Four days after his resignation as group CEO of the SA Post Office (Sapo) Mark Barnes is contemplative. "I would love to one day sit on my stoep and say: ‘Check that fabulous post office, man. I helped [build that],’" he says. "I would love that."
Last Thursday, Sapo announced that Barnes had tendered his resignation after 3½ years at the helm of the state-owned entity (SOE), citing differences of strategy in terms of the group’s structure generally and, in particular, the location of Postbank.
But it was not an easy decision to make. "I am sad and a bit angry about it," Barnes tells the FM. But he’s also clearly still passionate about the post office; he says he’d like to see it succeed "with or without me".
Barnes had a clear vision for the post office: as a single entity with an integrated offering that included mail delivery, logistics and financial services.
"I don’t see a post office; I see commercial, irreplaceable, government-owned infrastructure," he says. "There is a future for postal services if you see it as a fully integrated model."
This integrated model was supported by the Sapo board and the entire executive, he explains. "It is not something that we made up. It is something that we grew, that binds us. The prospect of economic success binds us."
If he so clearly wants the post office to work, why has he resigned as CEO?
"I had a fundamental disagreement with the government," Barnes says. "[If] you have a fundamental disagreement with the shareholder about the forward strategy and construct of the group, then you can’t in good conscience stay on … and that’s all it is."
The original vision was for the post office to be the controlling company for Postbank. But separating the bank from the post office — as now seems to be the plan — defeats the purpose of the integrated model.
More than two years ago, when Sapo started getting involved in the banking licence process, it was in no state to be a bank-controlling company, says Barnes.
Thuma mina [send me]. But don’t send me on a leash
— Mark Barnes
But this has changed, and the SOE is no longer in the "parlous state" it was back then. He thus sees no reason for keeping Sapo and Postbank separate.
"I fundamentally believe decoupling Postbank from the post office, which I have been fighting about for ages, will destroy both organisations," he says.
It’s all about allocation of capital, Barnes explains. For example, the profit from distributing SA Social Security Agency grants could have been put into Postbank, which could have been the growth engine. But what incentive is there to do this if the bank is owned by another shareholder?
Barnes says if Postbank used the post office infrastructure it would be able to provide loans at an acceptable cost to small, medium and micro-enterprises.
This would eliminate the need for microlenders and loan sharks.
While microlending rates are usually between 45% and 100% — a rate that is almost impossible to repay — Postbank could lend at about 12%, he says, because it would raise money at the same rate as the state.
He adds that credit for the poor is a destroyer, not an enabler, and the state has a social obligation to replace and eliminate microlending.
"What we are doing now is social rescue, not social development. We are picking up failure and paying for it, instead of disabling failure," Barnes says. "We want to enable growth."
When Barnes arrived at the post office almost four years ago, it was in financial straits.
It couldn’t pay its creditors or pay down its debt, and needed a government guarantee to survive.
He says his primary purpose in joining the organisation back then was to address financial inequality.
Looking at what has been achieved, Barnes points to the post office taking over the payment of social grants to about 17.5-million beneficiaries — a move that has saved the fiscus an enormous amount of money.
Barnes says the post office’s delivery standard has also improved, and is close to 90%, compared with the almost 50% it was at when he joined.
"We have no more debt to banks and we are not operating under a government guarantee. It is important to say that [the government] injected capital into us to repay loans and to settle [with] outstanding creditors, which was crippling the business … We never would have been able to do it without state sponsorship in the beginning — but we did not squander that money, we put it to good use.
"So now we have a financially stable and sound organism that is growing. It will feel the pains of growth and it will make mistakes on the way, and it will learn on the way. It will be clumsy, and then it will get it right," he says.
Barnes says he has every confidence in the ability of the management team, under the leadership of interim CEO Lindiwe Kwele, to build on the foundations they laid together — and perhaps even persuade stakeholders to adopt the integrated model for which they’ve been fighting.
He says he and Kwele formed a valuable partnership and have complementary skills. He believes it is the mandate of an SOE CEO, within three years, to have transferred knowledge and created an appropriately representative and competent management structure.
"If the post office still needs me … then I failed completely in my mission," he says. "I am not into creating dependency; I am into creating independence, which the state needs to embrace. They need to embrace the notion that success and independence are valuable; dependency is not."
Barnes is the third SOE CEO to step down in the past three months, following the resignations of Eskom CEO Phakamani Hadebe and SAA’s Vuyani Jarana.
He says the general problem with many SOEs is a misalignment between the process that dictates authority, and the expertise that is required to execute strategy.
"Until such time as we get over ourselves and realise that there is a partnership possibility rather than one-winner-takes-all policy, we will never get out of the starting blocks," he says.
"We need to strike the right balance between the policy, social and commercial mandates required to be served, and the clear and specific separation of expertise and authority that is required to pull these together in an effective strategy."
SOEs were at the heart of the state capture project, and were basically looted during former president Jacob Zuma’s nine years in office.
Barnes resigned after disagreements about the structure of the post office and the position of Postbank within the group
— What it means
Barnes says when he arrived at the post office, failure was a place of refuge. "All the risk matrices were blood-red," he says. "They said: ‘We’re useless, we can’t do anything.’ You used to get into trouble if you did your homework at the post office, not if you didn’t.
"I had to start persuading people, saying: ‘Listen, it is OK to succeed, it is OK, I will protect you, it’s OK not to be corrupt, we will embrace you.’ … That’s what I have achieved."
Asked whether Sapo had been able to escape the looting and corruption that beset other SOEs, Barnes says there was nothing left to steal when he arrived there — but now there is.
In March, Barnes sent a video to Sapo staff asking that they be vigilant about corruption, and promising to protect those who fought it.
"Our post office hasn’t been corrupt for years and I see no reason for us to start now," he says in the video.
"We are dealing in much bigger sums of money than we used to be, and our very success is going to start attracting the attention of some unwanted elements in society. I want to give you this assurance … we back you; we back ethical behaviour."
So what’s next for Barnes?
He says he would like to continue contributing and helping, adding that he believes he learnt more about business and people during his stint at the post office than he had in 30 years of working in the private sector.
Now he would like to stay in the public sector, and do his part.
"I would love to continue to contribute … within a properly defined ecosystem where everyone’s roles are known, where we trust each other, and where the endgame is to transform into a resilient, sustainable society."
While Barnes believes there are many opportunities in the private sector — and that it may offer solutions for issues such as inequality — he says, for him, the scales are tipped towards the public sector.
"I have energy, and I’ve got the knowledge and experience, and I love people … So I would like to help.
"Thuma mina [send me]," he says. "But don’t send me on a leash."
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