The Importance of Succession Planning

Suboptimal performance by the Johannesburg stock exchange listed retail conglomerate, Pick n Pay, has resulted in the boss man, Pieter Boone, getting the chop.

Before being recruited into the position, The Netherlands-born Boone was chief operating officer of the German retailer Metro AG.

Things just did not work, so his contract was abruptly terminated before he even completed three years’ service as Pick n Pay’s head.

As the firm’s chairman, Gareth Ackerman, pointed out in the leadership change announcement, to his credit, Boone was at the helm during challenging times.

These included placing the firm back on solid ground in the aftermath of the coronavirus lockdown and retaining equilibrium amid civil unrest in South Africa in 2021.

The real reason for his axing is an underperforming business.

Could it be that retailing in Europe and adapting to working in the same sector in southern Africa vastly differs?

Boone succeeded another foreigner, Englishman Richard Basher, who retired after eight years at the helm.

One wonders why the firm did not recruit its leadership internally, but selected to parachute in foreigners?

Surely a business of such magnitude must have a staff development and leadership grooming programme in place underscored by a succession planning strategy?

Seasoned Namibian retired retailer Gilbert Botha always reminds that “Retail is detail” and that the sector here has certain nuances.

Methinks he knows what he is talking about.

Botha recently retired after decades in the retail sector, where he held senior managerial positions with the Namibian operation of Pick n Pay.

In Botha’s view, the best bosses in the retail sector are those who work their way up from the bottom, starting as shelf packers and floor runners.

Then over the years, progressively learning all aspects of retailing, including customer care and dealing with suppliers, as the individual climbs the corporate ladder.

Evidently, they are people who know the retail trade inside out and can walk the talk, not just talk the talk.

Sean Summers, who replaces Boone, was a long serving employee of the firm before resigning to pursue other interests.

He is brought back to help regain lost market share and place the retail giant, with a presence in several southern African countries, back on a growth trajectory.

Aged 70, Summers started with Pick n Pay in 1974 working his way up the career ladder to become the firm’s managing director in 1997 and group chief executive in 1999.

Although not underestimating the enormity of the task of placing the firm back on a growth path, Summers says retailing is his passion, Pick n Pay is in his blood and that he has the energy, passion and knowledge to do so.

Quoted in numerous reports, Summers says he has set himself a two-year target to get the iconic firm back to where it deserves to be.

For shareholders and the board of directors, there is another lesson and that is to learn from what others do, and what works in foreign lands but to be cautious when it comes to placing foreigners at the helm of a business here, as their success in Europe, north America or elsewhere, might not work equally well in southern Africa.

• Danny Meyer is reachable at danny@smecompete.com