The rate of Knotts

Success means doing the impossible and keeping it simple, says Vodacom founder.

July 27, 2007
The rate of Knotts

“A company strategy isn’t any use if it has to be written on a piece of paper.” It’s a remark typical of Vodacom founder and CEO Alan Knott-Craig. At first he sounds like any executive who has done the requisite MBA (which he added to his degree in electronic engineering), and then you realise that what he has said is the opposite of the orthodox view.

“A strategy is a simple thing,” he says. “When we started Vodacom we had no formal strategy process. We were happy about our technical knowledge, but we were warned about weaknesses in distribution and marketing.” So Knott Craig engaged partners such as Teljoy entrepreneur Theo Rutstein, Johann Rupert of Richemont and retailing legend Raymond Ackerman. They didn’t know the infant cellphone industry, but they could visualise its potential.

“If you can’t remember a strategy,” says Knott-Craig, “it’s no use to anybody on a piece of paper. Strategy is the result of thought. The point is it must be a real, living thing. People get smothered in bosberaads, think-tanks and meetings. You need to stay away from the Powerpoint presentations.”

The same principles inform Knott Craig’s approach to managing a company. “Avoid meetings, committees and decisions by consensus. If I have to describe my management style, I’d say I’m an autocrat who listens. Autocrats can make decisions quickly.”

Autocracy doesn’t mean unpleasantness. The staff at Vodaworld reception phone his secretary to say there’s “a visitor for Alan”, and it’s also obvious that executives feel empowered and motivated.

Does Vodacom have a sophisticated human resources strategy to implement the usual mantra of “attracting and retaining” the best people?

Knott-Craig stares out of the window. “We like to pretend we don’t hire on instinct, but we do. ‘Fit’ is very important here, and we all have to share the vision and values.

“I spend a lot of time stopping negativity. However exhaustive your hiring process, you can’t be sure you’ve got the right guy — it’s always a 50-50 blind choice. My most successful appointments have been people I’ve known for many years. When it doesn’t work out, you need to shake hands and part.”

For guidance on the vision and values, there’s the one-page “Vodacom Way”. It talks about winning, respect, caring and doing the impossible. Knott-Craig sat down and wrote it himself six years ago.

“I don’t pay too much attention to policy and procedures. That can kill a company.” But isn’t that easy for him to say as CE of the company? “If I were 28, I wouldn’t pay attention to them either. If you don’t follow policy and procedures, but you do follow the Vodacom Way, you’ll be fine. The other way round, you won’t.”

One of Knott-Craig’s most treasured maxims was learnt during his 20 years at Telkom, from former CEO and mentor Jack Clarke: “Don’t be scared to hire someone you have to pay more than you pay yourself.” To which Knott-Craig adds a corollary: “Always employ someone who knows more than you do.”

Having built the company from scratch, he’s been in the job for 13 years. How does he keep fresh?

He gazes out at the frost-scorched veld beyond Vodaworld, and produces four parts to his answer.

“A highly competitive environment certainly helps, along with the benefit of the Vodafone shareholding, which has helped me to see the global telecoms perspective.

“Then there’s the pressing need to grow the business, grow value for shareholders. You have to keep thinking of new things to do.

“And I get stimulated by young people. I spend a lot of time with students, mentoring them but also learning from them. I’m always surprised at how young and innovative they are, and at how many are black. I get less stimulation from my peers. After our discussions the students often come back to me with ideas. Some of them are helluva good ideas, and we do something about them.

“And the technology changes so fast. Remember that the Google guys were nowhere eight years ago.”

Apart from mentoring young people and learning from them, what does Knott-Craig do all day? “Hang about — and deal with crises. And I try to make sure the company knows where it’s going.”

What emerges is an image of a nonexecutive CEO — would that be an accurate summary? “Only become an executive when all else fails,” he says.

He does not suffer fools easily. This can be a problem if you’re managing people, says former Vodacom chair Wendy Luhabe, because it makes them reluctant to challenge. “But Alan does listen if you motivate properly,” she says, “and he’s very consistent and transparent. People get to know what he tolerates — and they ignore that at their peril.”

On the day of the interview with the FM, a group of Vodacom workers were demonstrating over wages outside the main gate. Knott-Craig was puzzled and irritated. “Striking is odd. We try to make sure our employees have the best jobs in the world. To be productive, they have to be happy. We know that. You don’t come to Vodacom for a job. It’s a place to be happy and constructive.

“But if those strikers have to jump up and down, let them. It doesn’t matter so much. Now, when you have a very ill employee — that’s something serious.”

What big mistakes has he made? Again, the stare at the veld. “We haven’t made any big mistakes. Lots of little ones — but the point is if you get out of little mistakes, they don’t become big ones. I can’t think of anything I would have done differently.”

The word is that Knott-Craig will step down as CEO before 2009, with an ambition first to resolve the issue of Telkom’s shareholding in Vodacom. He has needed several heart operations — an experience that “changes the way you think”, he muses.

“You think you’re bullet proof, but you’re not. Increasingly, you try to be sure you don’t let situations get you down. I find I listen a little more than I used to — maybe one or two seconds longer.”

He is unusually soft-spoken in conversation. Does he ever shout? “Not as much as I used to. What’s more important is: do my people feel they can shout at me? If they do, I can tell they care.”

“I spend a lot of time with students, mentoring them but also learning from them. I get less stimulation from my peers”

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