Retired CEO of McCarthy Limited and author of In the Driving Seat: Lessons in Leadership, Brand Pretorius, encourages leaders to invest in people and create an ethical culture.
“The essence of human purpose is to make a difference; this also applies to companies.”
Brand Pretorius, respected ex-CEO of McCarthy Limited, has always found fulfillment in the soft issues. While keeping a strong focus on results, he is not fanatical about the numbers. He believes this was the key to his success as a leader. “When there is an absolute obsession with numbers, it is almost impossible to inculcate a culture based on long-term sustainability,” he says.
Pretorius started his career at Toyota and gained early exposure to sustainability issues at their headquarters in Japan, where the head of planning had a 50-year plan for all major markets. “I learnt that if you want to build a great business, you need to look at tomorrow and adopt a broader view. Toyota followed a very principles-based model, they did not have an opportunistic approach at all,” he explains.
Returning to South Africa, Pretorius applied and built on what he had learnt. Today he distills his experience into three key building blocks for a sustainable business: invest in people, inculcate a culture conducive to people doing their best, and live according to the right principles and values. “I’m not a sustainability expert, I’m a believer. Our most important task is to create a tomorrow that is going to better than today”.
Invest in people
The biggest challenge in Pretorius’ business career was to earn the commitment of his employees. He believes that in order to engage their minds and touch their hearts you have to be willing to serve. “You cannot instruct people to become engaged or demand people to respect and trust you, this has to be earned, ” he explains.
Pretorius points out that to optimise customer satisfaction, you have to optimise employee satisfaction. One way of doing this is to involve employees in corporate social investment such that caring becomes part of the culture. “Leaders need to be hard headed when it comes to results, but have a gentle heart when it comes to people.”
South Africa faces significant labour issues. Pretorius believes that these are not just a business issue, they are a social issue too. “Business has to connect with the realities outside of the workplace and see workers in their totality. There is a tendency to condemn the behaviour of workers when what is needed is some sensitivity to the context.”
He believes that business should adopt a more inclusive approach to labour relations, one based on trust and respect. “We should find things to unite us and agree on a set of shared values,” he suggests. According to him a wage agreement on its own is insufficient, a broader agreement on protocol is needed. Pretorius cites the example of the German accord between business and labour, which is based on the principles of a common destiny and co-determination, and questions whether the same is possible in South Africa. He concludes that as long as labour relations continue to be politicised and self-interest comes into play, such a social contract would not work in this country.
Another people issue facing business in South Africa is the huge inequality in pay. Pretorius suggests that in the run-up to the financial crisis of 2008 pay levels got out of kilter, and that the absolute level of executive pay has to be reassessed. He thinks that addressing this will be a gradual process, but one that has already started, due in no small part to the pressure being exerted by shareholders. “The trend of rising executive pay levels has been arrested and we are seeing some restraint with a number of chief executives opting to forfeit their bonuses. There appears to be a greater sense of responsibility and sensitivity.”
Live according to principles and values
According to Pretorius, the third of the sustainability building blocks, embedding priciples and values, is a vital role business leaders need to play. Ethics is not just a compliance issue, it needs to come from the heart. If the example set at the top is not right, you are fighting a losing battle. “Ethical behaviour and integrity flow from example and leaders need to set an impeccable example at all times. Only then will ethical behaviour become part of the organisation.”
Sound corporate governance is critical and shortcuts cannot be taken. Pretorius explains that employees need to see that the right values feature at the top of the leadership agenda and are consistently applied. If this is not done, credibility is lost. He cites an incident where unethical behavior was exposed at a senior level and the chief executive did not adopt the policy of zero tolerance. “This single incident started a cancer in the organisation,” he remembers.
Business in society
Pretorius acknowledges that corporates are part of a broader community and have wider responsibilities than just to shareholders. He states that “the essence of human purpose is to make a difference; this also applies to companies”.
These responsibilities and ways of making a difference include corporate social investment, transformation and protecting the environment, all of which need to be incorporated into an integrated approach to sustainability. According to Pretorius “the key responsibility of business is to build a strong foundation for the future”.
Drawing on his extensive experience in the motor industry, he explains that its biggest challenge is becoming globally competitive. This is the key sustainability issue for an industry that is the second largest employer in the industrial sector, employing over 300 000 people. It is particularly challenging given South Africa’s geographical location (high transport costs); its escalating input costs (electricity and wages in particular); the limited domestic market; and labour unrest that threatens the consistency of supply.
The industry’s environmental and product standards are largely set by global parent companies. These companies have strict policies and criteria that are adhered to in South Africa. They are also investing a ‘disproportionate’ amount in research and development of hybrid, electric and other greener vehicles.
On transformation, Pretorius feels that the motor industry has made limited progress at both the manufacturing and retail levels. He explains that the industry is very progressive with its CSI, but could and should be doing more on the other transformation components.
His advice to business leaders across sectors is to revisit fundamentals and not get carried away by trends and complexity. He believes that leaders need to be senstive to the needs of all stakeholders and return to the important things: vision, priciples and values. He closes with a warning that “selfish capitalism is no longer appropriate”.
About the book
In the Driving Seat (Tafelberg) traces Brand Pretorius’s four decades in business leadership, which required him to make hard and unpopular decisions with an eye on the long-term. In it, he elaborates on why he believes ‘servant leadership’ leads to great business results.
Trialogue ran a competition to win three copies in our Sustainability Review newsletter. The winners are: Nigel Burls of mlh Architects, Heidi Bartis of Distell and Rafiek Sharfuddin of Imperial.