Stephen van Coller: Meet the world’s disruptors – blockchain and management

A major advantage of regularly attending Davos is being exposed one to the big trends transforming the world. A topic which appears quietly on the agenda one year, often rises in prominence 12 months later and occasionally gets to dominate the agenda – and global focus – in the years thereafter. Davos is the ultimate banquet for a big picture thinker. When it comes to following and understanding the issues transforming the business environment, MTN’s Stephen van Coller is deeply plugged-in. In this interview, he uses his 2017 Davos experience to share insights into the two big disruptive themes everyone needs to know – blockchain and the revolution in management. – Alec Hogg

This special podcast is brought to you by BrightRock and I’m with Stephen van Coller from MTN with a different hat on this year. Last year you came as a banker, now you’re coming as a tech, telecoms, a whole new world. Do you see things differently when you come to Davos now?

I think it is slightly different in that my role is different. I’m no longer the CEO who needs to keep the day-to-day going, I’m really trying to look at the future for MTN, so really trying to throw the ball forward three, five years to see what the telecoms world is going to look like, what’s the mobile world going to look like, who are our competitors, what are our customers going to look like and starting to build that strategy so that we can go forward. If you can remember when Singularity University came last year, I talked about that zoom in, zoom out strategy from John Hagel at Deloitte’s and so that’s what MTN are trying to do, we’re trying to zoom out and see what we have to become and then zoom back in and see if our strategy’s going to get us there.

It is a bit of a zoom out here in Davos?

Absolutely zoom out for me this time and obviously trying to participate in some of the South African and African committees that I used to be on because I’m still passionate about the social inclusion which is driven by financial inclusion, which is driven by mobile money. MTN has 30-million mobile customers, so probably the largest bank in Africa as we stand today, but we have to do something with it to create this social inclusion because that lifts GDP and then our company lifts as well, so it’s not a CSI policy, it’s actually trying to create a better business.

It was interesting, yesterday when Rob Davies was talking at the South African event and said that he is on one of the committees here, on the fourth industrial revolution. Now you don’t’ kind of take an ANC, died in the war politician and imagine him wanting to learn about the Fourth Industrial Age and yet, Rob said that’s what he does. I was impressed. There’s a lot of learning that’s going on behind the scenes, maybe the public don’t always appreciate what is happening.

Yes, I think there’s two points there. One is I think you’re exactly right. If people knew exactly what the reserve bank and National Treasury were actually exploring at the moment, you’d be amazed. I mean I’ve had discussions with them around blockchain, around financial inclusion, around various things that you would think they’re not thinking about, they’re doing a lot of work on at the moment. What’s interesting is that Rob Davies is an ex-communist or is still a communist, I don’t know, but his looking at it is very interesting because actually the sort of digital revolution is what is going to create equality and is actually breaking down some of the barriers to social inclusion. That’s very interesting that he’s seen that, that’s really hopeful.

There’s always good things to come out of here, but if you can be a little contrarian, someone said to me yesterday, Trump could turn out to be, despite all his faults, the entrepreneur’s entrepreneur because he could break down barriers and actually give business a good kick and have inclusion that side too.

My view on Trump is irrelevant, either you like him or you don’t like him and I mean, I didn’t vote in the elections, so he’s elected, but my experience is  if you really want change you’ve got to have change. Changing incrementally never works because it creates too much space or time space between the change and the paths can be chosen. There’s a real chance that Trump may just be the catalyst for global change.

We’ve seen populism everywhere because of social media, people sharing, more transparency coming out, people realising what’s really going on in the world and he may just be the catalyst for that and so listen, there’s a big bid offer spread there, but you need someone like him to create change. Listen he’s a businessman, he’s made lots of money, he can’t be that crazy. He may just be really shaking the tree a bit, so I actually think there’s a possibility in contrarian view that he may be the catalyst for change we need in the world.

Indeed, Warren Buffet says, “America has survived many bad presidents, so even Trump”, but you mentioned blockchain and that the reserve bank’s doing work on it. I’ve noticed that it’s coming more and more into the agenda this year here in Davos and in fact, Jeff Schumacher who I interviewed yesterday, a venture capitalist from California said, “Next year it will dominate the Davos agenda”. I guess he has a vested interest, but what’s your view on that?

I sort of liken it to, there’s a great picture I use in one of my presentations of the digital camera that was presented to the Kodak board and it’s this big trolley and they wheeled it in and at that time they were probably doing 20 megapixels on a piece of paper and they thought they were a chemical and paper company and someone walks in and says, “Here’s this huge non-portable item that does 100 000 pixels, it’s going to disrupt your business and close you down in 15 years” and that’s where we are with blockchain, we’re really in that early stage.

The technology is sound, it’s just not scaleable at the moment and fast enough, but it will come. You know, people are very innovative and we’re seeing improvements in it, quite a lot of people are inventing a lot of money, so the concept behind it, I think is absolutely sound and why do I say that? Well, there are lots of inefficiencies in the world, especially in the banking sector. If you think in South Africa, or in the UK, financial services are 30 odd percent of GDP and there’s so much friction in the payments world and in the FICA world and in the KYC world, imagine if you could KYC yourself once and never have to do it again.

Is that know your client?

Yes, that’s just putting your documents into vault and for the rest of your life that’s your certificate, that’s your thumbprint.

Is that blockchain, is that the way it works?

That’s what blockchain does. As long as it’s authenticated the day it arrives, it can never be unauthenticated, and it’s like your DNA. You know once you’ve got your DNA, they know who Alec Hogg is. It’s never going to change, no one can change it, no one can break it, we always know that’s Alec Hogg’s DNA because it can never be duplicated and that’s really what they’re doing with blockchain, is they’re trying to create a digital DNA for everything and everyone, that can never be replicated and once it’s authenticated and put on the chain it can never be unauthenticated and that’s what it’s really about.

If you can get it right and get it scaleable and get it to work at a reasonable pace for things like payments and that, which are high frequency, then you can take a lot of cost out of the system and imagine if you could decrease financial services as a cost from 30 percent to 15 percent, imagine how much that would generate global economic growth. So at the moment people are looking to use it for identity because it’s something you do infrequently, it’s not time-sensitive. So if it takes ten minutes it’s not the end of the world, because at the moment you go and stand in a queue for half an hour, an hour, so if it takes ten minutes you’re doing well, but eventually it’s going to be used for payments for university certificates, for mortgages, for all sorts of things and it just reduces the ability to do things fraudulently because you create this one instance, you know no one can replicate your fingerprint yet.

Steve, just to put that into some kind of perspective, I remember in the media business, being told that people were going to be reading online articles on their cell phones and I couldn’t believe that, that was possible, that why would anyone want to do that on a cell phone. Of course, today I think, well I know in BizNews, 60 percent of our consumption is via mobile phones. As far as blockchain is concerned, once you have that in place, surely your best friend, being your mobile phone becomes a huge opportunity for those who are in that field like MTN.

Absolutely, we have, whichever way you look at it, 90 day active customers, probably round about 400-million sim cards, 30 day active is about 250 odd and remember we have to FICA them all the time and when you’ve got churn, I mean in South Africa we probably re-issue 60% of our sim cards every year, so imagine being able to take that cost out of the business because you’ve now got some kind of digital certificate that was done once, is absolutely unique to Alec Hogg, so it doesn’t matter if you have ten sim cards, I know who Alec Hogg is and I know all his sim cards and I’m happy with the certificate. That’s a huge opportunity, I think, for the world if we can get it right and no doubt in ten years’ time it’s going to be a very, very different world because of it.

What about banking, mobile banking was a little slow to take off in South Africa, in parts of the continent it’s actually been more aggressive, would blockchain not give that a good kick?

Yes it will. You don’t have to use blockchain, you can use distributed ledger architecture at the moment, which works. I mean it’s how Netflix works, it’s how some of the big global companies like JP Morgan do some of their high frequency trading. They use distributed ledger and that’s really what you do, is you take a piece of information, you encrypt it and then you split it up into say five different parts and you send them into five different nodes and then when it comes back it has a digital signature that then brings all those five bits together, so it’s very difficult to defraud that because you don’t know where you can get one bit, but you don’t know where the other four bits are because they could be anywhere. That’s been used more frequently now and that allows you to scale up, scale down, it allows you to, you know like your car today, you buy a 4×4 because you go in the bush for two weeks at the end of the year.

So you drive this 4×4 all year, it’s inefficient, it has all these seats and all this space you don’t need that you can actually have a little scooter. What this distributed architecture allows you to do through the cloud is only scale up and pay for it when you need it. Imagine a bank only needed it to build what it needed for the minimum amount of transactions, so at the beginning of the month, rather than having those big data centres for the end of the month when everyone gets paid, imagine how much cost would come out because then you scale it in the cloud and then you scale it down, so you only pay as you use. It’s almost like having a car sharing, you know you only pay for that car when you need it for the two weeks and the rest of the year you take money out.

Only when you go to the bush do you use that big 4×4.

That’s what distributed ledger is going to do to many organisations and I think regulators will be far more comfortable allowing cloud transactions when you are certain of the security and blockchain technology will allow that certainty.

You came here as a banker last year and had different glasses on. This year in the telecoms industry, is there anything in Davos that you’re going to go back with, yet thinking differently?

I tell you what’s interesting for me, is actually seeing how conscious leadership is starting to permeate?

What’s that, what’s conscious leadership?

It’s really about leadership from the centre of an organisation, rather than the top of an organisation, it’s about enabling your staff. There was a great story I tell, about 15 years ago I went to the Megawatt Park Building, and I walked in there. I had a meeting with Thulani Gcabashe, who was the CEO at the time and I said to him, “Thulani, ooh this is a huge building, how many people work here?” and he said about 30 percent. The issue there is, is that in today’s world with access to Google and information, knowledge is not a differentiator, it’s actually wisdom, the ability to use that knowledge as a differentiator and that’s not an age thing.

Therefore, if you run a business as a pyramid, you start straight-jacketing people to say, “Here’s your job description and that’s all you’re allowed to do”, but actually everyone has much broader interests. You may be a banker, but you’re interested in financial inclusion or blockchain, or something. As a leader you’ve got to capture people’s inspiration and get them to work 100 percent of their brainpower into your business, so you need to create what I call a task-based business rather than job-based and allow people to be inspired in your business and innovate, and you can’t do that with a pyramid structure.

Therefore, yes managers are actually becoming mentors as opposed to managers, they’re actually, you report to someone, but all the people you do tasks with on a horizontal basis rather than a vertical basis start appraising you and telling you how you’re worked in and then your manager or your mentor now will aggregate all that information and say, “This is what the community things of you”, so leadership has fundamentally changed, but what I’m interested in, last year you could actually see the divide. The people like the Unilever’s who had adopted it and some of the other companies who were still going, “Oh, this is nonsense, I still want to climb the ladder, I still want to be the big boss” I’ve seen this year, there’s far more acceptance that this new world of work is actually a reality and we may need to start thinking about how we access it, so that’s very, very encouraging for me.

One of the benefits of coming here year after year is that you do see trends like that.

Absolutely, I think a lot of people say this is like a big talk shop. Yes, it is, there are many people who come and like to do business meetings and talk, but if you come year after year you start seeing some of these trends actually becoming a reality because you see, people forget you can’t do everything in a year. Sometimes, you know Rome doesn’t take a year to build; it takes you much longer, so they take concepts from here, they go back into their business and they start filtering them through and maybe two or three years later you start seeing more mass adoption of these because reality becomes actualised because people start writing about you. You’re now interested in it, you read a bit more about it, you go and ask some people about it, you’re in ten more sessions, so I’m actually seeing some of the things that we talked about three years ago, there’s big adoption, I think that’s very hopeful generally for the world.

There are some very inspiring stories that you pick up here. Among those for me was the CEO of Campbell Soup, who was explaining exactly the story that you’ve just now articulated. So it’s not just Unilever who are waving the flag, Campbell there and I guess many others as well, but how is MTN? You guys have had some hugely attractive acquisitions from a leadership perspective with Ralph Mupita and of course your colleague coming over from Vodafone, Rob. How are you guys settling in as a team, is Rob actually there yet?

New MTN CEO Rob Shuter

No, Rob starts on the 14th of March and Ralph starts on the 1st of April, Jenz, who is the new CEO, started on Monday, so he’s in the seat and then you have Oliver Fortuin from BT Global, I think starting on the 1st of February running enterprise, so what’s very exciting is you have a new, fresh leadership. Most of the people have been CEO’s so you have a total different business view.

So when you have discussions with your CEO or your CFO or your COO, or your head of enterprise, you’ve actually got someone who’s experienced being a CEO and you can speak to any CEO, it’s very different from being a Head of, it’s fundamentally different, so I’m very excited about that. We’ve got youth, I mean I think Ralph’s only 44 or 45, Rob’s 49, 50, I’m 50, Jenz I’m not sure, but he’s around that age, so we’re all there and it means you have a team that’s probably going to be around together for at least five years and that’s quite exciting, new things, no history, and hopefully, fresh vibes, so I’m very excited.

Do you think it’s going to take MTN a long time to settle into this new way of work, of leadership from the centre rather than the top?

Listen, it always does take time. The only difference is that MTN’s quite a young company, so it still has quite a lot of that innovation vibe in it. It’s been stifled for the last few years as they’ve gone through the Nigerian fine and some of that change and obviously all this leadership change, you know what happens when there’s no leaders, sort of everything grinds to a halt, so actually the leadership coming back in reigniting some of that innovative culture, I don’t’ think is going to be that different, we just need to come up with what’s our new North Star, what’s the vision, where are we going over the next five years and we’ll deal with that in the next six months and then I think you’ll see a very different revitalised MTN because you’ll have leaders who will have some direction and be able to put that out to the staff.

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