The quest for the perfect BEE executive

The ideal black ICT executive is a rare breed. So it`s a tough and costly battle for companies to attract and keep them.
Read time 9min 40sec

With 2005 a landmark year for empowerment in the ICT sector, companies are scrambling to get the black economic empowerment (BEE) balance right at top level.

"We don`t advertise. The people who answer advertisements are generally unhappy... We want successful, happy people."

Neil McCafferty, executive search consultant

However, SA`s apartheid legacy means there is still a limit to the number of suitably qualified, experienced black executives who are available. The fact that small and medium enterprises are getting increasing support also means that many black ICT executives are choosing to open their own businesses.

Lesley Mawhinney, head of the ICT Practice at Leaders Unlimited, notes that IT companies are "looking to their empowerment profiles as the ICT charter becomes a reality. As such, there is a demand for executives of colour."

The answer lies in attracting top executives from elsewhere, which is where executive search consultants come in. A small field of shrewd and experienced firms operate in this space, as demand for talent burgeons.

Verena Schneider, marketing manager at DAV Professional Placement Group, says headhunting is "a sourcing method of growing importance".

These consultants are quick to emphasise they are not recruitment firms. They don`t advertise or accept CVs from desperate jobseekers.

Bryan Hattingh, CEO of Cycan, notes: "Executive search is a business and management consulting service and not a human resource sentry point. Picking up a telephone and making a direct call to someone with a view to proposing or presenting a job opportunity does not in any way, shape or form constitute executive search."

These consultants say the long-term future for their industry looks rosy, but the pressure to meet immediate demand is huge.

No more hopping

"The last time someone asked for a white person was around four years ago. I`d be dumbstruck if someone asked that now."

Mark Ward, MD, Mark Cammeron Ward

Premium South African black executives are harder to poach these days than they were a few years ago.

So say Neil McCafferty, consultant at empowered executive search and consulting specialist Ubuntu Human Resources, and Mark Ward, MD of "boutique" executive search firm and management consultancy Mark Cammeron Ward.

Not only do they now see job-hopping as being counter-productive, they are also happily tied to their current jobs through factors like equity ownership or long-term contracts.

This means that even though there may be hundreds of suitable black executives in SA, only a fairly small proportion are available to move.

In addition, SA`s ICT sector is growing so fast that executives such as Implitech Business Services (IBS) CEO Jayne Phiri point out that demand will continue to outstrip supply for years to come.

Org Geldenhuys, director of Abacus Recruitment, says: "We have seen candidates being offered sign-on bonuses of 10% of their annual package. Some of these packages are in excess of R1 million - so these sign-on bonuses alone can be quite handsome."

"Companies have to gamble that a huge salary will deliver far more in terms of the business brought in by the candidate," says McCafferty.

The search firm that secures the services of the right executive can earn a fee of around a quarter of the candidate`s annual total cost to company. This fee, McCafferty notes, can cover months of research and discreet negotiations.

The executive search firm supplies the candidate with what amounts to a "one-year guarantee". This covers a free search and placement of another suitable candidate if the first one leaves the client company during the first year.

There could be other guarantees, too - such as the search company promising not to poach the candidate it has just placed, or undertaking not to poach the candidate`s immediate superiors or close colleagues.

Tracking them down

<B>So much more</B>

Thomas Makore, Spescom Telecommunications CEO, says ICT skills are important in top management, but a good ICT executive needs a lot more:

* The ability to network with local and international players
* Management and leadership experience
* Strategic skills
* Entrepreneurial experience
* Negotiation skills

Both Geldenhuys and Hattingh say good executives don`t send out CVs, but they frequently network, as do client companies and headhunters.

"And headhunting is basically a logical progression, like the 'old boys` network`," says McCafferty.

Ubuntu says it starts with a thorough brief from the client, after which the company searches its database of up to 44 000 professionals for suitable candidates and compiles backgrounds on shortlisted candidates. Only after the client has given the go-ahead will a few candidates be approached with an offer.

"We don`t advertise," says McCafferty. "The people who answer advertisements are generally unhappy in their jobs. We want happy, successful executives. We approach them."

However, finding them is easier than poaching them. Ward says a top executive could be worth a total package of around R2.5 million to R3 million a year, including shares or some form of equity ownership.

"Most top black executives won`t consider moving unless they get a significantly better offer." He concedes that an increase of about 25% would probably be considered.

Often, it is not the money but the challenge of the new post that convinces the candidate to change jobs.

Dudu Nyamane, IBM South Africa`s HR executive, is prepared to look for the ideal candidates herself, and believes even top executives need to be trained in-house.

IBM SA has long had a reputation for growing some of the best IT executives in SA. Unfortunately, this means a lot of IBM`s top black managers are poached or move on to open their own companies.

"It doesn`t get better than owning your own business. It`s a sense of having control over one`s destiny."

Jayne Phiri, CEO, Implitech Business Services

Nyamane says IBM SA initiated an accelerated development plan. However, there are still times when the company has to recruit top people from elsewhere. When this happens, Nyamane works with an executive search firm.

The 25% black-owned MTN Group also tends to groom its own employees for executive roles, having developed a succession strategy.

Yvonne Muthien, group executive of corporate affairs, MTN Group, says that where top executives need to be recruited, MTN uses reputable executive search companies that can match the candidates to MTN`s requirements.

The group has also entered into agreements with global partners to source top talent.

Dear Santa...

<B>Recruiting a top exec: A case study</B>

Allen Shardelow, partner at Heidrick & Struggles, headhunted Khaya Dlukulu to head a new regional office of UK-based ICO Communications back in 1997. Shardelow recalls that Dlukulu "was special because of his good experience - he had a sales and marketing background in IT, he also understood business processes and business development, understood the regulatory frameworks, and he had done all the grooming to build a technology company".

Dlukulu says Shardelow`s offer intrigued him because of the challenge that would be involved in establishing a new office for an international firm.

"Also, I want to know whether the challenge will make a difference. We all want to leave a legacy. For people like me, it`s the kind of thing that is important. When you pull yourself up by your bootstraps, you don`t just represent yourself, you represent a race," he says.

Shardelow says there is a constant demand for top black executives, but finding the right one for each job requires skill. "An executive search consultant needs to match the candidate`s competence and experience with the elusive 'fit` within a company," he says.

Tsepa Ramoriting, MD of IT solutions provider Bula, points out that the days of tokenism are gone.

So, when it comes to the perfect top black executive, what exactly do companies have on their wish lists?

Schneider says: "We now look to headhunt people who break down old structures and find new ways of doing the work. They must be able to achieve results, create and manage change and lead workforces. They must also be capable of developing people."

The general consensus is that it takes at least 10 years to acquire the necessary business skills and maturity, so 35 is a reasonable entry age for top management.

IBS`s Phiri elaborates: "There are no short cuts, you have to 'pay your school fees` - you have to bump your head a few times in order to learn."

Geldenhuys says: "It is all about track record and delivery."

Headhunters report that the market differentiates between so-called 'black`, 'coloured` and 'Indian` candidates, often specifying exactly what type of candidate is required, in line with the company`s client base.

Ward says, however, there is no particular demand for white executives. "The last time someone asked for a white person was around four years ago. I`d be dumbstruck if someone asked that now."

The hot seats

Overall, SA`s top black ICT executives seem unlikely to job hop.

Take for example Phiri, who has been involved in the local IT industry for the past 12 years, moving up the corporate ladder from her initial sales position at MGX to head up IBS.

She was headhunted in her early years, but now that she heads a company and has ownership in it, Phiri says her priorities have changed. Money is no longer the most important factor. "Other factors start to take precedence - like job satisfaction and how relevant your work is, how you can assist younger individuals.

"It doesn`t get better than owning your own business. It`s a sense of having control over one`s destiny."

Similarly, new Spescom Telecommunications CEO Thomas Makore has been operating in the ICT sector for just over a year, but he is also an electrical engineer with about 10 years` management experience.

He too has been headhunted, but doesn`t see himself moving soon. Pressed to name one irresistible offer that might persuade him to think of moving, Makore says ownership of a company would probably sway him.

Hinting that the onus could be on the ambitious to develop into suitable executive material, Makore notes: "There is no training school for CEOs - you have to learn on the fly."

"When you pull yourself up by your bootstraps, you don`t just represent yourself, you represent a race."

Khaya Dlukulu, managing partner, PLK Capital
Charles Ngidi, Business Connexion industry executive, public sector cluster, says: "Headhunters will always contact a person in my position. However, it is important to make a meaningful contribution in the current role before looking for opportunities inside or outside the organisation."

Filling the upper echelons of the South African ICT industry with suitable black executives is going to take more than headhunting, though, concludes Khaya Dlukulu, managing partner at PLK Capital.

He says employment equity programmes are destined for failure as long as South African corporates neglect the "soft issues" like corporate culture, support and interaction within a company.

"If an organisation hires young, black people purely because of the Equity Act, they won`t give them the support and mentoring they need to thrive."

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