As South Africa’s economy and business landscape becomes more challenging and competitive, local businesses constantly have to evaluate how to facilitate growth whilst at the same time sustaining the existing business.
When undergoing an expansion drive by way of geographies, acquisitions or organic growth, a management team needs to pay attention to integration and getting the most out of the acquired business to ensure a good return-on-investment for shareholders. A good example of this locally is Tsebo Outsourcing Group (Tsebo) that recently merged with Allterrain Services Incorporated (ATS); a facilities solution business in 13 countries across the continent. The merger has transformed Tsebo from being a South African business to a pan-African group set for accelerated growth.
This move resulted in a need to transition the business from a culture to a systems-based organisation and considering that the staff compliment is currently 26 000, this is no small feat. The business has grown and diversified from three services in one market and 150 people in 1971 to over 10 core service offerings in 22 markets today.
It is well-known that there are effectively two factors that determine the way in which you manage a business. Firstly, one needs to understand the diversity of the business itself by way of its number of products, brands, markets, regions and business drivers. The second factor is the level of diversity within the management team itself including the backgrounds, experience and tenures of executives within the company, and how that diversity impacts the operating model of the business.
Organisations with low diversity levels from a business or management perspective are ordinarily managed on a culture-based paradigm or operating model where diverse businesses require an emphasis on a systems-based approach. This is one of the most challenging situations facing local businesses as they head north across the border or simply acquire new entities locally. Global trends and thinking appears focused on the benefits of a performance or values-based culture first and foremost.
The benefits are threefold and enable a business to:
• Improves the ability to provide strategic guidance to the business, driving performance and promoting synergies
• Protects the company from threats by standardising the approach to governance and compliance
• Improves operating and service quality and efficiency
Tsebo was characterised by an organisational culture determined by the behaviour of employees and the meaning that they attached to those behaviours. Tsebo’s vision, values, norms, systems, symbols, language, assumptions, beliefs, and habits were all integral to the culture and were adopted by new employees when they joined the Group.
One of the key challenges faced was the ever present balancing act of introducing a unanimous management system based on a variety of policies from HR to finance without compromising a performance-based culture that worked on many levels, was evident in employee satisfaction and a healthy bottom line. Other challenges include obtaining consensus across the whole organisation in terms of policy approach, the sourcing of information, managing the process internally and the time consuming task of centralising the information.
In order to circumvent these challenges, Tsebo adopted an integration model that comprised a phased approach that coincided with specific streams including finance, IT, HR, Marketing, Sales, Procurement and Operations. This model facilities a relatively stream-lined capability of “plugging in” additional acquisitions or other forms of growth in the future.
Finance including governance and financial reporting and accounting
HR including recruitment, training and development and performance management
Information Technology including governance, security and data privacy
Supply Chain and Procurement including pricing and local procurement
Sales including proposal and tender preparation and document administration procedures
Marketing including branding as well as communication policies and procedures
Operations including compliance and environmental protection
For those businesses currently embarking on a similar journey, some key tips follow:
1. Make sure people involved are aligned in terms of the strategic objective and importance of the task
2. Get buy-in from the top
3. Gain commitment to the needed resources and expertise
4. Communicate, communicate, communicate
By Wynand Louw, Chief Information Officer, Tsebo Outsourcing Group