AFTER THE BELL: Whether Boxer or the ANC, succession planning separates strong institutions from fragile ones

One of the hardest things for any leader to do is to manage who will take over from them.

Whether it be in the corporate world, rugby or the ANC, it’s incredibly hard to do.

And this is why so many people spend so much time and energy trying to get it right. It’s never really about the person, it’s about making sure the institution or company or country survives afterwards.

Boxer today announced that someone who must know the company incredibly well will be taking over from Marek Masojada as CEO.

The Sens statement describes Justin Galloway, who will take over from him, as someone with huge understanding of the company. They say he helped to develop the discount format that is basically Boxer’s reason for existing, and then managed its distribution chain.

While I know virtually nothing about what goes on behind the scenes of a supermarket chain, I’m sure that if you have managed the distribution chain you must know the business very well.

I’m sure he could tell you what the traffic is like in Kareeville in De Aar at lunchtime on an arbitrary Tuesday in October. He is, if you like, the ultimate insider.

Long and happy history

There is a long and happy history of insiders taking over. It can be the best expression of faith in the CEO that someone whom she would have helped to mentor would be taking over.

Capitec did something similar last year when the legendary Gerrie Fourie retired after running that show through a particularly successful decade. They appointed Graham Lee, someone who had been a part of the bank for a very long time.

And it was obvious from his history that he had intimate knowledge of the institution he was taking over.

But sometimes companies go in another direction. For various reasons they feel they need to get someone from outside. Perhaps there is a particular problem they need fixed, or they need someone who has a specific skill set to get through a particular period.

Presumably that’s why Woolworths decided to appoint Roy Bagattini as their CEO in 2020. He had been working at Levi Strauss around the world before coming back to his birthplace to run Woolies.

A few years later, when it was time for him to retire, the situation had obviously changed and they decided they needed an insider in Sam Ngumeni. Of course, there are often many insiders to choose from.

Woolworths probably picked him because they decided they wanted to focus on their food section, which is the department he led for a long time.

This is one of the reasons that investors look so closely at the person who is taking over. The appointment is the strongest possible hint of the future direction of the company. They now know which way Woolies will go.

In the case of Boxer they know what will happen too. They can be pretty sure that Galloway will be continuing in the same vein as Masojada. Just as Lee has done at Capitec.

While the Sens statements always put a happy gloss on these announcements, I often wonder what was going on behind the scenes.

Mad scramble for the top job

Was Galloway seen as the right person to take over 10 years ago and groomed for the job to the point where everyone knew it would be him? Or, was there a mad scramble for the top job and is he now standing on a heap of dead corporate careers?

It is in the interesting nature of things that once you get to a particular level in the boardroom you never speak out about what happened, even if you are at the losing end.

When Kennedy Bungane resigned as CEO of African Bank it was obvious to anyone paying attention there had been a falling out with the board. But he has a future career to think of, perhaps at another big bank.

Which is why you would have heard not a word about what really happened.

I suspect it will all be very different within the ANC. It has been one of the most amazingly consistent facts of our politics over the last eight years that President Cyril Ramaphosa has never said who he wants to take over from him.

There is no obvious successor.

And I can’t help but feel that the succession battle, when it comes, will actually be quite difficult and politically bloody. With the result that the party will be badly damaged by the time it goes into the 2029 elections. And its customers, voters, might well walk away from it.

I know some people still believe an outsider, a businessman, will take over. They think Patrice Motsepe will save the ANC.

This is where politics and business are different. You really cannot bring in an outsider to manage a party. It’s been done in various places and it hardly ever works.

And it won’t work for the ANC.

I don’t know what the ANC’s current CEO might have under his hat. But unless it’s incredibly good and magical, he may well have failed in this one crucial test. DM