Africa Dispatches: Can Mark Barnes rebuild the SAPO brand?
by Mandy de Waal (@mandyldewaal) Remember that old cliché, “the cheque’s in the mail”? It is much like the South African Post Office (SAPO), that national asset which, thanks to a series of appalling leaders, has virtually been eroded to junk status. Until recently, no one believed that the postie could deliver anything — let alone something of value.
But, unlike many of South Africa’s other parastatals, SAPO has a self-styled ‘superman’ who has vowed to save the national utility’s brand from oblivion. His name is Mark Barnes and, after decades in the halls of finance, this straight-shooter has been rolling up his sleeves and, metaphorically, slipping into his superhero onesie to fix a very, very broken brand.
“When I arrived, I found a complete lack of trust in the post office to deliver anything,” Barnes says frankly during a telephone conversation. There’s something incredibly refreshing about Barnes’ no-bullshit approach. His unwavering honesty about the extent of the problem the post office has is refreshing — as is the unbridled passion he has about fixing it.
In mid-April 2015, Barnes flew to Parliament to present a rescue plan for what he believes is a valuable national asset. “We had a strike in 2014 that lasted for four months and our revenues dropped by 30%. We never recovered because people lost faith in the post office. We had this extraordinary organisation which was mismanaged — money was blown for decades and people lost faith in it,” he says.
The nett result is that people would rather spend more, and find safer logistic solutions, than use the post office. This spawned a cornucopia of new brands that send and receive, to the detriment of SAPO’s revenue streams.
“If you wanted to have a cellphone delivered to someone, you would courier the phone and pay any price rather than go through this post office, and this is how we lost market share, lost revenue and eventually ran out of money. And, when we ran out of money, we stopped being able to pay those people that provided the post office the services it needed to keep running well,” Barnes adds.
Succession of leadership
During the last five years or so, SA’s national postal services has seen a succession of leadership come and go. Perhaps the most inglorious of these departures were by Motshoanetsi Lefoka and Chris Hlekane, both of whom reached ‘mutually agreed separations’ with SAPO related to governance breaches and corruption allegations.
The rot didn’t stop there, though. In her report issued in February 2016 — and aptly titled “Postponed Delivery” — the public protector, Thuli Madonsela, showed that fees paid to labour brokers amounted to some R2.7bn. She reported on “scope creep, overbilling, overcharging, and false billing” that resulted in “runaway expenditure”. The report also dealt with the R161m lease of SAPO’s new headquarters in Centurion, Gauteng in 2010, which the public protector said was tainted with corruption and irregularities, and was “unlawful”.
But the mess goes back as far as 2004, when then CEO, Maanda Manyatshe, was charged with fraud and tender mismanagement. Manyatshe’s successor, Khutso Mampeule (2005 to 2007), was let go after it was alleged that he received tender kickbacks.
Barnes is adamant that the long history of management using SAPO as a personal cash cow stops with him. “There will not be corruption here,” he says emphatically. “There will not be … mistrust between management and staff. There will not be wasteful and frivolous spending. The people I am working with have bought into business principles now — they want to turn this place around,” he declares.
SAPO’s big turnaround plan — penned by Barnes, his management team and key stakeholders — is to contain staff costs while simultaneously trying to “foster a performance-driven organisation”. The post office’s new CEO needs the full support of SAPO’s employees to do this, and it looks like the firebrand has achieved this.
This May, the Communication Workers Union threatened to bring SAPO to its knees with a nationwide strike. But Barnes had already been ‘walking the stores’, picking up the phones and spreading the turnaround gospel.
When the maverick first entered the state enterprise’s head office at the beginning of 2016, union bosses met Barnes with war talk. Barnes says he told union bosses that he wasn’t interested in demands and conflict because conflict would jeopardise SAPO’s ability to raise the funds it desperately needed to keep its heart pumping. Despite this, the CWU called for a strike to demand salary increases and insist that temporary workers be put on the permanent payroll. But Barnes’ rallying the troops paid off: only 2%—some 400 SAPO workers—participated in the industrial action, and postal services weren’t interrupted.
Who is Barnes to think that he can turn the sickly state enterprise around? Educated at UCT and Harvard, he cut his teeth at Price Forbes Federale from 1982 to 1984. “How do you know that someone’s got a degree from Harvard?” he quips during the interview. “They tell you, of course,” he laughs, after speaking about his tenure at the Ivy League university.
Not without controversy
After Price Forbes Federale, Barnes joined the corporate finance division of Standard Corporate Merchant Bank (SCMB) in 1984. By 1991, he was deputy MD of SCMB, a position he held for five years. In 1995 he became chairman of the SA Futures Exchange and, from 1996 to 2000, he was CEO of private equity firm, Capital Alliance/Brait SA. He currently holds several directorships and is executive chairman of Purple Group, a financial services company listed on the JSE.
His career is not without controversy. In 2002, he ‘ruffled feathers’ in his role as non-executive director of Primedia when he criticised executive performances. In 2008, Purple Capital’s stake in Global Trader was threatened when traders at the European arm of Global Trader conspired to sink the company’s international business. In 2009, he was part of a failed bid to prevent the JSE from taking control of the Bond Exchange of SA.
Charismatic and fiercely intelligent, Barnes is propelled by an enormous belief in both what is possible at SAPO, and what he thinks he can pull off.
“I am doing this on purpose. No one called me up — I went out to look for this challenge because it is one of the most-extraordinary challenges of our times,” Barnes says, before telling the story of how he approached deputy president, Cyril Ramaphosa, about turning SAPO around. “Government announced that they were going to cut 5000 jobs at the post office and close 600 contact points. I approached Cyril Ramaphosa, and said to him: ‘If what you are going to do is cut the organisation back, then you will fail this outdated organisation’.”
The most clients in SA
“Here is an organisation that has the most clients in SA, it knows everyone’s addresses, and it knows more about everybody than any other entity,” he enthuses. “It has the most-pervasive infrastructure in the entire country — more branches than other businesses. Inside it is a bank and all of its infrastructure has been bought and paid for,” he says.
So is Barnes the man who can rescue the SAPO brand? After a long conversation with him, I am convinced of only one thing. If he can’t do it, no one can.
Mandy de Waal is a writer based in KwaZulu-Natal, South Africa, as well as contributing editor to MarkLives.com through her monthly “Africa Dispatches” column. Follow her on Twitter at @mandyldewaal or email her at MandyLdeWaal [@] gmail.com.