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Something unique about this BrandAnyone contemplating a career move or organisational shake-up would do well to consider Brand Pretorius’ take on the lines of distinction between different corporate entities.
Pretorius is quite open when he talks about the dark days that followed his 1995 career move.
He was a leadership icon when his business card changed from “managing director, Toyota SA Marketing” to “chief executive, McCarthy Motor Holdings”.
On paper, and in person, there could not have been a better candidate. His credentials are impeccable; his list of awards and achievements legendary. He joined Toyota at age 25, fresh from attaining an MCom in Business Economics. He stayed 22 years. In the seven years he was MD, Toyota became the market leader.
Then came the move to South Africa’s largest motor retailing group. Could he be as passionate about multiple brands as he had been about Toyota? Yes. It was about the experience, not the marque. It was about customer satisfaction – that is the language this man speaks.
But his words failed to hit home. “People didn’t get me,” he says. With titles such as “Communicator of the Year” and awards such as Best Boss in SA under his belt, you had to wonder: what was wrong with these people?
It took him a while to realise he was speaking a language that his team did not understand.
“Leaders have a profound influence, but their influence can be outweighed by things such as the trading and business environment, the sector, the history of the organisation,” he says.
“People are affected by these factors – and people determine the content of conversations. If you want to be a constructive participant, you must adapt. Otherwise you will remain an outsider.”
Part of the problem was that Pretorius had a wealth of marketing experience, but McCarthy was a retail company. “In the retail environment, time horizons are shorter. You have greater sets of urgency. Transactions are taking place every day.
“A trading mentality is required. The pace is quicker – it’s the nature of the business. People were investing their energy in different things. Their vocabulary was different,” he says.
Pretorius, by his own admission, was too abstract. “I put too much emphasis on qualitative issues. Some of my communication was not necessarily relevant.
“At Toyota, market share was one of the most relevant indicators. We tracked it by sector, market segment; in all sorts of ways. We were always acutely aware of our position relative to other motor manufacturers,” he explains.
He was very interested to find out what McCarthy’s market share was. “But to them, this wasn’t a key statistic – profitability was. I would talk to people about market share, and they would be thinking, ‘irrelevant!’.”
McCarthy was doing monthly assessments of its various franchises with emphasis on profit forecasting for the next six months. Pretorius was attempting to get the team on board in developing a 10-year plan.
“It was difficult to connect initially,” he says. “And if you don’t connect, you have no influence; and if you have no influence, you can’t lead. There was very little interest in even a three-year plan.
“I’ve learnt over the years that position, authority and power count for very little. You have to earn a mandate to lead. It cannot be demanded. Issuing instructions simply doesn’t work. You must get through to hearts and minds if you are to be effective,” he adds.
It is as Antoine de Saint-Exupéry, the French writer and aviator best remembered for his novella The Little Prince (Le Petit Prince), said: “If you want to build a ship, don’t herd people together to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”
Communication is the critical skill, says Pretorius. “I had to listen, take ownership, adapt. I had to expand my frame of reference. I had to effect an alignment between the way I saw the world and the way they experienced the world.”
Meanwhile, the environment to which he was adjusting, was in the process of changing.
McCarthy was a focused motor group and a listed company. It had grown mostly by acquisition, but vehicle manufacturers became sensitive to the balance of power. Some refused to allow McCarthy to continue acquiring new franchises and dealerships. They imposed a ceiling on the company’s growth – and shareholder’s expected growth. The company was obliged to consider other options.
In 1992, it merged with Prefcor – a large retailer of furniture, clothing and building supplies. McCarthy was then a mass retailer.
It was a diversification strategy that went horribly wrong in 1996/1997. Prefcor sold on credit to the lower end of the market, but with the introduction of cellphones, and the legalisation of gambling, spending patterns changed.
People were still buying, but when the interest rate spiked, they stopped paying their debt.
The division ended up in “enormous trouble”, says Pretorius, eventually writing off R1.3 billion and ending up technically insolvent at the end of 1999.
Pretorius was offered the kind of challenge at which a sane person would baulk: take over the entire operation. He accepted, and became CEO of McCarthy Limited in October 1999.
Who takes on such a challenge? The company owed close to R1.5bn.
“Many thought McCarthy was doomed,” says Pretorius, but he felt there was hope. “We ended up convincing a consortium of eight banks to recapitalise the group.”
The banks were investing in Pretorius. With characteristic humility, he says his decision to stay “may have influenced some stakeholders positively”.
Converting the debt to equity gave the consortium 85% ownership of the group. Pretorius would report to the eight banks for the next three years.
He uses “abnormal situation” to describe the period from 1999 to 2002.
He again had to tune into a new language. The shareholder agenda was non-negotiable, and the focus was clear: refocus the company, get rid of non-core businesses, option the cash flow, and repay the debt.
“Key conversations focused on these priorities. Some extremely difficult decisions had to be made. Many people were affected,” Pretorius recalls.
He regards the experience as proof that leadership is not about glamour or power – it is a responsibility. “It was all about the financial performance of the company, retaining the confidence of financiers and keeping hope alive,” he says.
“Initially, we had one objective – to survive. This galvanised us. It became a calling. To see how people at all levels optimised their resources was humbling. When your back is against the wall and the gossip is that you won’t survive, and to then see small miracles… it’s a reminder of the power of the human spirit.”
The sense of achievement and of being in it together is clearly something of which he is proud. “It was a privilege to be part of a team that joined hands to such a degree. A special bond was created during this time, and it still exists.”
Pretorius says he learnt much about the power of hope during this period, quoting Napoleon (“Leaders deal in hope”) and Nelson Mandela (“Hope is life itself”).
“There had to be substance – we had to deliver results on an ongoing basis, earn trust and confidence on an ongoing basis, but the over-riding imperative was to keep hope alive.”
What about work-life balance? “It was impossible,” he says. “But I was incredibly blessed. I worked with an outstanding team – people whose competence and commitment and perseverance were unparalleled.”
I rephrase the question: what about family? “Inevitably, there were consequences,” he says guardedly. “There was self-neglect, and neglect of family. But they understood.” They understood that for Pretorius, this was a calling.
“In its heyday, McCarthy had 1 500 retail operations and over 20 000 employees. After restructuring, it was down to 7 500 employees.
“We sold some businesses, and we closed some. At least we got through the rough times.
The livelihood of 7 500 people is not something I take lightly,” he says.
“And let’s be candid, shareholders also suffered. McCarthy peaked at R21 a share. It bottomed out at 18c. Shareholder wealth was destroyed on a massive scale. As the person entrusted with the recovery of the company, I was very mindful of this.”
The sacrifices paid off. The company survived. But the banks had 85% ownership. And banks work in a particular way. Notably, they like to limit risk. “There was always a sense of being handcuffed during this period,” says Pretorius.
Enter Bidvest. Pretorius bumped into David Rosevear, then Bidvest Group financial director, at the airport, and jokingly asked: “Why don’t you buy us?”
Three weeks later, it did – at 35c a share. It was January 2004 and McCarthy was now, as the slogan goes, Proudly Bidvest.
Bidvest is one of the world’s top 40 companies, according to a global ranking published by Business Week in 2009. To be considered, companies had to produce at least $10 billion in sales in 2008.
Bidvest is opportunities-focused in a way that few other organisations can claim or could bear.
“The Bidvest culture is one of high energy. The company is nimble, fast, entrepreneurial. You’re expected to use your initiative and be creative.
“Initially,” he says, “I couldn’t handle the autonomy.” Then came the pressure to deliver sustainable growth and quality earnings.
The Bidvest environment is a demanding one, says Pretorius. Good deals are paramount. “Brian Joffe is one of the most successful entrepreneurs ever. He is a super-duper deal-maker. It’s all about lifting your eyes, scanning the horizon, being alert, being connected to the real world.”
It is a performance-driven culture. “You have incredible freedom, but expectations are high.
“People are stretched. If you don’t perform, life can become difficult,” he says.
One thing about an organisation such as Bidvest, he adds, is that there is no real interest in problems or difficulties. “You must talk the language of solutions. Problems are just not acceptable.”
Which corporate style does he prefer? His answer has more to do with corporate attitude.
“McCarthy and Bidvest are among the least pretentious organisations I know,” he says. “There are no grandiose titles, no standing on ceremony.”
He is amazed how people tend to be in absolute awe of senior directors in banks. “The customer is number one!” he says, perplexed.
We talk about how companies are keenly customer-focused on the way up, how arrogance tends to set in once success has been attained, and how arrogance seems to be the first step downhill.
Which company does he admire most? It is difficult to say. Many companies are too focused on making money. He prefers a more holistic approach. “Probably Hollard – informal, entrepreneurial, results-focused, fun, innovative, team-based.”
He sums up his own business philosophy as: head, heart, hands. A clear vision, sound strategies, and the right principles and values; empathy and compassion; and acting accordingly.
Leaders should set the tone, he adds. “Visible leadership is a time-intensive activity, but how do you build quality relationships? Not through DVDs or memos.”
Pretorius thrives on personal interaction. It enables him to give people his undivided attention. This is how he makes people feel special, which he routinely does.
One thing that makes life difficult: “All the governance issues. Board meetings, audit committee meetings, risk committee meetings… as much as half of my time is mapped out a year in advance,” says Pretorius.
“McCarthy’s recovery” must be immensely gratifying. Is he happy now?
“Not really. There are still many challenges. We live in a country where the needs are overwhelming. It’s a country that engages one.
There are many needs, many opportunities. You can fulfil the essence of human purpose every day here,” he concludes.
Caroline Gibbs
