Upper Echelon Podcast: Mark Lamberti – Chairman, Massmart & Ceo, Transaction Capital
"I’ve got close to a thousand books in my library just with the title leadership in it and they’ve all been read."
ALEC HOGG: Upper Echelon is brought to you by Deloitte – for innovative thinking and thorough strategic planning turn to Deloitte. In our Upper Echelon this week, Mark Lamberti, extraordinaire, entrepreneur, chairman of Massmart, chief executive of Transaction Capital and perhaps one of the best illustrations that one has of entrepreneurship. I say that, Mark, because I’ve been doing a little bit of research into what makes a good entrepreneur and two issues I think we would all agree on, tenacity and persistence, you’ve got to find an idea and stick with it. But something that has been coming up strongly is discipline and if I think about the Mark Lamberti I’ve known for many years that is core to your being, where did it come from?
MARK LAMBERTI: I think probably from my mother. My mother was a deeply philosophical and spiritual person and when you asked her a question, as I did so many times at 10, 11, 12, 13, 14, 15 years old, you never got a quick, simple answer. You got a total answer, it was boxed, it was spelt out and I think that the clarity that she gave me in thinking about things probably is the heart of the discipline that I try and practice every day.
ALEC HOGG: I love reading on your website, something that you wrote about time management, you say there is no such thing as time management but then you took the number of hours in a year and then broke it down to how much we sleep, how much we eat, etc and came to the conclusion that it isn’t a simple matter. In fact, we have choices almost on every minute of the day.
MARK LAMBERTI: We do too and I think that the way one uses those choices is entirely a consequence of how one defines oneself because if you say I’m a father, then when it comes to time to do the things that a father has to do, you have to do them. You can’t sit your son down or your daughter down and say I’ve got half an hour, let’s have some quality time. Similarly if you say you want to be a spouse, when it comes time to do the things that a spouse has to do, you have to do them. So I think that defining oneself is at the heart of defining how one apportions one’s time because you can say what you like but your results are entirely a consequence of how you apportion your time.
ALEC HOGG: How do you do that? Define yourself?
MARK LAMBERTI: Well, I think that we all have a picture of ourselves, I think most of us find that we get sucked into one of I think three different parts of who we are, the one that we get sucked into most and easiest, of course, is our careers. We have to pursue our careers in order to make a living but sometimes that pulls us in a little harder than it should and then we find that we are testing the relationships around us more than we’d like to and then we say hang on, let me just pull back and give a little time to my family or my friends or whoever it is. But the third part of that that we often neglect is the self and my view is that a balanced life has got nothing to do with the apportionment of hours per se but it’s got to do with how one makes sure that no one of those three things, the career, the relationships or the self dominates the other two.
ALEC HOGG: But we all have weird ideas of ourselves or perhaps not weird ideas of ourselves necessarily but certainly what others think of us is often very different to what we might think of ourselves.
MARK LAMBERTI: Well, I think if you want to live a life according to somebody else’s agenda then you’ve got to suffer the consequences.
ALEC HOGG: Mark, just explore that a little bit more, where did this idea come from because clearly in business you need to plan and in South Africa maybe business is too easy but we see a lot of non-planning in businesses and yet you also don’t find too many people planning their lives as carefully, certainly not as you have.
MARK LAMBERTI: Ja, look, I would contest the point that South African business is easy, I think it’s getting to be more and more difficult. I think that again raises the issue of discipline, there was a wonderful book written called The Road Less Travelled and in the first page of that the writer says life is hard and the only way you can solve problems is with discipline.
ALEC HOGG: So you’re a Scott Peck supporter?
MARK LAMBERTI: Absolutely, I think that that philosophy is right that sufficient discipline and application gets you to where you want to go.
ALEC HOGG: When did you start reading Scott Peck?
MARK LAMBERTI: Right in the beginning, I was reading the early books; I was a voracious reader when I was very young.
ALEC HOGG: So it shaped...his views and...
MARK LAMBERTI: Yes.
ALEC HOGG: I ask that it’s interesting because talking recently to Helen Zille, she was also somebody who has read a lot of Scott Peck’s work and agrees with that life is difficult, life is complex, as he says, but the minute you understand that you start being able to deal with it.
MARK LAMBERTI: Ja, you rise above it.
ALEC HOGG: But planning?
MARK LAMBERTI: Well, I think that at a few levels that’s critical. You’re talking about entrepreneurship and there’s a view out there that entrepreneurs are fairly spontaneous and at times almost reckless and have a massive appetite for risk. My experience, having worked with some of the best entrepreneurs in this country, is that that’s not the case, whether intuitively or formally they all have a very, very clear idea of where they want to go. As one of my Harvard professors defined so well, he defined entrepreneurship as the pursuit of opportunity beyond the resources controlled. I think that entrepreneurs have all got that, they’ve got this picture of where they want to go and then they don’t always get there in a direct way but the discipline of where they are going is unwavering. Then I think when we talk about planning we have to distinguish between planning and strategy. Strategy is not long-term planning, strategy is something different and I think intuitively again great entrepreneurs know how to find a strategic position, which is a place in an industry where you can survive and thrive without having to go head on to the major competitors in a big industry for example or how to position your business so that you can compete with major competitors. That strategic view of planning, or that strategic element of planning I should say, is what I have seen in most entrepreneurs.
ALEC HOGG: How do you find it?
MARK LAMBERTI: Not sure. When you described the attributes of an entrepreneur I think you left out probably one of the most important, which was the creativity, the ability to be able to see something where others don’t. I think once you’ve seen that then you hone in on that and just drive towards it and then the other qualities that you spoke about come into play, the resilience, the tenacity and quite simply plain hard work.
ALEC HOGG: It’s interesting as well that over the years you’ve had that idea, particularly with Massmart, you saw where you wanted to take it to but was there ever a time you thought you might have been on the wrong path? Maybe let me rephrase that question, what kept you believing that the future that you saw was accurate?
MARK LAMBERTI: Early results and I think that’s always the case. I think when you start out on a journey you need – however small – you need some confirmation that you’re on the right track. I think that you tend to do things that will give you that confirmation and say hang on, that’s okay. So it’s not a leap, it really – to use the clichÃ© – it is a journey of a thousand small steps and the progress with the small steps is what gives one encouragement.
ALEC HOGG: That term that Warren Buffett uses about building the moat in tiny steps every day.
MARK LAMBERTI: Yes, I think that’s right.
ALEC HOGG: You’ve met fascinating people around the world, Mark, not only representing South Africa as the Entrepreneur of the Year but being a judge in the global competition; you’ve got relationships with people in various parts around the industry. Is there anyone that you read particularly or learn from?
MARK LAMBERTI: Hard to single out a single individual. I think over the years I’ve had the privilege of working very close to some extraordinarily impressive people. I think of Manfred Simchowitz, who was the giant behind the original W&A, an extraordinary man. I think about Nate Kirsch, I worked with him in Tradegro, Nate today is an 80 year old man, who’s mind is as sharp as a razor and is still doing great things in business in a very constructive way. So one sees people like that and one holds up aspects of their behavior as something that one would like to replicate. But then on the other hand, I had the privilege of working with Colin Hall for a number of years in Wooltru and Colin Hall I think taught me about the pursuit of learning as a the essence of leadership. That a leader comes to work every day saying I have to learn, I have to know a bit more than I knew yesterday because to stay ahead one has to read, listen, talk, converse, reflect. Leadership is not a passive thing, it’s an entirely active thing and I think that’s what Colin taught me.
ALEC HOGG: Did he also teach you something about this work/life balance? I remember listening to you recently give a talk where you say you close up the business on a Friday in your mind and that’s it for the weekend, you don’t engage at all with business. Now, in a South African context – certainly of many of the people that I’ve engaged with – that is, if not unique, very rare.
MARK LAMBERTI: Yes, I think I made that comment with specific reference to when my children were growing up. These days I do tend to do a bit of work on weekends but when the children were growing up and from the time they started school until the time they left home, I dedicated my weekends to them. I wouldn’t say that that came from Colin, it came...I happened to be travelling overseas and one of the books that really influenced me was Covey’s 7 Habits, which by now is an old book but you go back and read it again and it’s so full of absolute basic wisdom. It speaks about the issue of balance in the truest sense similar to the way I described it earlier. I think there is another thing, I have a failing in that I have to have space and time to reflect and I think best when I’ve written something. So while I can articulate things reasonably well in a discussion or in a conversation, if I’ve had time to reflect and actually put them down in writing I know that the thoughts are solid and they are strong and they’re subject to testing. So to do that one needs time and I’ve always needed my own personal quiet time to reflect and write.
ALEC HOGG: How much do you give yourself?
MARK LAMBERTI: Most mornings, I wake up at four most days, between four and five, and until I move towards the office, somewhere around about nine, I’m doing that kind of stuff. Just having a cup of coffee, writing, reflecting.
ALEC HOGG: Reading?
MARK LAMBERTI: Yes.
ALEC HOGG: So that’s part of the reflection?
MARK LAMBERTI: Most of my reading though comes on the weekends but keeping current with stuff, the newspapers and the various sites that I read and so on, ja.
ALEC HOGG: Well, apart from Scott Peck and Stephen Covey, who else do you read often or who else has shaped your life?
MARK LAMBERTI: In terms of the books there are so many. I happened to count the other day, I’ve got close to a thousand books in my library just with the title leadership in it and they’ve all been read. So I read a lot of stuff.
ALEC HOGG: Biographies?
MARK LAMBERTI: Yes, latterly I’ve found that to be instructive. In fact, halfway through Jannie’s book at the moment.
ALEC HOGG: That’s a lot of fun, Jannie Mouton. Mark, your life has also been very full, you’ve packed a lot into it, apart from what you’ve done at Massmart and your second career now with Transaction Capital, you’ve also served publicly or done your public service through something like Business Against Crime. What got you drawn in on that side? Again, it’s not something that we see many business leaders getting involved in.
MARK LAMBERTI: Well, I think one comes to the conclusion at a point in time that one is extraordinarily privileged and that the life that South Africa has given us is remarkable. Even now in the middle of a global financial crisis, our situation here for all the noise of the politics, which you might find irritating at this particular time, we still live an extraordinary life. We happen to be in the middle of winter and there’s this glorious sunshine coming through the window. When you recognise that you have to say, well, I can’t just be a taker and to the extent that [if] I can in any way assist the country, it’s almost an obligation to do so. I actually feel that so strongly that I feel we shouldn’t actually be thinking about retiring if we have competence and health because one almost has an obligation to keep contributing for as long as one can.
ALEC HOGG: Well, you’re 62 this year, you’re very healthy...
MARK LAMBERTI: Ja, thank God.
ALEC HOGG: ...you, presumably, are not going to be sitting back any time soon?
MARK LAMBERTI: No, not at all.
ALEC HOGG: Do you invest time in your health?
MARK LAMBERTI: Ja, I exercise regularly, I try and eat properly.
ALEC HOGG: So you’ll be Warren Buffett hopefully, going well into your 80s?
MARK LAMBERTI: Please God.
ALEC HOGG: At your current business?
MARK LAMBERTI: Ja.
ALEC HOGG: Or is there a third career ahead of you?
MARK LAMBERTI: Well, I’m not sure, I think there also comes a time when you would like your life to be guided by a compass rather than a clock and at that point being a fulltime executive, with the demands that fulltime executive life imposes on one, I think one wants to stand back from that a little. But I certainly believe that I’ll be interested in business and in activities for a long time.
ALEC HOGG: You mentioned compass and that, as far as the business community is concerned, is something that has been raised recently on moral compass. You’d have heard Reuel Khoza making statements in the Nedbank chairman’s report. Is that appropriate for business leaders, do you think, to talk out publicly or is it better done behind closed doors?
MARK LAMBERTI: Well, I think that the annual report of a large organisation like Nedbank is not just addressed to shareholders, I think that’s naÃ¯ve, I think you’re talking to all stakeholders and I think it’s quite important for people who are associated with the company in any way to understand how the top minds of the company are thinking. Whether one becomes as strident as Reuel did or not that’s a different question but I think that he addressed some of his comments to government. I think addressing those kinds of comments to general business today is apposite. We have extraordinarily appalling things happening, the banks internationally – thank heavens it doesn’t apply to our own banks – but the banks internationally are behaving appallingly at the moment. You have the Libor thing, yesterday morning it was HSBC playing with Mexican money and there’s just lots of evidence of bad corporate behavior. The worst thing about that is not that you have a few individuals behaving poorly but that coming on top of a recessionary period in the world you have leftist populists now holding up the flag and saying, well, you see capitalism is broken and you see how they behave. Whereas capitalism is still what’s keeping this whole thing working, it’s still what’s putting food on the table and it’s still what is paying the politicians of this world. The isolated bad behavior of individuals is just so repugnant at this time. That’s why I think our obligation as corporate leaders to be beyond reproach is just so important, we are on show 365 days a year, 24 hours a day and we have not just to behave properly but be seen to behave properly, and to try and inculcate in society a feeling that being a business leader is not an easy ride but it’s a consequence of application and hard work and that it’s a great contributor to society. The societal good that comes out of well-run corporations is extraordinary and to have a politician use a one-liner to debunk that is unfortunate, unfair and simply wrong.
ALEC HOGG: Mark Lamberti, chairman of Massmart, chief executive of Transaction Capital and one of South Africa’s great entrepreneurs. Upper Echelon was brought to you by Deloitte – for innovative thinking and thorough strategic planning turn to Deloitte.