Eskom’s leadership problem

Eskom has made several significant changes to its leadership in the past 18 months, as some of its previous leaders and managers were in the wrong positions.

This is feedback from Eskom chairperson Mteto Nyati, who told CNBC Africa that the utility’s board has identified five systemic issues within the company.

One of these systemic issues is the organisational culture, which Nyati described as a “culture that is unhelpful and dysfunctional”.

Other issues included the utility’s over R400 billion debt, criminality within Eskom, its unreliable operations and leadership instability.

Nyati focused on the culture at Eskom as the most pervasive issue, as it is a leading cause of other systemic issues.

In particular, he outlined that when he took over as chairperson of Eskom, there was a shocking lack of leadership abilities and managerial skills.

“We found certain cases where leaders were not leading, and managers were not managing. That means we have the wrong people in those positions,” Nyati said.

He said the utility must get people into key positions who understand Eskom and coal-fired power stations and can lead. “We want people who have lived in this space,” Nyati said.

The chairperson’s comments echo those of the VGBE Energy consultancy group, which produced a detailed report on Eskom’s deteriorating performance.

The group comprised German engineers with extensive experience running coal-fired power plants and spent four and a half months studying South Africa’s ailing power utility.

One of the issues they flagged was general incompetence and the lack of ability to implement theoretical knowledge in practice.

The experts focused on evaluating the competencies of the technical managers, including plant managers, operating managers, maintenance managers, engineering, and outage managers.

In addition to interviews with management, the assessment also included input from written online tests.

“The competencies of the technical managers seem to be at a reasonable level, but there is greater potential for improvement,” the report read.

“We repeatedly noticed that there is a high degree of theoretical knowledge. However, the complex management system makes its application very difficult.”

“In general, leadership competencies are not at the required level. In the past, suitable leadership development programmes existed, and these need to be re-established,” the experts said.

The report noted that many training programmes, including leadership training, have been delayed for several years or scrapped altogether.

“Training should focus on turning skills and knowledge into competencies.”

Nyati said these issues are being addressed through the planned introduction of performance incentives to encourage the right behaviour and the removal of incompetent employees.

After appointing Bheki Nxumalo as head of generation, Eskom “replaced some of the power-station managers who were clearly in the wrong roles”, he said.

He estimated that around 40% to 45% of managers were changed.

“Now you have a team which is going to build the culture that you are looking for. A culture of accountability. A culture of discipline.”

This article was first published by Daily Investor and is reproduced with permission.