The CEO of the Ocean Basket chain has powerful ideas on how to fix SA

You can also listen to this podcast on iono.fm here.

JEREMY MAGGS: About six months ago, the feisty chief executive of one of the country’s more prominent chain-restaurant brands wrote an open letter to asset managers and property owners. Now, time prevents me from reading the entire missive, but essentially in a post-Covid environment she asked a very pertinent question: ‘How do we shift our relationship from you being a lord and me being a servant?’ In many ways when I read that I thought that was a real metaphor for South Africa in terms of balance, disclosure and an even playing field.

The letter went on to say our conversations need to change. ‘Just as you (landlords) expect us (the restaurant industry) to share our turnovers with you, so you can claim a percentage, we would love you to share your information with us.’

And beyond the anxiety and even anger in the letter, it’s also a useful template, I thought, for how to get things right. Essentially, the more that information is shared, surely the quicker solutions will come.

A very warm welcome to the Moneyweb podcast FixSA. I’m Jeremy Maggs. In coming weeks our guests will be asked how we can make things better in this country. How do we improve matters? How, in the shortest space of time, can we become a competitive and successful nation?

Grace Harding is the chief executive officer of the Ocean Basket Group, and also speaks for the restaurant collective. Speaking to the Financial Mail some time back, she stressed the importance of education in fixing South Africa. I wonder if she still feels that way? A very warm welcome to FixSA, Grace Harding. Before we get to education, maybe let’s start with a macro picture as far as your job is concerned. Covid, then the power crisis – how is the restaurant industry doing? Is it on its back, still on its knees, or trying to get up?

GRACE HARDING: Probably a bit of everything. The industry is battling. Load shedding is not only about no electricity to prepare food, but it impacts the entire value chain. As we know, without electricity there are water-pumping issues. We’ve just had drama with potatoes from our chip supplier, because they had to choose between using electricity for storage and using electricity for irrigation. And of course they couldn’t have both.

So it’s impacting the industry in so many ways, from outages in a restaurant to suppliers really battling, to the cold chain being interrupted. I must say, never in my life did I think that I would witness something so debilitating.

But we have to find new ways. We can’t just close shop and cry, ‘What do we do?’ So we are working on new solutions.

JEREMY MAGGS: We’ll talk about those new solutions and those new ways in just a moment. But overarching all of that, Grace Harding, is the importance of resilience and I guess, to a degree, trying as hard as you can to remain optimistic. It’s not always easy, though.

GRACE HARDING: I think the thing that works during times of struggle is unity – and that’s what happened during Covid. The South African restaurant industry is not nearly as united as it is, for example, in the UK. It’s a very competitive industry. The net and the pool of customers is not as huge as it is in the UK, so restaurateurs traditionally have not wanted to collaborate, and now we are sitting in a room with most of the top brands, not all of whom have committed.

When there’s unity, you feel more resilient because we definitely can come up with better solutions when we have conversations, when we all have the same intent. So that really is helping the resilience.

Yes, of course we have to be resilient, but I always say to my colleagues we have to pretend we only woke up in the world last week and this is all we know, because a lot of our sadness or our anxiety does come from a day gone by and we must be very, very careful to not look in the rear-view mirror for too long, because then we are going to crash.

JEREMY MAGGS: Let’s take the discussion beyond the restaurant industry, but let’s pin it on that word ‘unity’, if we can. What’s your secret, your management secret in terms of inculcating, encouraging and managing the whole process of unity? Can you do that? Is it easy to do?

GRACE HARDING: It’s not easy. Working with people is never easy, because the first thing that’s needed is a very, very crisp and clear vision – and I think that that’s what we need for our country. I was watching Sona (the State of the Nation address) and I couldn’t help thinking: how is anyone following this? Why don’t they have slides, or categories of information, or something? It’s so difficult to hear the intent in all the messages.

So how do you create unity? There’s got to be a vision, and the vision has to belong to everyone in the company or in the country, all the stakeholders.

That vision has to be repeated and repeated and repeated and repeated.

And then of course, leadership is all about the management of culture. So it’s about clarity. It’s about being deliberate, it’s about getting rid of people when they’re not on the same page as you, when they choose that this page is not for them. It’s an ongoing job. It’s exhausting. You never, never stop in leadership. And if you’re going to try and unite people with different intent, which is, I think, what’s happening in this country – we’re trying to unite people who all have their own objectives – you’re not going to do it; it’s not going to work.

JEREMY MAGGS: So how do we get that right? Let’s stay with that word ‘unity’. Why do you think it is that we are unable to collectively come together and fix the country? Is that divide of cooperation and collegiality, do you think, too wide now, too entrenched?

GRACE HARDING: I think it’s so layered. It’s like the most massive onion. We are dealing still with remnants of the past. The government departments are not always very amenable to have discussions with certain people. There are so many other agendas. Like in our industry, for example, the ZEP [Zimbabwean Exemption Permits] permits is all-consuming, and it’s not easy to collaborate.

So what is happening, I think, if there’s one word, is greed. It’s all about greed.

Politics is the strangest profession because running a country should be like running a company.

A CEO is not accountable to shareholders, a CEO is accountable to growing and building a thriving business so that the shareholders will get a return on their investment. And I think it’s greed, I think it’s personal agendas. Perhaps there isn’t a great work ethic, [and] there aren’t deliverables.

I don’t know a lot about how governments run and how countries work. I’ve had a little bit of interaction with some of the DDGs [deputy directors-general] in this country, and it’s just not easy to unite when we aren’t all on a common page and someone in a team must accept help. So we have put out message after message to say we want to help. In our industry, let us help, let us work with you around your Zimbabwean concerns, don’t just make us [dismiss] them. They’re human beings.

But it feels like the management and executive team of the country are doing their work and the rest of us are doing our work. I’m sure they collaborate with huge businesses.

I don’t know if they meet with sort of the big heavy-hitters of the country, but I think there’s a place for smaller conversations in smaller rooms – and slowly, slowly to change.

But it’s the reason for change. So I don’t know if my reason is the same as … a government official’s reason.

JEREMY MAGGS: Grace Harding, just for the purposes of clarity, when you talked about the Zimbabwe issue, you were talking about staff immigration and xenophobia, am I correct?

GRACE HARDING: Yes. It’s the ZEP project that the government is busy with now, to say that if you don’t have a permit you can’t stay. But the way to get a permit is completely impractical. You can’t get a permit.

JEREMY MAGGS: Let’s get back to fixing South Africa, Grace Harding. You talk about greed and obviously all the consequences that flow from that. In your opinion, then, is that the biggest problem that we are facing in this country – is that the one thing that we need to fix?

GRACE HARDING: I wouldn’t know where to start. But if I compare countries’ with companies’ excos [executive committees], and all the case studies of companies that have gone bang, let’s look at Enron. Let’s look at Kodak. Kodak was 140-something years old. It [saw] a combination of greed, [self-]preservation, and a belief that ‘I know it best’. Those seem to be the themes that run through companies that don’t make it, or who really, really fail.

The companies that do make it are very much centred around their stakeholders, the customer understanding what’s going on, adding value to the community. That is a conclusion I draw about what could be contributing to it.

But I don’t think any of us understand the complexity of what is going on in the political arena of this country.

JEREMY MAGGS: It’s back to that word ‘unity’, though. So if you’ve identified the problem – and that’s the inability for us to come together with that common vision that you talk about – where in your opinion would you start the fix? Maybe the best way to come at it is, again, using business principles.

GRACE HARDING: I think it is about using business principles. I also think it’s about deconstructing this mass of what has to be fixed. We’re going to appoint a new minister of electricity, and then I think to myself, ‘Oh gosh, where does this poor man or woman start?’ So I think maybe they should break it down. Maybe they should break it down by area, by industry, [and] get people together, set up subcommittees.

But there are people in this country who really want to contribute. It’s like you are begging to add value, and how you create unity is you say, ‘Should we come together? Who’s going to lead this?’ And then we have to plug the hole of all the people leaving this country, because a lot of our brains are on their way out.

Yes, I think it has to be broken down. I’m not sure where to start. It’s massive.

But the principles of running a well-governed, audited company is how we should run the country. Where are the audited financials of South Africa? Where’s the governance?

When we borrow money or when we have to do a deal, we have to produce all these papers. We have to start there, don’t we?

JEREMY MAGGS: What I’m hearing you say in this whole deconstruction narrative is also [about] getting a seat around the table, particularly if you are not a big player. How then, in order to begin that fix, Grace Harding, do you force your way into the room? Do you take your seat at the table when people sometimes simply ignore what you want to say?

GRACE HARDING: Well, we are trying that with the restaurant collective now, because otherwise it is chaos. I understand the government department not wanting to talk to 19 restaurant groups and another 5 000 individual restaurants. I think it’s just about making the calls. Some of the guys are very receptive. It is a slow process, and of course we need the private sector to find the time to do it. I think, [like] a lot of the CEOs in this country, we have many jobs.

When I engage with CEOs, for example in the UK, they can’t believe the stuff that we’ve got to deal with, that we worry about.

So we’ve got to sacrifice time and we’ve got to keep on banging down the doors. They do open slowly. They really, really do.

Have I experienced some breakthroughs? Well, I had a meeting with an ADDG [acting deputy director-general] of immigration a few weeks ago, a Mr [Yusuf] Simons. It was really interesting and what I realised is, I don’t know what I don’t know, and he doesn’t know what he doesn’t know – so let’s see where it goes. But that is a tiny little pin [needle] in a massive, massive haystack.

JEREMY MAGGS: Do you still think there is a willing majority of people in this country who want to fix things? Or have we got to that tipping point now where people have thrown up their hands and they’re simply in the mode of self-preservation?

GRACE HARDING: I think it’s a bit of both. South Africans are South Africans, and I still think that there are those people who are absolutely determined. I come across them every day. And then there are days where people do want to throw in the towel, and they are throwing in the towel. We have all seen the emigration stats. There was an article the other day about the pressure that’s going to be put on our taxes because it’s the higher earners who are going. And the young ones, young educated people, want to leave this country – black, white, pink, purple, girls, boys … everybody. They are all out of here. So I think it’s a bit of both.

It’s the toughest I’ve ever experienced it, even tougher than Covid, because, funnily enough, during Covid there was unity and the president was talking to us nearly every Sunday.

We were terrified, but I think it was so good that he was talking to us, and we were fighting something external. So we were brought together to fight a pandemic that we didn’t create. Now we are overcoming a pandemic that has really been inflicted upon us by myriad different influences.

JEREMY MAGGS: You’ve spoken, Grace, about the complexity of the situation. In any complex problem-solving there are constant obstacles that are thrown up. So two questions. How would you overcome those obstacles – and often those obstacles are simply surprising or unknown. And secondly, who would you call in to help you?

GRACE HARDING: I think overcoming any obstacle is about being curious and getting groups of diverse people in a room. So when we have a problem because our chips aren’t coated – because there isn’t enough electricity to put it through another process – then we get in a room and we say: ‘What are we going to do? Do we give this customer a chip? Maybe that’s not as nice as another chip, and maybe we shouldn’t serve chips for a while.’ So you’ve got to think of the big wild things, but you’ve got to be curious and you’ve got to have discussions with diverse people. Who would I get in the room? I would get a cross-section of people in a room and then I would break up those teams.

I think that CEOs of countries, CEOs of companies, don’t spend enough time on the shop floor at the very belly of a business, to speak to the people on the production line, speak to the guys who are delivering in the trucks, speak to the petrol attendant. If you want to know which car sales are doing well, don’t wait for some fancy article, just speak to the guy who puts petrol in your car. So it’s about uniting, collaborating, being curious and listening.

JEREMY MAGGS: I’m interested in the word ‘curious’. What do you need to be curious about?

GRACE HARDING: You need to be curious about stuff that you really don’t know. I think one of the biggest challenges of being a leader is that unconsciously we could sometimes fall into the trap of ‘We know what to do’.

And the new age of leadership is not about knowing what to do, it’s about knowing what questions to ask, and then shutting up.

So if we tackle a problem and the intent is we need to fix this problem, how do we fix it? It’s not going to be as effective as saying: ‘We have this problem, let us first understand it. Let us see how it’s affecting people, and then let’s see what the three things are that we need to discuss and start working on.’

We’ve lost the ability to diagnose, and it’s because we are in crisis all the time. So it’s a little bit like having a big fire burning and you constantly say: ‘Oh my goodness, where did the fire come from? You all better get out of the building.’

But if we keep on running out of the building because we see flames, we never are going to get to the source of the fire.

JEREMY MAGGS: So let’s assume that you are on course, then, to begin this process of fix which you’ve outlined to us. How do we make sure, Grace Harding, that we stay the course because, as you’ve rightly said, it’s not only a complex problem in fixing the country, but it’s frustrating, it’s difficult. It’s critical that the leadership in this process makes sure that we are motivated enough to stay the course. How do you do that?

GRACE HARDING: Well, first we need a leader. That is a bit of a critical success factor. And it has to be a leader of the nation, not a leader of a political party. It’s like I can’t be the leader of my exco team. I have to be the leader of the entire group of the industry for which I feel responsible. Nothing succeeds without clarity, purpose, clear briefs, tracking consequences, and moving. We have to keep on moving.

The thing that it [seems] is happening in South Africa – and I can only speak as a recipient of the impact of it – is we are just [dancing] the cha-cha the whole time. I don’t even know if we’re doing the cha-cha, the tango. Are we dancing? Is there a live orchestra? There isn’t; the conductor has left. I don’t know where the conductor is. Then there are the crazy people who come and interrupt the orchestra.

So you’ve got to just settle things down and you’ve got to be able to see the road. There’s so much clutter. We can’t even see the potholes for all the [rubbish] that has fallen on the road. So just clear the path, see what you’re dealing with, be deliberate and have good intent. That’s what’s difficult in politics – and that’s not just our country. It’s about what is the intent, really? What is the real intent? How are we going to be transparent about that?

JEREMY MAGGS: If then we’ve got the orchestra all lined up, we have the right conductor, and the music is playing in tune – to extend your metaphor – there’s also the old cliché that you can’t manage anything if you can’t measure it. So what then would define success in terms of the fix? Let’s look at it in a very short-term way, before the end of the year, say.

GRACE HARDING: Well, we have to decide what we are going to fix. You’ve got to start with the culture and the language of this country, the cultural language, the business language. It has to start there. There are going to be milestones. So we are going to paint all the government buildings where go to get passports, and the places where people go, we’re going to paint them. We’re going to have minimum standards.

With the electricity problem we must plot out an action plan, and it must be visible. Even if the action plan is going to take nine years, it’s okay. But the need to suddenly say ‘we are fixing’ is not the intent of fixing it. It the intent of keeping people quiet ‘so that I can carry on doing what I’m doing’.

So everything’s got to be measured, and the measurement has to be: ‘They stole 10 power cables. By the end of this month, we are going to make sure only three are stolen. These are the steps we are taking. Only three were stolen, now we’re going to go down to one.’

So I don’t think it’s brain surgery. I think it’s making a decision, finding a few things, the critical few to start to tackle, because we are dealing with ‘We are going to fix crime and electricity and this and that.’ It’s just crazy. if I had to stand up and present that to my board, they’d shoot me.

JEREMY MAGGS: Unfortunate choice of term, but we get the point. Just two more questions very quickly. I referenced at the beginning of this conversation your saying earlier the importance of education in fixing South Africa. All the guests on this podcast have referenced that in one way or another. So let me pin you down, if I can.

We all acknowledge education is important. We acknowledge that there is a deficit in the system. What type of education are you talking about?

GRACE HARDING: I think if we can focus on building cognitive skills, which is through problem solving, which begins with basic mathematics.

And then the education of teaching people how to engage with each other, of teaching people to listen to each other. We should be teaching that to our children anyway, because so many of the skills that we grew up learning have been taken over by machines and AI [artificial intelligence] now.

The only thing humans have left is [being] human – and to succeed as a human in life, never mind the world of work, you’ve got to be able to think through things, solve things, be curious and be able to learn the importance of giving a damn about others.

And these skills you can teach – communication skills, EQ [emotional quotient] skills, problem-solving skills. What would you do if this happened? What then? Basic mathematics: you’ve got R100 000, what’s the best way to save it?

And once again, private industry wants to help. We want to get involved. But where do we start? You know how often I say I want to do this as a CSI [corporate social investment project], because in the restaurant industry it’s all about people. I don’t even know where to start. Who do I phone, the Department of Education?

I want to start with teenagers, with universities. Where to even begin? Those are the skills that have to be taught, the basic, basic skills. Teach people about life, about saving money, [how] to understand money, to learn to work together, to learn to struggle through disagreements. We’ve been brought up [to think] when we disagree we just fight or hit each other. We are going to get nowhere that way.

JEREMY MAGGS: Grace, that answer segues very nicely into my final question, and it’s one that we put to all of our guests. It’s very simple. When you’re talking to your grandchildren in 20, 25 years’ time, what are you going to tell them about the early 2020s? And in continuing to build South Africa – hopefully we are out of the fix – what is their role as the baton-holding generation?

GRACE HARDING: That’s a good question. First of all, I really hope my grandchildren will be in South Africa. But even when I meet with people overseas, what I would tell my grandchildren is look at what this country has been through. Let’s just take it from even before 1948 [the start of apartheid], and look at the history, look at the richness, look at the possibility and look at the unity, because, you know what, Jeremy, we are a very united nation. We really, really are.

Let’s get out of the political nonsense. This is a very united bunch of people. And I would tell my children that I wouldn’t want to be anything but a South African, and no matter where they live in the world, they must always contribute somehow back to South Africa. They have to do something. It’s not about money, it’s about making a trip, going to help a school, doing something.

In 25 years’ time what will it look like? I don’t know. Maybe we’ll have to be neighbours at the old age home and drink lots of wine – and we’ll see. [Chuckling]

JEREMY MAGGS: And that’s a good place to leave it. A couple of words leapt out at me during this conversation: ‘curiosity’, ‘unity’, ‘real vision’ and ‘leadership’.

There’s no doubt that when you speak to business leaders like Grace Harding, chief executive officer of the Ocean Basket Group, there’s still much to believe in as far as South Africa is concerned, as hard as it may seem right now. My takeout from this conversation is more focus, more diligence, more application, and not to be afraid to challenge the conventional wisdom.

Thank you for joining us, Grace Harding. Thank you very much indeed.

My name is Jeremy Maggs and thank you for listening to the FixSA podcast on Moneyweb.

Listen to previous FixSA podcasts here.