LOOK AFTER YOUR PEOPLE FIRST
In a series of interviews, I explore the approaches of different business leaders (all chartered accountants) to strategy. This month I was in conversation with Elmar Conradie, CEO of Safair.
AUTHOR | Christiaan Vorster CA(SA), SAICA Regional Executive
Throughout my interview with Elmar Conradie, it was apparent that he has a clearly defined approach to weaving strategy and leadership together. Subsequently, I clustered our conversation into three broad areas that highlight his approach to strategy:
The importance of people and the role strategy plays in pulling the team together and reaching goals
Elmar’s overarching philosophy in relation to strategy is that strategy is about pulling the team together, making sure that the team goes after the same goals. But before we even started discussing the different talking points relating to strategy, Elmar stressed that the first step and one of the most important parts, even before you define your strategy, relates to the people who are on your team.
‘We said from the start that the most important part is building the team. In essence, that is why you have a strategy, so that you can have a team that works together towards something. A team that knows how to work together, what the rules of engagement are and what they need to get there. You can always change your why and your how later, but the who, the people on your team, is the big commitment. The people in your organisation are a long-term commitment.’
Elmar then reverted to the importance of strategy: ‘In our business, I always like to use sports analogies − we refer to our strategy as our game plan. Your people need to know the game plan, the big picture − the why, what and how is vitally important.’ He clarifies this by adding: ‘Your vision is your why, your mission is your what and the behaviours of how people need to act every day, and what you expect from your team is the how.’
On the question of regularly revisiting the overarching strategy, Elmar responds ‘The “permanent part” of our strategy, the vision, mission and values, does not change on a regular basis, but we do try to set objectives and key results that feed into our vision and mission every year. The fundamental question that we ask in setting these objectives and key results is what do we need to do this year to achieve our vision and mission.’
Elaborating on how you get buy-in from staff, Elmar said: ‘The first part is your executive committee. Because they were part of setting the vision and mission and are integral to setting the objectives and key results, there is buy-in from them. For the rest of the organisation, a lot of positive communication and repetition is needed.’ Elmar showed me their compact ‘strategy booklet’ that is given to employees and which states their ‘game plan’ and all its elements, the vision, the mission and the values, and a section which is particular to their strategy which they refer to as their principles.
‘I try to do at least a half an hour session with every new group of people that joins our company where I take them through the why, the what and the how and then we also give them the actual booklet.’
Following on from that, the conversation veered to budgeting and planning as well as performance appraisals linked to strategy. ‘I think the budgeting process is an incredibly important part of your strategy. I found that doing a budget highlights a lot of efficiencies and places you need to pay attention to in your business. Budgets and forecasts are incredibly important tools.’
He states that they prefer key performance indicators (KPIs) to focus on the business and not on the individual. ‘One of our principles is to incentivise and measure people based on the company’s overall performance. The main reason for that is buy-in: I don’t want people to measure and go after their individual KPIs, with unintended consequences, to the detriment of the overall company KPIs.’
‘We’ve got a few big overall KPIs we set for the organisation that are linked to the strategy and everybody works towards the same overall goals.’
Keep it simple
Another theme that stands out is the importance of simplifying your strategy. Says Elmar: ‘The word strategy always sounds daunting to me … Normally when you start writing your vision statement, people start using grand words and nobody can decipher what they mean. “You want to be the best at this or that” usually comes up. When we designed our vision and mission, we tried to keep it as simple as possible. We wanted something that people can immediately identify and associate with − and that process was a lot harder than we thought. We went through a number of iterations before we felt we have something that we all can resonate with.’
Safair’s vision emanated from that simplifying process. ‘To be South Africa’s favourite airline’, said Elmar. ‘We felt that it says what we do. The favourite part tells us what we are aiming to achieve and it immediately gives people a picture of what it is we are trying to achieve.’’
On the question of how broad one’s strategy should be, Elmar referred to an analogy also used by Jim Collins and Phil Knight: ‘In order for our bodies to survive we need to make blood otherwise we will die, but making blood is not the reason for our existence. In our business for instance safety is incredibly important, that is the blood in our business. We still need to make a profit, that is also the blood of our business. Things like that are high priority items in our business, but it is not necessarily part of our strategy, of our reason for existence. But you have to look after it because it is the blood that flows through the veins of the business.’
Strategy in the time of a crisis
Safair has been heavily impacted by the COVID-19 pandemic. For instance, curfews influenced their flight schedules directly, continuously disrupting operations.
‘When the COVID-19 pandemic hit, we asked ourselves: “Does our vision still work?” “Does our mission still work?” “The behaviours that we need from our people, are they still the same?” We came to the conclusion that nothing had changed and that these things were more important than ever.’
He continued that they did two things very differently to the way they normally apply their strategy: ‘Firstly, we had to go back to first principles in managing the business − we couldn’t do budgets, we couldn’t do forecasts – it was just too uncertain. We then ask the question, “What is the right thing to do? Based on our principles and our values, forget about budgets and money for a moment, what is the right thing to do?” It was almost the only way we were able to make decisions in the past year,’ he said.
‘Secondly, what we did find incredibly useful was to do a few scenarios − what was the worst-case scenario, what would happen if it transpired, what could we do to make it better or even alleviate the impact if things do go that wrong.’
Elaborating on scenario analysis, Elmar added: ‘Scenario analysis for me is the same as strategy − it sounds like it should be these incredibly difficult spreadsheets with hundreds of Monte Carlo simulations, but it does not need to be. We sat down and asked how long we thought the lockdown was going to last. What was going to happen once we get out of lockdown? Would they just lift the travel ban, or was it going to be gradual? We could pretty much forecast the steps that were going to happen − we just could not forecast the timing.’
He summed it up thus: ‘Because you cover the whole spectrum, you can handle everything in between.’
Advice for aspiring leaders
I then asked Elmar what his advice for aspiring leaders on the subject of strategy was. His response: ‘The first step is the who, your team. You can change all the other items, your vision, your mission, but looking after your team is the most important. The second item is to simplify: be careful not to over-complicate. There is a tendency with a vision and mission statement to use all the buzzwords and latest jargon, and at the end of the day nobody knows what you are talking about – use simple terms that everybody understands.