Although the spate of strikes, revenue losses and the termination of a government subsidy all add up to a daunting challenge, to say the least, Chris Hlekane is upbeat that a rebranded and repositioned Sapo is set to turn the corner. An integrated communications platform anchored in Mail, Banking, Retail Logistics and Property, Sapo is set to innovate and grow – particularly through its property portfolio and beyond its traditional line of business – in order to meet the changing needs of the population, Hlekane stresses. “The reason for Sapo’s existence is guided by its universal service obligation. Government expects a communication platform from us. However, it doesn’t mean we cannot integrate other modes that will meet today’s communication demands in terms of email and e-business. Equally so, within our retail proposition, which includes vehicle licence renewal, it also means that we could move from our traditional retail offering into an e-based solution. Today, if you look at Europe and other markets, there’s a very big push for online shopping,” he explains. “Sapo’s large property portfolio provides access to our market,” he adds. “We’re one of the largest networks, which I believe is our biggest asset. We have in the region of 1 600 of our own, fully fledged branches or touch points (where we meet our customers) and another 900-odd retail postal agencies or third-party touch points.” The latter are established to improve access points where it is not viable to open a fully fledged branch. These access points are split almost equally between urban and rural areas. At the same time, to optimally service the different nodes in the communications space, Logistics is consolidating under the banner.
of Courier Freight Group (CFG) to provide one seamless service that can realise optimisation and distribution benefits. Hlekane is particularly excited about the postcode review project, which will allow every citizen of South Africa to have an identity through his/her address. Embedded in geo-coding, the new postcodes will not only give all citizens an efficient address that will be globally recognised, it will also facilitate and promote financial inclusion of the currently unbanked, he explains. “At present, of the bankable population, only 67% are banked. The majority of the lower LSMs, say up to LSM5, merely put money in the bank and take it out again. So there’s a lot of work to be done within the banking space, helping people understand how the entire financial system works and how savings come into play. The new address system will not only enable us to locate everybody in rural areas, it will also create the ability to interact and transact with people from a banking, communication and marketing point of view.” Hlekane firmly believes the Postbank corporatisation is the right place for the bank and the Post Office. The corporatisation application has just been concluded (end July) with the objective of being granted a licence at the end of 2014. However, Sapo is pushing very hard to try and expedite this. “We believe that Sapo can be efficient and cheaper than the current banks. And we do believe that we should be able to aggressively position and deliver our affordable product to the market that we serve as a state-owned company. “Sapo has received R480 million from Treasury for the corporatisation of Postbank, a strategic priority. The funds will mainly be used to focus on the upgrading of the infrastructure of the bank and to source resources in the form of human capital where it is usually very difficult,” he adds. “The banking sector is very competitive, and to get the right skills we need the right ‘traction’. While we have the infrastructure and the largest distribution network – larger than any of the biggest banks – in SA, we need the capability, which we can build, buy and integrate. “We have used partnerships before, with the likes of Standard Bank, but we need to migrate into our own fully fledged bank because the current legislative framework for Postbank “Corporatisation will lead to Postbank being able to meet the main objectives for its formation, namely to conduct the business of a bank that will encourage and attract savings among the entire population, render transactional services and lending facilities, increase financial access and lending to the rural and lower-income markets and ensure that rates and charges take into account the needs of the people in the lower-income market,” he explains. “Further to this, Sapo’s universal obligation requirement demands of us to review our growth point every year. We are growing by 50 touch points for this year and next year to ensure that we continue to extend our reach for services that are fundamental for the economic growth of the country,” Hlekane adds. This will also allow Sapo to efficiently assist government with the distribution of text books and even serve as a logistics platform for the distribution of chronic medicine in a National Health Insurance (NHI) environment, Hlekane reckons. Having developed the software for the set top box, a device that converts digital signals received either via terrestrial means or via satellite or cable to normal analogue video and audio for presentation on a normal television set, Sapo is already a partner of choice in the SABC’s migration to Digital Terrestrial Television (DTT). Hlekane says while Sapo currently has sufficient capacity in terms of human resources, new growth would require a marriage between older, experienced people in the organisation and new blood with new thinking to ensure the right balance. “Intellectual capital is key in any organisation and, together with change, we need to embrace it if we want to achieve our business objectives.”
Turnaround strategy
This brings him to the turnaround strategy, which includes a number of deliverables where innovation will be key. First and foremost is economic delivery, Hlekane stresses. The termination of a subsidy from Treasury means that Sapo needs to become economically sustainable. To this end, all the key projects referred to above, such as the sourcing of intellectual capacity and new thinking, will contribute. In terms of the latter there is, for example, the lesser-known Trust Centre, an authentication engine that enables the movement of data in a secure manner, allowing customers to transact electronically.
“We are therefore still moving information, but instead of it being paper-based, it is now electronic. In this way we are aligning ourselves, from a product point of view, to the changing communication environment,” Hlekane explains. The customer, both individuals and corporates, is the second ‘pillar’ of the turnaround strategy. “While previously the focus was strongly on elevating our infrastructure, network and capability, we probably spent less time on understanding our customers, their needs and their priorities. “The question is: Have we remained the trusted brand? I believe within a certain segment we have, but we need to regain that ability to remain the trusted brand throughout, which will make people comfortable to transact and they, in turn, receive the efficient product delivery they expect. “Thirdly, we cannot do this if we don’t take our people along. We really need to re-engineer our environment and get our people to understand the opportunities as well as the challenges facing Sapo. Our people need to realise and come to appreciate that our customers – both individuals and corporates who use our platform to do business, locally and regionally, as well as the unions at stakeholder level – are key; we need to reposition ourselves in terms of all of our customers in order to be a force to be reckoned with.” Consideration of the environment is equally important and yet another key deliverable. “We have a large footprint and praise ourselves for our distribution capability, but we also affect the environment with our size. With a single letter going through a number of nodes, the distribution value chain is long, so we need to reposition ourselves as environmentally friendly by limiting emissions as we distribute letters.” Born in the small town of Khuruleni in Limpopo, Chris Hlekane grew up with his mind set on becoming a doctor. Logistically, this proved to be too difficult and instead he opted for a BSc Hons in Chemistry at Fort Hare University, which finally steered his thinking away from medicine to engineering. “I realised that my ‘thinking head’ was probably more aggressive, and I became excited about variability, mobility and the possibility of influencing things. I decided that I always wanted to be in leadership, hence my career moved towards a space where – in each industry – I tried to capture a new learning, from technical, systems and human resources to brand, acquisition and restructuring.” A fulfilling career at several top South African companies brought a certain roundedness, he muses. These companies include the likes of Murray & Roberts, Colgate Palmolive, Nampak, Coca-Cola, L’Oreal, MX Health and Airports Company of South Africa (ACSA). When the latter acquired the management rights for Guarulhos Airport in Brazil, he was seconded there as COO.
Considering himself a “very challenged person not good at balancing life”, Hlekane reckons the capacity of all people depends on the extent to which they apply themselves, so he also spends a lot of time reading business literature. In his “own time”, the engineer in him thoroughly enjoys fixing and rebuilding old cars (which, again, links with the notion of fixing a business), walking or hitting a few golf balls (“I don’t believe in handicaps”). His sanity, he stresses, is found in church. “When all else is said and done, this is where I go to reflect on who I am and what my existence is all about.” His pharmacist and entrepreneur wife, Pumza, and three children – daughter Amu (22), son Mawi (19) and daughter Lala (16), feature prominently, and as a family they enjoy travelling, alternating between overseas destinations and Africa. “While I love spending time with all three of my children, I also appreciate and respect their individualism. So, while we often travel together, at times I travel with them individually because it’s the same as in business: direct interaction has a different value. You can coach a team, but you also need to coach them individually.” When he formally retires one day, Hlekane would like to return to his roots to add value as an agent of change… “to encourage the youngsters and give them more faith to believe that they, too, can make a difference”, he concludes. In all of the above, innovation is paramount. “We need to bring the context of innovation to product and service delivery. For example, service delivery doesn’t always have to be counter-based. Instead, we could use mobile technology and self-service systems to transact. Not only will this help us reduce the demand for bricks and mortar, it will align our service with the needs of customers. “At the same time, innovation is very expensive, so, through strategic partnerships, we can buy skills, exchange learning, increase efficiencies and fast-track change without having to reinvent the wheel,” he adds. Asked if he is satisfied with the progress of operation turnaround and innovation, Hlekane responds: “We are on the right track and progressing well. However, pace is a function of the challenges facing an organisation. If you want to see double digit growth in a single digit environment, you will feel that you’re not moving fast enough. Everything should be looked at against the background of the current reality. Change doesn’t happen overnight; it’s a process.” Hlekane believes that the appointment of a new minister of communication will not derail the transformation process. “Firstly, if Sapo didn’t have a plan, I’d be worried. But we do have a board that has not changed, so the context of what we need to deliver will not be affected. And, we are very clear about our strategic intent regarding what needs to be done, so we will forge ahead to effect all the necessary changes and become an employer of choice.”