Whenever a new CEO walks into his or her office, there is one thing that all the smarter at least do; bring out all the dirty laundry from their predecessor – unless of course the predecessor is now in the chairman’s office or loitering somewhere in a powerful position of a corporation. But if it’s a clean break – and not like Disney, which moved its superstar and saviour CEO (Bob Iger) into the chairman’s office instead of out the building – the smart thing is to expose as many dead bodies as possible.
What it does is buy the CEO some time to clean house, restructure and then get the organisation moving to the new strategy, which the board you’d imagine has fully backed. This is a tried and tested strategy, read through the first results presentations of any new leadership group – it’s all about cleaning up past failures, bad investment calls and purchases.
As such, the judgement of a CEO’s performance – whether using share price in the case of a listed company – normally gets granular after a three year period. Maybe at the 18 month mark period there’s much closer scrutiny of whether the ship has at least stopped sinking.
Andre De Ruyter, the man called in to save Eskom and favoured by former finance minister, Tito Mboweni, will in January next year begin his third year as its CEO. He is one of its longest serving CEOs in a ruinous decade – a feather in his cap. Every South African had a snapshot of the extent of troubles De Ruyter and his team were walking into on his first day in Megawatt Park headquarters – so there was no need for further elaboration. Years of mismanagement, ageing power stations and corruption from opportunists both within and outside the corporation gave us all a sense of just how difficult his job would be. All of this against the fact – simply Eskom can’t meet SA’s power demand.
Having said all that; has he done a good job?
It’s a fair question as we emerge from a year where we have had the longest bouts of load shedding and now face diesel shortages that keep us in a dire situation as we head into our holiday period – where all industry is on a go-slow. True, some of the reasons for our current state aren’t of his making and we can go into a long history of the government’s failure to implement its own structural reforms that would have aided our electricity situation.
Still there’s an organisation that over the past few years has needed to be led, I think we can now begin to ask whether De Ruyter is managing to turn around the ship or at the very least slowing its slide. It’s a difficult answer and to be honest, not deserving of a good grade at this point. Where is the corporation restructuring, the unbundling into its three separate units? We can blame politicians for a lot, but where does he begin to bear responsibility?
Year three is the year we will judge much more critically – as a man from a listed entity, he will know that too. Eskom still seems an organisation drifting to its inevitable crash – in a developing economy in need of a strong industrial base to suck in employment – it’s a rather uncomfortable place for all of us. Private sector funded windmills alone won’t be our salvation.
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