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When success works like clockwork

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About a week ago, my wife remarked that she was fascinated by how succession issues appear to work like clockwork at CBZ Holdings, passing without major incident, upheaval or distress each time there is need for leadership renewal at the top – be it board or executive level.

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Having witnessed the most recent power transfers beginning to unfold following the “retirement” of the previous chairperson and the appointment of John Mangudya as the new Reserve Bank governor, she thinks that the way the diversified banking group handles its succession issues will one day be the subject of interesting academic studies.

She is particularly impressed by the way the group seldom recruits externally to replace departing executives and settles instead for homegrown talent, which naturally sets a whole chain of internal promotions in motion.

Surely, it must work quite well at the strategic level of change management/leadership renewal and at the personal level of staff motivation, she argues.

As I planned for this column, her sentiments kept coming back to me until I decided to voice my own two cents-worth on the issue.

I will, however, focus on the three distinct leadership eras which the group has so far gone through, leaving her to do the in-depth academic study should she wish to do so.
The Gono Era: 1995 — November 2003 (9 years).

The first major leadership change was of course when the Commercial Bank of Zimbabwe emerged from the ashes of the Bank of Credit and Commerce of Zimbabwe (BCCZ) in 1991.

Having been brought to life under not-so-auspicious circumstances, expectations for growth and success of the new bank were always going to be sky high, particularly from government which, having rescued it and now wholly owning the bank, was not keen to superintend over another failure.

Someone with both a steadying influence and a firm foot on the accelerator was therefore needed.

Enter Gideon Gono, then General Manager at the Zimbabwe Development Bank (ZDB), appearing to be just what the new entity needed.

While he was young, energetic and already reputed as a hard worker with vaulting ambition, much more than that was needed to turn things around.

In my view, four key issues helped him to lay a firm foundation for a group that later gave the foreign-owned banks a good run for their money.

First, the May 1995 decision to hive off Non-Performing Loans to an SPV called CBZ Nominees Limited allowed the group to mobilise new growth capital.

Second, the decision by government in 1997 to divest from the bank saw ABSA coming in as a technical partner with 25% shareholding, while the International Finance Corporation (IFC) came in at 15%.

This exposed the bank to international best-practice when most local banks were still revelling in the concept of local ownership of banks.

Third, the listing of the bank on the Zimbabwe Stock Exchange on June 29 1998, putting 55% of its shares in the hands of the public meant that as a public company, the bank had to uphold the highest standards of corporate governance.

Last, there is no denying that without lots of government support and patronage, the success of the bank would not have been guaranteed.

The Makuvise Era: November 2003 — April 2012 (9 years)

When Gideon Gono left for the Reserve Bank in November  2003, Nyasha Makuvise, who had hitherto been the deputy managing director and CEO of the bank, took over, setting in motion the wave of internal promotions which have characterised the group’s succession planning ever since.

While Gono’s tenure was characterised by initiatives in keeping with his character as a renowned extrovert (remember the Jewel Bank?), Makuvise’s tenure was more conservative in its approach.

For instance, one of the first things to happen under his tenure was a return to the CBZ brand.

Ironically, it was Makuvise’s tenure that saw the intensification of diversification of the group’s business through a flurry of acquisitive and organic growth strategies.

A holding company was created in June 2005, followed shortly by the acquisition of Datvest Asset Management; then the development of new business units namely CBZ Properties and CBZ Life in 2006; and notably, the January 2007 acquisition of Beverly Building Society.

The Mangudya Era: April 2012 — April 2014 (2 years)
When Makuvise left CBZ on March 31 2012 after 16 years at the bank — nine of which he was the CEO — the group said his departure was “part of a scheduled succession planning transition”.

Most of the pieces of the jigsaw puzzle were already in place by then and CBZ had long been the biggest bank by assets since 2004.

So Mangudya’s major tasks when he handed over the reins of the bank to Peter Zimunya (who had previously been its chief operating office) and took over as Group CEO on April 1 2012 included continuing the operational integration and consolidation of the business while maintaining its pole position and leading product development/innovation.
It may, however, be argued that he did not have as much time as his predecessors to make a discernible mark on the group.

Anyway, as he now leaves the banking group altogether, heading for the lofty heights of 80 Samora Machel Avenue, he has bigger fish to fry.

Meanwhile back at CBZ, tradition had been broken — it is not the bank’s managing director who is taking over as Group CEO; it is Never Nyemudzo, the Group Chief Finance Officer who takes over on May 1 2014 and ushers in a new era — The Nyemudzo era.

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