the marketplace and that’s what they want. Steinhoff’s thesis in terms of aggregating all these retail assets that have geographic relevance has in itself, been extraordinary. It’s just amazing when I look at the diversity of the company. As we know in South Africa, because of our background and our history, dealing with diversity is something that we do as South Africans. One of our innate instincts is that we do deal with diversity quite well and we are fairly robust.
You mentioned South Africa with quite a lot of hope earlier. The prevalent mood amongst the business community though is rather different to that. There’s a lot of discomfort, a lot of unhappiness about the political leadership in one sense, in the direction the country is going. From the benefit of a 9,000km distance, how are you able to see the development of the country?
Well, I’m still very much South African. As much as I’m living in London at the moment, I’m still very much South African. I still have my home there. My daughter still lives there. When you look at where South Africa is, it comes back to what I was saying earlier about the 300 years of history that South Africa’s had and the phases we’re currently going through. Certainly, very distressing issues happening within society there. The one true thing in life, Alec, is that history does judge because history has the benefit of the truth and its only time that ultimately reveals the total truth. I don’t think that history will judge the current leadership in South Africa kindly or well. One can argue, to a great degree, that the wants, hopes, and aspirations of the real people of South Africa…..and when I talk about the real people of South Africa, I’m talking about the masses, people who have families that they want to educate, people who want to make their lives better because that’s what it’s about at the end of the day.
It’s not for the fortunate few like you and me, that had many options but for those people who don’t have many options, who are really trying to make their lives better for their loved ones and for their people who live in and around them in humble surroundings. For me, that is one of the travesties of justice of what is currently taking place and for those people currently in positions of leadership in South Africa…What I would appeal to them is that they need to wake up in the morning and take what I was taught about the ultimate test of life, the six-inch test of life. That, my friend is when you look in the mirror, look into your eyes, and ask the question, “Do I really like what’s looking back at me?” The only person, who knows the truth to that, is yourself. You can fool everybody else. You can put out all the PR statements you want. You can surround yourself with people who will tell you what you want to hear.
You can buy yourself media that will publish what you want to read but my friend, in the morning when you are either shaving or you’re a lady putting on your makeup, and you look at your eyes in the mirror, ask yourself the question. “Do I like what’s looking back at me?”
It’s very interesting. The late Steve Jobs said that another view that he had was, “When you look at yourself in the mirror in the morning and you say ‘if I have to do this that I’m going to do today for the rest of my life, would I want to do it?’” Do you? Do you look at yourself in the mirror some days and think ‘I’d like to be somewhere else. I’d like to be doing something else’ or has the Steinhoff story rejuvenated you?
If I didn’t want to do what I’m currently doing, I wouldn’t do it. I’m lucky, Alec. I’m blessed. I’m truly, a blessed guy. I have a beautiful wife. I have a beautiful daughter. I’ve been very fortunate and I do what I do because I want to do it. When I talk to my colleagues who work with me, I always use the simple analogy that life is simple. You need to drive to work faster than you drive home. It’s not that you don’t want to get home to your loved ones, but you need to have that sense of expectation, that wild sense of exuberance, of enthusiasm, of discovery. If you are not feeling that when you wake up in the morning, going to do what it is you’re going to do, you’re in wrong space pal. You’re in the wrong space, and that has nothing to do with saying that at night, I don’t want to get home to my loved ones and be true to my family. If you don’t feel that burning passion inside you to make a difference in what you do…and it can be in anything because there is nothing in your life that is below your dignity, unless it’s dishonest. No matter what you’re doing, whether you’re Chairman of the Board, sweeping a street, or caddying on a golf course… Whatever it is pal, nothing is below your dignity in life, unless it’s dishonest.