Mteto described the pivotal role of people and culture in the firm’s turnaround at HR Indaba Network.
Mteto Nyati, Altron’s turnaround champion CEO, was the keynote speaker in the first panel at the virtual launch of the HR Indaba Network. Crowds flocked to the all-new format event, and the demand for space in the opening talk on Turnaround and Transformation: How to Put People First and WIN was so great that capacity in the room had to be increased. Mteto shared the story of turning Altron from a family-owned business to an independently run one, bringing nine brands under one umbrella. He shared that, in 2017, when he joined the JSE-listed technology group Altron he found a company in conflict with itself.
The nine separate businesses operating in silos, with an embedded culture of internal rivalry and mistrust. The company had also endured several challenging financial years, including a loss of more than R1 billion in total revenue for the year ended February 2016.
Before Mteto’s tenure, 84-year-old Bill Venter stepped down as chairman of the company he had founded more than 50 years ago, and his son Robbie departed as CEO. Mteto’s appointment marked a new chapter in the firm’s history.
Mteto had the full mandate to radically reshape the business: “The goal was to make fundamental changes in how our business was conducted to cope with a new, more challenging market environment.”
When joining an organisation, Mteto is conscious of the two key mistakes CEOs can make. The first is to make sweeping changes without understanding the environment. The second is not to make any changes at all.
His first months at Altron were spent taking stock of where the business was. In developing this understanding, Mteto partnered with his human capital executive to survey employees. He wanted to them to answer the tough questions like, “Where are we failing, where are we missing opportunities and what are we good at?”
It soon became apparent that Altron had a non-inclusive culture. “You needed to know certain people to progress within the organisation. There was an ‘in-crowd’ with access to power and opportunity. Human capital, marketing and IT were not considered strategic and were not represented at exco,” says Mteto.
Creating the One Altron Strategy
Mteto wanted to create an overarching Altron strategy that built on the company’s heritage instead of destroying it. The inclusiveness of this strategy development was important.
He invited the top 80 leaders within the organisation to participate in a three-day off-site strategy session. “We had to extend the invite way beyond our exco. Our problems were pressing, and we did not have the time to sell the strategy to the leadership layers below exco. I wanted to bring many people along so that they could return with understanding and buy-in to the strategy,” said Mteto.
With good facilitation, this strategy session was successful. This leadership contingent was involved in creating the company’s purpose, vision, and values. The vision was simple: Be the leading technology solutions provider.
For Mteto, the organisational reset would rely on a strong set of values. “We wanted values that spoke to both our strengths and aspirations. More than this, we wanted to outline the behaviours that demonstrated the values,” he said. Once the values were finalised, it took a whole year for the human capital team to roll out value workshops throughout the organisation.
When Mteto joined the company, Altron had 20,000 enterprise customers. Due to the siloed nature of the business, there was little cross-selling and upselling of services. Customers saw the different Altron businesses as standalones and did not experience Mteto’s “One Altron” vision.
He made reaching and properly servicing these customers core to his strategy. “The aim was to create a simple and clear strategy. There is no space for a complex strategy that no one can understand. It is the role of leaders to create clarity,” said Mteto.
The business goals included doubling the firm’s profits in five years and delivering exceptional returns to investors. “We wanted to deliver the best returns in the ICT space. Within two years we were the best performing tech stock in South Africa. Despite Covid-19, our share is maintaining its value,” said Mteto. Altron has more than doubled its market value since Mteto took the helm as CEO.
Living the strategy
For the strategy to be successful, Mteto had to make many people changes. This included bringing many new leaders into the company. “I spent a large portion of my first year assessing the leadership capabilities. I needed to know who could take the business where I wanted it to go and whether these people were aligned to our values. I then worked on building a more inclusive leadership team,” says Mteto. This included allowing a seat at the exco table for human capital, marketing and IT.
To improve levels of customer service, Mteto converted 2,000 temps into permanent employees. This upped customer satisfaction, while reducing employee churn. Altron also invested substantially in training young graduates in a two-year partnership with GIBS. Many of these graduates, most from previously disadvantaged backgrounds, are now top contributors within the organisation.
Transparent communications are key to any change management process. Here, Mteto introduced an annual kick-off event to recognise employees’ achievements and to share the company’s priorities for the year.
This event happens early in the company’s new financial year. Altron leaders speak about the goals for their business units while exco leaders share progress on human resources, marketing, financials, and operations. The company celebrates individuals with awards linked to the values and performance. “You can’t get to the middle of the year and only then assign KPIs to teams and individuals. It is important to have these in place when the year begins,” he added.
The company also hosts monthly staff updates where employees are informed of progress made. Mteto likes to add an element of fun by bringing in actors or comedians. He believes that one of the top reasons people leave is due to a lack of communication.
He also spends time with first line management to understand whether the strategy is understood and being rolled out successfully. “I spent the best part of three months soliciting feedback from managers. It is through this feedback they become more committed to Altron. The feedback was that they’d like see us accelerate the value drive within the company,” Mteto concluded.
The audience responded enthusiastically in the chat, thanking Mteto for sharing his inspirational story so candidly, and CHRO South Africa for a powerful virtual event.