Take a leaf from Telkom

2014-12-14 15:00

In the past, Telkom was a problem child in the state’s portfolio of public enterprises.

It was grossly inefficient, riddled with corruption and lurched from crisis to crisis. Several CEOs came and left with large payouts.

Each crisis could be traced back to excessive interference by the main shareholder – the government. Strategic and operational decisions were often heavily influenced by political principals sitting in government offices and party headquarters.

As Telkom staggered like a drunk at a New Year’s Eve bash, its rivals in the telecommunications sector surged ahead. Telkom was on its way to becoming irrelevant in the lives of South Africa’s private and corporate citizens.

Then something happened. Government appointed top businessman Jabu Mabuza as chairman of the board. Mabuza, who had a solid reputation to uphold, took the position on condition he would be safe from the interference that had plagued his predecessors.

His board appointed Sipho Maseko, a former CEO of BP SA and COO of Vodacom, as the entity’s chief executive. The board and executive team then got on with the job of fixing the entity.

They have taken bold decisions around cutting fat, growing the business, making strategic acquisitions and tie-ups, strengthening the service culture and laying down long-term plans.

Telkom is now being run like a business. The market has responded positively and the share price skyrocketed from about R11 in the first quarter of last year to R70 this week.

It is early days yet and the company still faces the challenge of shrinking fixed-line usage and winning over a sceptical customer base.

In citing the Telkom example, we are not trying to sing the praises of the men and women who run the corporation. They are not the only ones. There has been similar success at Transnet under Brian Molefe.

We want to point out to government that fixing the troubled parastatal sector is not rocket science. It will not be done by appointing high-powered review committees, establishing ANC task teams, giving the deputy president a magic wand, setting up war rooms or shifting responsibilities from one department to another.

It’s much simpler. Appoint the right people, give them a clear mandate and stop grubby politicians from manipulating operational processes.

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