Sunday, 14 September 2008 02:00

The science of getting lucky

There is nothing like a bit of success to get chief executives deciding that they would like to speak to the press, after all.

Roger JardineRoger Jardine, who made history in 1994 when he became South Africa’s youngest director-general at 29, became chief executive of construction group Aveng two months ago, when its share price had tanked to R50 and things weren’t looking great. He gave his secretary firm instructions not to allow the media, or certainly this newspaper, anywhere near him.

Fast forward to Monday last week. The share price had recovered almost R20 and Jardine was basking in the glow of a strong set of results and a bursting order book.

Now, about that interview, asked his publicist.

Which for me raised an old question. How much are good results down to the chief executive and how much merely a matter of the company being in the right industry at the right time?

“Somebody once said you must never mistake luck for genius,” responds Jardine with a dry chuckle.

The question could be asked of any listed company with operating subsidiaries, he says.

“It depends on what goes on at the centre, generally elevated from the day-to-day operations.”

But if there’s a world cup round the corner, stadiums to be built and contracts lining up to be signed?

CEOs would soon be in big trouble if they just signed willy-nilly, he says.

“Things like managing risk are more carefully scrutinised than they would be if you were just chasing the next contract.

“There are a number of areas where head offices play a constructive role.”

Risk management is one of the most important.

“If that flies out of the window, all sorts of things can go wrong.

“When we are about to put in bids on major contracts we look at contract risk, execution risk, political risk.”

Execution risk?

“If you take on a big job, can you do it? Will you be able to deliver on what you promised?”

The biggest potential constraining factor for Aveng, “given the amount of work in the pipeline”, is capacity, he agrees.

“You have to make sure you have the people to do the job, and, if you don’t have them, where are you going to get them from?”

It is no secret that the construction industry is short of engineers, and Aveng is no exception.

“There is a shortage of skills,” says Jardine. “But there’s a package of measures you can put in place to make sure you attract and retain people.”

Offering new challenges to your engineers and other specialists is essential.

“When you win a big mandate, people are attracted to that. You attract people from elsewhere. That’s why it’s important for companies to win big, prestigious contracts.”

On this score, Aveng is doing well.

“Our order book is currently sitting at 123% of this year’s revenue,” he says, although the only projects he can name off the top of his head are Soccer City, the Port Elizabeth stadium and the new Heineken brewery on the East Rand.

Of course, his competitors are also getting big, prestigious contracts to entice a limited pool of bright engineers and keep them happy.

“That’s why you have to be on top of the game when it comes to winning the war for talent,” says Jardine.

Keeping the contracts coming is just one of the battles.

“We need to give people a sense of belonging, and to be proud of working for Aveng.

“We spend a lot of resources on testing the mood of our people, and investing in them through training and development (R30-million in the past year).

“In addition, you need to make sure that people are feeling properly compensated for their investment in the business,” says Jardine.

For qualified artisans, engineers, surveyors, project managers — you name it — South Africa should be their oyster right now.

But schools and universities are not producing the required skilled people.

Fifteen years into the new South Africa and Jardine’s skilled workforce is still overwhelmingly white. And that is not, as the employment equity commission would have it, because of racist recruitment policies.

Like its competitors, Aveng invests big money and resources, at schools, universities and through in-house training programmes, to identify, nurture and develop black skills. Nothing less than the sustainability of the industry depends on it, says Jardine.

But the skills are still not much in evidence.

As the former director-general of the Department of Science and Technology, Jardine knows better than most why not.

“We don’t have a culture of science and technology in society at large,” he says.

“We have to look at promoting a culture of science where, from a very young age, children can aspire to be great scientists one day.”

Where are the science museums, he asks? Where are the libraries to provide access to the kind of reading that might fire young minds?

How much money is going into our research institutions?

“There’s a whole chain of things that we need to pay attention to.”

Jardine, 43, grew up in the decidedly unintellectual environment of Riverlea township, south of Johannesburg, and became a physicist.

“The way I decided that I was going to be a physicist one day was that when I was at high school I opened the Sunday Times and there was an article about a black physicist. That was the first inkling I had of, hey, wait a minute, physics is open to me. I think role models are very important for young people in pursuing these careers.”

After matriculating at Woodmead school, in the northern suburbs of Johannesburg, Jardine went to the university of the Witwatersrand for a year and then won a scholarship to study in the US. He got his BSc and MSc in radiological physics but practised only “very briefly” at a medical centre for cancer patients before returning to South Africa in 1992 to work at ANC headquarters and become a civil servant.

A waste of scarce resources or what, I ask?

“There was debate when I came home that some in the ANC felt I was wasting my education. But I felt very strongly that I wanted to be part of rebuilding South Africa. I was very passionate about being part of those who were preparing for the democratic stage of our country.”

After leaving government, he ran Kagiso Media and Kagiso Trust Investments for eight years. When the chairman, Eric Molobi, died Jardine moved on.

“I was very close to him, he was a mentor to me. His death caused me to think about my own path in life and I thought I needed a change.”

Aveng approached him.

“I liked the idea that it was infrastructure at the interface between where you develop people and where you develop the economy as a whole.”

Engineers are a politically conservative bunch, so how was the culture shock, I ask?

Don’t talk to him about culture shock, he says. He went straight from Shell House to the former national department of education. Aveng was a cinch.

“One of the good things about engineers or people in this industry is that they’re very straight talkers,” he says. “That is something I took notice of, but I find it refreshing.”

His first celebratory lunch with one of his teams was at a pub.

“It wasn’t in a fancy restaurant somewhere. I think that’s refreshing.”

 

Kagiso Property Holdings have joined forces with the HL Hall and Sons farming dynasty of Nelspruit to launch a new R120-million commercial and retail development

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