A conversation with Dr Lulu Gwagwa – Chief Executive Officer Lereko Proprietary Limited

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LM:

Sis Lulu, Thank you so much for sharing your insights and experiences on your life journey.

LG:

It’s an honour and privilege to talk to you Mninawa.

LM:

Where were you born and what do you remember about your early childhood?

LG:

I was born in a small rural village called Kromhoek in Umzimkulu, KZN. Back then we part of the Transkei homeland. What I remember fondly is the big extended family I was born into. We were about 25 children of different ages. I considered all of them as my siblings. We all had chores that were age and gender specific. But this was the way of life in the village, fetching water from the spring, washing clothes in the river, working in the fields, fetching wood. All the manicures in the world have not managed to remove the scars in my hands! But I had a very happy childhood. After those chores it was games all the way. We played and played and played, all outdoors. Remember that there was no TV, PlayStation, iPads or any of these gadgets. You created your own games, your own ball, your own skipping rope. You had no choice but to be creative and active.

LM:

Who were your key influences as you grew up?

LG:

I was greatly influenced by my paternal grandmother. She single-handedly changes the course of our family. I am where I am today because of the courageous choices she made. When my grandfather died, she was left with six young children. She left the village for Durban in search of employment. Although she was not educated, she was single-minded about educating her children. She worked as domestic worker and did washing for prison warders. She was a strong woman whose word in the family was final, very much like a benevolent dictator. From her I learnt the power of vision and exposure. I spent many school holidays in her “servants quarters” in 19 Laurel Road, Umbilo in Durban. Anyone who was sick in my family got treatment at King Edward hospital because you simply stayed with Gogo and walked to the hospital. She kept the whole family’s hospital cards! But she was also a source of enlightment for the whole village. Scores of villagers came to consult with her when she was home for holiday in June and December. She was a generous, firm, courageous, hardworking visionary woman.

LM:

How did the liberation struggle affect you and what was the extent of your involvement?

LG:

I was not that politically conscious until I got to university. My first year at Fort Hare (1976) was a wake-up call. There was simply no choice. There was no way you were going to miss the meetings at The Great Hall. And when the police came with their dogs and batons, they simply charged on everyone. Looking back, I am actually grateful to have been at Fort Hare at that time. I “grew up” quickly. By the time I got to the University of Natal in 1979 I understood what was going on. Remember that we still had to apply to study at a “white” university. It also meant staying at Alan Taylor Residence (Res) in Austerville because we could not stay on campus. Res was a melting pot for student politics.

LM:

You spent some time in detention and your fiancé had to flee to exile. Describe these times and what they did for your relationship.

LG:

Girlfriends at the time played a critical role as “runners” and as “cover” for all kinds of things. I accompanied my boyfriend to Maseru and Gaborone a number of times, presumably on holiday. I got to realise much later that in fact these were “loaded holidays”. So, when he got arrested and subsequently left the country, I was supposed to know what he had been up to. So, I got arrested and spent detention without trial in Butterworth and Nqamakwe police stations. Those Transkei chaps were notoriously vicious, that’s all I can tell you. For example, both my husband and I ended up missing our wedding day, but the wedding continued anyway. But that’s a story for another day!

LM:

One of the most significant time in your life was your time at the London School of Economics. How did this time prepare you for your career ahead?

LG:

When they say “akhonto embi kwaphela”, it’s my LSE journey. I ended up at LSE because I was running away from police harassment. The late Justice Pius Langa  quickly organised me a scholarship so that I could leave the country legally. That experience at LSE changed the course of my career. All of a sudden, I was just another student amongst others from all over the world. I was not just an African woman from whom women very little was expected. Here I was seen for who I am and what I can deliver. That boosted my confidence immensely. I simply thrived. Also, the head of our programme Caroline Moser saw something in me and pushed me to do more. As a result, I ended up with a distinction and a Titmus Award as the best student – the first time it was won by a student from the developing world. But also, I cannot emphasise enough the value I got from the exposure of being in London, and LSE. That is why I believe so much in the power of exposure. I came back knowing that I am capable of doing anything that I put my mind into.

LM:

What lessons can we learn from your transformation of the IDT for other development agencies?

LG:

Transformation needs clarity, commitment and courage. Much as you need to take everybody with you, as some point as a CEO you need to take the tough decisions. The first thing I had to do was to move the head office from Cape Town to Pretoria. I knew it was the right decision, but that it would unsettle a lot of people. So, I decided to act within my first month before I get caught up in internal politics. I lost more than 80% of the head office staff, but I stood by the decision. The second goal was to transform the IDT from a grant making to a development management entity. That again meant a new delivery model and new organizational capability (skills and processes). I engage extensively with internal and external stakeholders on this, but again, moved swiftly whilst managing the change process delicately. So, for me it is about the courage to move quickly once you are convinced of the rightness of the what needs to be done.

LM:

How did you end up in town planning?

LG:

I grew up wanting to be a medical doctor. But in Form 4 (grade 11) we did not have maths teacher, so at my father’s insistence I moved to the geography stream. During final year at Fort Hare, I could see myself ending up as a geography teacher. That’s stressed me to no end. As fate would have it, the University of Natal came recruiting for town planning. I ended up being the one chosen for the opportunity, and the rest is history. And by the way, I didn’t even know what town planning is at the time, but the universe knew better.

LM:

You are the CEO of Lereko Proprietary Limited, tell us about this company and its focus.

LG:

Lereko is a black owned investment house. When we started in 2004 we were clear that we wanted to focus on sectors that impact the economy. You will see that we are in logistics, forestry, student accommodation. Also, in all our investments we seek to involve broad based entities. This has really worked for us. Another important decision we took right from the start was that as principals we will continue to play a role in the public sector, and we have stuck to that.

LM:

What does it take to sit on the Boards of companies such as FirstRand, Massmart Sun International and the Ethics Institute of South Africa? (I’m not on Ethics Institute anymore)

LG:

I have had to appreciate that the transformation agenda has to be approached from all fronts. I should have known this because this is how we approached the struggle. So being on a board means providing strategic direction of a company. For some of us, it also means driving a stakeholder rather than a strictly shareholder one. It sounds easy, but it’s not.

LM:

You are also the Chairperson of the Board of Directors of Aurecon South Africa. Aurecon has great presence across the African continent. How do you see the business prospects in Africa?

LG:

Being a development practitioner gives me multiple lenses through which to look at business prospects in Africa. Aurecon is in the business of infrastructure development across the continent. Although Africa is emerging as an important investment destination driven in part by its natural resources, our underdeveloped infrastructure remains a binding constraint. Missing regional links have made it very difficult to transform the historical economic geography of the continent, and as such it is difficult to create meaningful regional economic markets. So, investment in infrastructure is in itself infrastructure is a huge opportunity, but it also opens up further opportunities that are currently constrained by inefficient logistics within the continent.  Infrastructure is to the economy what the network of veins is to the body.

LM:

We have just finished an Investment Summit for South Africa; how would you rate this summit and what do you expect to come from it?

LG:

It was an important milestone in our attempt to improve investor confidence in our country, which we desperately need. It was also about changing the very negative narrative that has been permeating this country. So more than the billions that were raised, for me its success was more on the important intangibles that we don’t spend as much attention on. Also, the summit reinforced the point that corporate South Africa has to lead the charge in driving economic growth. All government can do is to create a conducive environment, which President Ramaphosa is focusing on.

LM:

At the same time, rating agencies have had a negative view on our economic prospects for growth and have expressed concerns on the ballooning debt. What steps do you think South Africa should take to regain the confidence of the rating agencies?

LG:

It’s all about policy clarity, consistency and stability. It’s about tough decisions and decisive actions to improve governance, especially in our state-owned entities. I also think more should be done in driving a multi-stakeholder South Africa Inc positioning agenda out there. It can’t be just left to government. In particular business and labour have to come to the party in a meaningful way. It can’t be that they come in and out this compact at the slightest provocation. This optionality is harmful to how SA Inc. is viewed out there.

LM:

As someone who is passionate about development, how do you feel about our growing income inequality in South Africa?

LG:

It’s a ticking time bomb, particularly as it relates to youth. We are not succeeding in breaking the poverty cycle. At the center of it is an education system that is not responding adequately to skills needs of the economy. We have to purposefully fix this. If I think about myself, it is education that took out my rural village.

LM:

In the past we saw a strong focus on the need to develop the capacity of a developmental state, what do you think of the concept, and has our state and institutions become weaker to deliver a development mandate?

LG:

A developmental state is one that actively creates an enabling environment for socio-economic development. At the core of it is the ability to articulate a clear vision for the country, mobilise and align everyone in its delivery. In that scheme public entities are critical in catalyzing and facilitating active participation of other stakeholders. That is how I viewed the role of IDT. But the state can’t play that role if it lacks capacity and capability. That’s the challenge we face right now – lack of vision, capacity and capability in state institutions. Countries like Singapore succeeded because they deployed their best men and women in state institutions.

LM:

We have seen little progress in employment equity across companies and industries in the senior management and executive roles. What in your mind is the problem, after 24 years, what other steps should be taken to accelerate transformation?

LG:

It’s the lack of commitment from corporate South Africa. Quite frankly no amount of legislation is going to solve this. We just need corporate leaders that are patriotic enough to know that employment equity is both an issue of justice, and about using ALL the resources of this country to drive socio-economic development. We all know that it is diverse teams that perform best. It is exhausting to be a scratch record on a matter that everyone knows has to be done.

LM:

You are a member of a number of Board of Directors, what in your mind is the key role of the Board, and how should the Board relate to the executive or management?

LG:

It is to provide strategic direction and governance cover for the business. I am not a big one for supervisory boards. I believe in a co-creation board where the board partners with management to deliver value for stakeholders. But that approach requires maturity on both sides.

LM:

We have seen huge corporate governance failures in many State-Owned Enterprises, what lessons can we learn from these failures?

LG:

It’s two issues really. Appoint competent directors whose livelihood does not depend on being directors, otherwise their independence is compromised before they even start, and they are vulnerable to whims of the shareholder. Secondly, integrity is everything. You can tick all the corporate governance boxes but if ethical culture is lacking, that organisation has no chance. But also, as a country we have not shown zero tolerance for unethical behavior. We allow leaders to get away with a lot, and we are now reaping the consequences of that.

LM:

In your view, what should be the role between executives, the Board of Directors and the shareholders (government ministers) in State Owned Enterprises?

LG:

The role of the shareholder is to set policy and then appoint directors that can provide strategic direction on how to execute on that policy. But it is important for the shareholder to provide the mandate, and then back off. That’s why they need to appoint a competent board. I also think this idea of boards appointing executives, in consultation with the Minister is problematic. The most important task of any board is to appoint the CEO. If the minister takes away the boards full control of that, what’s left? It creates confused loyalties (and sometimes conveniently so) for the CEO. The word “executive” comes from “execution”. So, management executes the strategy set by the board. The confusion in SOEs is a combination of some people not understanding their roles, and others deliberately causing confusion so that they can loot. All I can tell you is that being a director or executive in an SOE is not for the faint-hearted, especially if you are determined to do the right thing.

LM:

The area of procurement or supply chain management seems to be the area of vulnerability for corruption- how can Companies drive transformation in supply chain management whilst maintaining the integrity of the procurement process?

LG:

I honestly don’t think there is an inherent problem here. Maintaining a clean procurement process, and driving transformation are separate goals. Linking the two is what creates vulnerabilities. When we established the emerging contractor development programme in the National Dept of Public Works in 1996, our goal was a transformation one. We articulated it unambiguously. We set clear targets, but most importantly, we set the criteria of who qualifies. Then we established a very clear procurement process. What I am trying to clarify here is that driving transformation does not mean you have to flout procurement processes. If that happens, you discredit the very noble objectives of transformation.

LM:

As a chairperson of a Board or a member of a Board and as a CEO, what role do you think you should have in instilling an ethical culture within your organization?

LG:

Leaders cast shadows. So, my role as a Board Chair and CEO is to cast a shadow of ethics. I have to walk the talk, in terms of the type of executive I appoint, and the behaviors I nurture and tolerate. This is much more effective than a hundred workshops on ethical culture. I truly believe in this.

LM:

Do you think, as South Africans, we truly appreciate the full extent of the assault on our key institutions, over the last 10 years by those who have looted precious resources?

LG:

We really don’t. When I look back at the high moral ground we occupied as we walked into the public sector in 1994, I can’t even begin to imagine what it must feel like to be a senior civil servant today. It takes time and heavy lifting to build an institution, I mean to weave together the fabric that binds and holds the institution together. It’s like growing a membrane. It’s a slow and delicate process. How do you stitch together a torn membrane?

LM:

As a long time, gender activist, what progress do you think corporates are making in women empowerment and leadership?

LG:

There is progress, but it could be faster. But remember that corporates are a microcosm of society. So, the slow progress is indicative of where we are with women empowerment as a society. As such there is no risk (reputational or otherwise) that a company faces for not having any women at senior and top management levels. So, they simply do the bare minimum as and when it’s convenient for them. If society puts on the heat, corporate will respond accordingly.

LM:

What obstacles do women still face in today’s workplace?

LG:

There are plenty. The key one for me is an environment that is not conducive for women to thrive. It is not just about how many women you have in your company. It is about how many women thrive in your company, and therefore stay. For example, a woman is a team member in a project and half way through she has to go on a four months maternity leave. When the manager calculates bonuses, HE prorates the numbers. So, the woman, who had worked very hard and is seriously competent, now loses four months in her bonus. What is that about? What is it saying about how we value women and their role in society?

LM:

What sacrifices did you have to make as a wife and a mother in your career?

LG:

Well I simply had to accept that guilt is an emotion I have to live with. One time I was meant to lead an IDT delegation to the portfolio committee. The night before, my son got admitted in hospital for pneumonia. I spent the whole night with him in hospital struggling with whether to board that 06h00 to Cape Town or stay with my son in hospital. For someone who is not a woman in a leadership position, the answer is very clear: stay with your sick child. But actually, it’s not clear cut when you occupy a position that is not meant to women. You get judged every step of the way. Everybody is waiting for you to fail. It’s tough. So, for me the real sacrifices were emotional ones that I had to grapple with on my own almost every day.

LM:

You have shown particular interest in the development of young women. Tell us more about the programs you have spearheaded around the development of young women.

LG:

Out of my own experience as a young woman, I know how it feels to be faced with those FIRST big decisions: first job; first serious relationship; leaving home for the first time – all in an environment that is not exactly friendly to women. So, the Girls Lunch with Dr Lulu started with my daughter and nieces, then came their friends, and then friends of friends. I now have over forty young women that I host 5 times a year. The initiative is now attracting young women outside SA. The Girls Lunch solves my challenge of not being able to individually mentor all the young people that come knocking at my door. So, I get so much joy out of it. I am also indebted to the many friends and colleagues why generously give of their time as special guests in the Girls Lunch.

LM:

How can we also focus on young men, to ensure that they grow up responsible and more caring, loving and respectful of women?

LG:

This is a serious matter Lincoln. Young women are concerned about their chances of finding “good man” that are, as you put it, “responsible and more caring, loving and respectful of women”. If you look at it, there are a number of women empowerment programmes out there. But how many for men? It’s a problem. Young men don’t know how to deal with empowered women. Please guys, for the sake of both men and women, take up this challenge. Pay attention to our young men.

LM:

You have been heavily involved in philanthropy and community development, why are you so passionate about this aspect of your life?

LG:

I grew up in a rural village. I know what if feels like to not have access to basic things in life. Secondly, I am a development practitioner. So, development is in my blood. Thirdly, I was brought up by a man who believed very strongly that the world will be a better place if we internalise and practise being each other’s keepers.

LM:

How have you managed your career whilst balanced family duties as a loving wife and a supportive mum?

LG:

“Balance” is a dangerous myth. My husband and children have simply accepted that there are things that some wives and mothers do that I am simply not able to do. But they also know that I am there for them in many other ways. There is NO balance in my life. I do what I can when I can, for my family.

LM:

What values do you hold dearly, and how have these helped you in your career?

LG:

Integrity, integrity, integrity.

LM:

What values are you trying to instill in your children?

LG:

Integrity, integrity, integrity.

LM:

Thank you so much Sis Lulu, for being a hero and role model to so many, I know your life experiences and your inspiring story will resonate with our young leaders and entrepreneurs. 

LG:

It’s my pleasure Mninawa, we must plough back to our communities by investing in our young people. 

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