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COVER STORY: Moses Kgosana: A modern leader for the modern age

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Moses Kgosana – humble hero who leads through inspiration

How does one manage a team of more than 260 partners, each of which thinks he or she knows better than you, and at least half of whom probably do? You start off by being humble, explains Moses Kgosana, CEO and senior partner at KPMG.

What sets Kgosana apart from all the other highly qualified, experienced and ambitious partners at KPMG is that his management style perfectly suits the age. Research has demonstrated that a team composed only of highly creative people does not make a creative environment, just as a team of like-minded people does not make an effective team. In today’s world it is recognised that the best team is a diverse and balanced one, with concepts such as employment equity probably being the least important element of today’s successfully diverse team. That is exactly what Kgosana has brought to KPMG under his tenure.

Speaking at a UNISA thought leadership seminar on diversity in leadership on 22 August, international speaker and management author Professor Frons Trompenaars pointed out that successful businesses are successful when their management team is multi-cultural and acts as a mirror for the entire global organisation.

Kgosana was elected by his peers as KPMG CEO in 2006 – its first black CEO and the first black CEO of a ‘Big Four’ auditing firm in South Africa. The pace of transformation in a diverse organisation since that date has been ‘unbelievable’, he says, a factor mirrored throughout the entire profession.

“Today KPMG in South Africa has 67 black partners (comprising a quarter of the total partner body), a quarter of the total number of partners is female (with 28 black female partners) and 44% of the entire staff is black. More than half of our yearly trainee intake is female (52% in 2013) and 48% black. This has been achieved in the face of two major obstacles; the paucity of the national academic pipeline, which Thuthuka has sought to address, and the background of the global financial crisis. I am extremely proud of what we have achieved and it bodes well for the future as the economic situation improves and transformation becomes ever easier to achieve. Transformation comes with a price tag, even if it pays off in the long run,” says Kgosana.

His personal accomplishments were achieved the hard way, even in a community where almost any successful black businessman can boast of humble origins. During the early years of his education, he alternated days of school and work with his brother in order to tend the family farm. From Std 4 or grade 6 onwards he paid entirely for his own education and text books through casual jobs, studying mostly part time to get a matric and university education through UNISA.

“This instilled a discipline of hard work and persistence which enabled me to succeed and also set many of the values which I hold dear till today.”

There was no Thuthuka in the 1970s to help struggling part-timers like Kgosana, but he points out that the volume of work back then was far less than today. Given the same socioeconomic conditions, he doesn’t believe he would have passed today’s exams: “so I have considerable sympathy for today’s youth qualifying the way I did”.

After articles he went into commerce and industry, working for various
organisations including New Africa Investments Limited (Nail) with Dr Nthato Motlana, one of the founders of the MTN Group. This is possibly the one regret in his career, he says. Despite having reached the pinnacle in the audit profession, he says that had he more patience for the values of commerce and industry, he might have persisted and become a major part of one of South Africa’s largest companies.

Instead, due to disagreements he left after just three months and returned to public practice to form KMMT, his own firm.

This became one of the largest black audit firms in South Africa, and its eventual merger with KPMG was not universally praised. At the time, one school of thought was that all black CAs(SA) should form a single black firm which could rival the Big Four, but Kgosana says he had already realised that it was the Big Four which would set the pace in transformation as it needed their far bigger resources to train black CAs(SA) in the numbers necessary to bring about genuine transformation.

Apart from hard work, Kgosana attributes his success to setting goals and having a plan of action on how to achieve them. It has worked so far, he says, though admits he has yet to set a goal for the next phase of his career: what happens once his second term of office as CEO expires in two years’ time? Will he rejoin the rank and file within KPMG, or return to commerce and industry?

Kgosana believes he has values and principles which not only stand him in good stead as a leader, but which have been inculcated into KPMG and been warmly received.

“I have a public persona – I am seen less as Moses Kgosana and more as the KPMG CEO. For this reason, I have to take particular care in my personal deportment and I did so from the moment I joined KPMG.

People have to realise that accepting a position with an organisation is about much more than accepting a salary. In my daily life I live certain values such as leading by example, being honest and open in my communication, respecting the individual and acting with integrity. These are not qualities one should have to boast about – they should be natural assumptions in any organisation – yet I have seen companies that do not. I have reinforced these at KPMG and believe these qualities talk to our reputation.

“Quality, trust and integrity are vital in this profession, and for this reason I have a personal relationship with our top 30 companies. They all know me, and know I am on call when needed,” he says.

As a leading black figure in South African business, much is expected of Kgosana as a catalyst for change. He not only accepts this – it is his passion. He lists several transformational innovations that he and his fellow Partners at KPMG have delivered over some time and which place the firm in good stead. KPMG is part of the Business Leadership South Africa forum (incorporating the top 30-40 businesses in South Africa) which took upon itself the role of stimulating necessary business inputs on the National Development Plan (NDP).

One of his first acts as CEO in 2006 was tointroduce a transformation scheme offering 20 unemployed B.Com graduates a focused development programme to prepare them for the workforce with valuable work experience (in the tax and advisory domain) and life skills. This was in direct support of former Deputy President Phumzile Mlambo-Ngcuka’s initiatives (AsgiSA and Jipsa).

A similar initiative currently gaining momentum is the Prestigious Internship programme in a joint venture with the Department of Public Works, Nedbank, Old Mutual and SAGDA, to provide meaningful work experience for unemployed graduates.

However, the initiative he is most proud of and one he hopes will be his lasting legacy at KPMG involves sustainability. “I’m leading an initiative to get companies to look at their corporate values in a way that goes beyond financial profit, but inspects their impact upon the environment, local communities and government (beyond just paying taxes). The point is to get people seeing their businesses very differently – we’re looking at new business values,” he explains.

Kgosana believes he has brought a more empowering culture to KPMG, one which does not detract from his much-lauded predecessor but is more suited to the age.

“Every leader of an organisation brings a unique set of values that at that moment in time either makes a business grow or contract. My style is more inclusive and engaging than was previously the case at KPMG, because those are the values I bring – my staff feel free to speak to me quite openly about anything. I believe that is the right style for these tougher economic times,” he explains.

“Ability to listen and absorb what others say is almost the defining characteristic of today’s leader; and this was not so pre-Enron or Lehmann Bros. This is quite different to hearing people when you’ve already made up your mind. Nowhere is this more the case than in a professional services firm where everyone has their own opinion and seldom even agree with each other. They have to be listened to – but a leader ultimately has to carry most of them with him.”

Kgosana is very aware of the power of the team around him, and has leveraged his own influence through his executive team, by blending a team that complements not just his strengths and weaknesses but those of each other.

“In this manner I ensure all team members are capable of interacting with and supporting each other. Each executive has three roles – as a leader in their own right, as my deputy within their line function, and as adviser to their colleagues – and this matrix ensures they do not function in silos but as an integrated whole,” he says.

“No leader is better than others at everything. You have to fill those gaps through the Exco team, so arguably the CEO’s single biggest role is the management team he selects. Debate and even criticism can be extremely healthy, which is why there should be balance and diversity on the team – it brings differing viewpoints and holds you accountable.”

He does not claim the days of the autocratic leader are forever over, but the style that suits today is a team-player who leads from the front. The eight-member KPMG Exco has four blacks and four whites, but only one female. Appointment is based on a set of qualities of which merit is a basic assumption, and given equal merit bringing diversity of views to the team is the deciding factor.

“We have a policy that for every white partner appointed a black manager should be appointed next. This is because we need the firm to begin approximating the demographics of the country. However, we never appoint purely upon demographics because a partner always has to enjoy the complete trust of clients.”

Kgasana is unlikely to be a popular mentor, because his own track record is one of hardship and hard work, and that’s what he aims to inculcate in his mentees. “Aspiring partners and leaders must understand their future is in their own hands – nobody, not mom, dad or teachers are to blame for failure.”

As to advice on how to succeed, he points to what worked for him: “Set a firm goal and step-by-step action plans on how to achieve it. List out where you want to be at age 30, 40, 50 or 60. You might not always succeed, but what is certain is that you definitely will not succeed without a plan, because other distractions will undoubtedly intervene.”

“Thereafter, have compassion, empathy and humility – these are strengths, not weaknesses – as well as passion. I would say to aspiring leaders, if you do not have one or other of these characteristics, develop them.”

Kgosana has managed the firm through some difficult years and admits this has required a different management style for the times. “When faced with the ‘jaws of debt’ you have to bring your team closer together because costs are increasing faster than the top line. It requires tough decisions, and to push those through requires a support engine and an infrastructure fit for turbulent times.”

From a sustainability point of view, he says that the worst mistake currently being made by listed companies is in making large-scale retrenchments and losing valuable skills for short-term gain to shareholders. The biggest threat currently facing the audit profession is the misguided drive emanating from the European Union (EU) to regulate audit firms, particularly the Green Paper looking to enforce auditor rotation.

“Because the EU has not yet emerged from its recession, it is looking at quick fixes and so has targeted auditors. The US has rejected this, arguing the more appropriate solution is not greater regulation but the empowerment of audit committees to implement stronger governance. Audit failures were not responsible for collapses of any companies – poor governance was,” adds Kgosana.

Author: Eamonn Ryan, LLB (Hons) is a Business Jounalist.

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