bruce clarke at rand merchant bank - rija...

This case was prepared by Research Associate Heidi Silove, with Prof Mike Ward. Although it is inspired by actual events some components have been changed to make and facilitate certain teaching points. The case is not intended to demonstrate ineffective or effective handling of an administrative situation; it is intended for classroom discussion only. Copyright ©2002 Graduate School of Business Administration (Wits Business School), University of the Witwatersrand. No part of this publication may be reproduced in any format - electronic, photocopied, or otherwise - without consent from Wits Business School. To request permission, apply to: The Case Centre, Wits Business School, PO Box 98, Wits 2050, South Africa, or e-mail [email protected].

Wits Business School WBS-2002-8

Bruce Clarke at Rand Merchant Bank It was August 2002, bonus time at Rand Merchant Bank (RMB), and Matthew Thompson, head of the structured finance division (SFD), was on the horns of a dilemma. One of his best producers and a top earner in the team, Bruce Clarke, had received a less than satisfactory peer evaluation. The feedback reflected that while he was a successful trader, Clarke was unpopular among his colleagues who objected to his aggression and lack of team spirit. Thompson had been aware for some time that Clarke had been struggling to adapt to the RMB culture, but he had no idea of the severity of the problem or the degree to which the morale of his team had been adversely affected. Two years before, Clarke had been recruited to RMB because of his record deal-making skills. Indeed, during this time, he had demonstrated an impressive ability to procure revenue in an area where most investment bankers struggled and had previously failed. He was a tough negotiator and had generated abundant new business for the firm. Over time, he had shown himself to be a driven, energetic contributor to the team, and Thompson and the shareholders had been delighted with his financial contribution. Thompson knew that Clarke, who was very marketable, was anticipating a large bonus and counting on imminent management recognition. The message emerging quite clearly from his team, however, was that Clarke should receive neither a good bonus nor a promotion this year because he cared little for RMB’s culture and values. Thompson, while acknowledging the importance of team spirit, felt a sense of anxiety. It was as necessary to maintain the team’s motivation, as it was to keep the stakeholders happy. What was he to do?

The South African Banking Industry Four major commercial banking groups dominated the South African banking industry: Amalgamated Banks of South Africa (ABSA), FirstRand Bank Limited (FNB and RMB), Standard Bank and Nedcor. In June 2002, ABSA was the largest of the four with total assets of R208.3 billion. FirstRand Bank followed with total assets of R198.9 billion, Standard Bank with R196.9 billion and Nedcor with R146,3 billion1(see Exhibit 1). Together, the four major

1 Email correspondence from Casper Troskie at the Reserve Bank, 28 August 2002: www.reservebank.co.za, (accessed 28 August 2002).

Bruce Clarke at Rand Merchant Bank

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banking groups accounted for 80% of the sector’s $100 billion asset base in 2000.2 FirstRand Bank displayed the highest percentage growth (30.56% from June 2001 to June 2002).3 In a banking survey carried out by PricewaterhouseCoopers (PWC)4, investment banking was identified as the most competitive sector in the banking industry while the greatest threat to banking in South Africa continued to be the ‘brain drain’.5

Company Background FirstRand Limited was one of the largest financial services groups listed on the Johannesburg Securities Exchange (JSE). 6 It was a diversified group with investments mainly in banking and insurance, created when the financial services interests of RMB Holdings and Anglo American Corporation merged in April 1998. In the 1999 annual report the Chairman and Chief Executive articulated the advantages of the group, “We are in the unique position that RMB Holdings, which has been entrusted with the management of the group, has its roots in merchant banking, thereby giving the whole group the heartbeat of a merchant bank”7 (see Exhibit 2). History In 1977, three entrepreneurs − GT Ferreira, Laurie Dippenaar and Pat Goss − formed a small company called Rand Consolidated Investments (RCI), which specialised in leveraged leasing and off-balance sheet financing. In 1978, Goss left to become involved with his family business and Paul Harris joined. In 1985, RCI merged with Rand Merchant Bank (a company founded by Johan Rupert), and Ferreira, Dippenaar and Harris took the company to new heights. Harris was chief executive officer (CEO) from 1992 to 2000 before being succeeded by Michael Pfaff in November 2000.8 Profitability RMB’s net profit before tax for the year ended 30 June 2002 – a year characterised by volatility and difficult international markets – was R910 million. This marked an increase of 30% on the prior year’s R700 million.9 Business Awards Over the years, RMB had received numerous awards for excellence in a range of areas.10 First in Futures. RMB single-handedly introduced futures trading to South Africa in the 1980s before formally handing the market over to the regulatory authorities, and was a founding member of the South African Futures Exchange (SAFEX). Most Innovative Deals. Two transactions were rated first in their respective categories. RMB was awarded ‘Africa Transport Deal of the Year’ by Euromoney in 1999 for the N3 toll road built between Heidelberg and Durban. They were also awarded “Africa Deal of the Year” in 2000 by Privatisation International for the Louis Trichardt Prison – the largest privately operated prison in the world.

2 The Economist Intelligence Unit, South Africa Country Profile 1999-2000, 2000. 3 Casper Troskie, op cit. 4 A leading professional services provider to top financial services organisations. 5 PricewaterhouseCoopers Strategic and Emerging Issues in South African Banking, 2002 edition,. p16. 6 www.rmb.co.za, about us link, (accessed 20 August 2002). 7 Chairman’s and Chief Executive’s Report, FirstRand Ltd, June 1999. 8 Ibid. 9 Ibid. 10 www.rmb.co.za, op cit.


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Leading M&A Player. The corporate finance department was ranked first in the Ernst & Young annual review of mergers and acquisitions (M&A) for three years in a row – 1997, 1998, 1999 and then again in 2001. Trading. RMB was rated the Best Debt House in South Africa along with Deutsche Bank in the Euromoney Awards for Excellence – 2000/2001. They were rated the Best Debt House once again in South Africa by Euromoney in 2001/2002. Top Rated Merchant Bank. RMB was ranked first in four key merchant banking categories in the PriceWaterhouseCoopers millennium survey on South African Banking in 2001: • structured finance; • private equity; • corporate finance listings; and • corporate finance mergers and acquisitions. RMB was ranked first again in three key merchant banking categories in the PriceWaterhouseCoopers survey on South African banking in 2002: • structured finance; • corporate finance listings; and • private equity. Best Company to Work For. In 2000, RMB was voted the Best Company to Work For in an independent study conducted by Deloitte & Touche Human Capital Corporation in conjunction with the Financial Mail. In the 2001 survey, they were placed second, but still remained number one in the Financial Services Category. In the 2002 survey they were placed fourth, but still top of the merchant banks. The objective of this survey was to determine the company most able to attract and retain capable and talented employees. This competitive survey began in the year 2000, its main purpose being to ascertain what motivated talented people to remain in an organisation. More heavily weighted than any other feedback in the evaluation process was employee input. Other information was gathered from employers and external market perceptions. Market input included business schools, CEOs of all participating companies, employment agencies, formally recognised training institutions and trade unions. A randomly selected sample of approximately 250 employees, distributed across the entire company, were asked to complete an “employee” questionnaire that investigated issues like: remuneration satisfaction, job fulfilment, colleague relationships, company pride, ability to trust superiors, work importance and future security. Harriet Dicks, project manager for Best Company to Work For, who sat on the adjudication board together with nine other selected judges, commented, “Common features of the top companies are that each is highly successful and radiates the energy and dynamism attractive to tomorrow’s leaders. Each company is a rare breed. There is usually a culture of high performance, which includes a commitment to quality work, trust between managers and employees, good teamwork, positive relationships, job satisfaction and a willingness to go the extra mile.”11 An advantage of this high profile survey was the significant impact on the top companies, both in terms of exposure and media coverage. It also created a high degree of goodwill among employees, positive publicity and indirectly impacted on the bottom line.

11 Telephone interview with Harriet Dicks, project manager for Best Company to Work For, 2 September 2002.


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RMB’s victory in 2000 resulted in an unprecedented number of high quality, unsolicited CVs being sent to them following their new status as “Employer of Choice”, which greatly enhanced their ability to attract and retain key personnel.12 At the award-winning ceremony for Best Company to Work For - 2001, Pfaff elaborated on this notion of traditional values and innovative ideas and highlighted the importance of the fit between the people and the culture. “If you want to attract the best people,” he emphasised, “you had better provide the best environment.”13

Culture

Hard on results, soft on people – LP Collet14

RMB wanted to position itself in the business community as having a unique and empowering culture that could be summarised as a combination of “traditional values” and “innovative ideas”. As Collet, the chief operating officer (COO) of the company maintained, “If you get the culture right, the product will follow. It is vital to concentrate on motivation and positive reinforcement. I believe very firmly that every person is different with different strengths and an innate need to make a significant contribution. At RMB, we encourage this and advocate the notion that we are partners for life.”15 Michael Pfaff (CEO) added, “Our positioning as the Merchant Bank of Choice makes our reputation as the Employer of Choice our driving force. Ultimately, the high energy, which continues to set RMB up for success, is released by our culture and that is valued above all else. My job is to nurture and build an existing culture. I am one of the custodians of the culture at this point in time. There is no way I would change anything for change sake because the magic at RMB is the culture.”16 “A good description of RMB,” said Carolynne Waterhouse, head of public affairs17, “is that it is a place that brings out the best in people. Whether you are cutting the grass or cutting the biggest deals, the organisation appeals to your better nature in the way that it treats you. One of the pillars of the culture is mutual care and respect. Another pillar is pride. The people at RMB are proud to be part of such a success story and part of an organisation with sound values. Even the plants thrive in the RMB environment.” (See Exhibit 3.)18 Pfaff regarded the culture of RMB as any other investment that needed to be sustained. “The RMB culture has been built and sustained over 25 years. It is not something that can be built overnight, but it could certainly be destroyed rapidly.”19 According to a Financial Mail survey (Ranking Merchant Banks, November, 2001) it was interesting to note that despite RMB’s lower balance sheet capability relative to other banks, it nevertheless topped the charts and outshone all others in terms of its intellectual capability, managerial quality and ability to attract people (see Exhibit 4).

12 Deloitte and Touche, Best Companies Report, 2001. 13 www.rmb.co.za (accessed 28August,2002).. 14 Taken from a presentation by LP Collet, chief operating officer (COO) of RMB, ‘Nurturing a Creative and Intrapreneurial Culture’. 15 Interview with Collet, 13 August 2002. 16 Ibid. 17 Interview with Carolynne Waterhouse, head of public affairs at RMB, 19th July 2002. 18 Ibid. 19 Pfaff’s speech, op cit.


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Diversity Diversity, Diversity, Diversity– Cultivate Opposites – Collet.20 At RMB, difference and heterogeneity were encouraged. The philosophy that evolved organically over the years was founded on a “ying/yang” type theory of opposites (see Exhibit 5). It was based on the idea that diversity was critical in order to create a successful melting pot of creative ideas. “Our creed is one of creative opposition,” emphasised Collet. “We encourage creative dissent.”21 “From my experience, if you put opposite people in teams, they become profoundly dynamic. It is a simple, simple rule, and yet most people struggle to embrace it. When there are diverging ideas in a team, one is forced to explore the unknown. There is often resistance to this notion, but opposite ways of thinking generate real creativity. One has to oppose one’s natural inclination to create a team that consists solely of chartered accountants (CAs) or engineers. “At RMB, we encourage creative dissent. It can be quite trying at times, but the ideas emerge from this. The objective is to have a team where ideas collide, but don’t crash, and it is critical that this heterogeneity is well managed. The skill for managing it is very subtle and not easily replicated or taught. Some people are naturals and others are not. An issue that I am unyielding with is ‘immediate problem solving’. If there is an issue among team-members, it is vital, in my opinion, that people get together that day to sort it out.”22 In line with the “ying/yang” style of doing things, RMB encouraged its employers to diversify the employee base. “Hire people unlike yourself,” said Collet. “If you do this, you will constantly challenge yourself and your boundaries. A principle policy of ours is to hire new blood to constantly challenge existing thought.”23 (See Exhibit 6.) The Book of Rules To illustrate the importance of culture, one of RMB’s innovative policies was to present each new employee with a book entitled The Complete Book of Rules at the start of their career with the company. The employee was usually both unsure and surprised upon opening it. Other than the beautiful cover and the values statement on the inside of the cover, the employee discovered the book to be empty and without any “rules”. “In true RMB style,” explained Waterhouse, “management was conveying a crucial message in a humorous way, that values are more important than rules. This emphasis on freedom rather than restriction was to empower and liberate the individual almost to a point of discomfort.”24 (See Exhibit 7) Empowerment Pfaff highlighted the far-reaching effects of empowering the people. “Empowerment is based upon trust. You cannot empower people if you do not trust them. With the trust comes accountability. If people feel trusted and accountable, they respond well. And it brings out the best in them.”25 Collet agreed with this. “We are hard on results and encourage people to move

20 Collet’s presentation, op cit. 21 Interview with Collet, op cit. 22 Ibid. 23 Interview with Collet, op cit. 24 Interview with Waterhouse, 19 July 2002. 25 Pfaff’s speech, op cit.


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the decimal point. If a person brings in R1 million a year, we encourage them to bring in R10 million a year. This can only happen in an empowered culture.”26 Pfaff’s philosophy hinged on the importance of recognition, which was displayed through financial and reputational awards. In order for people to truly trust the organisation, they had to believe that the rewards for success were fair and consistently applied.27 He believed that fundamental to the process of empowerment was the encouragement of open debate. In order to be creative and innovative, there had to be an environment in which people did not feel inhibited. They had to be encouraged to speak their minds and to debate issues. People had to feel free to make mistakes. This enabled them to learn faster and become more innovative.28 “People are empowered and trusted in this organisation,” Waterhouse concurred. “But at the same time, we expect results, as mediocrity is not tolerated. At RMB, I feel enormously stretched.29 “My approach to empowerment has always been to encourage people to work according to their own unique style,” said Collet. “My philosophy has never been to carry a big stick, and only to focus on quarter-to-quarter performance. The numbers are certainly scrutinised, and do not think for a second that we are not extremely ‘hard on results’, but we also try to see contributions over a five-year horizon with the hope that each person, if they are basically talented and motivated, will grow into someone special. I cannot tell you how many experiences I have had where a person in my team performs poorly for a year, is mediocre for the second and then suddenly shoot the lights out in the third. If you focus on that third year in particular, you realise that they have made more money than most people do in 10.”30 Remuneration Policies Exceptional success deserves exceptional reward – Collet31 “Remuneration and bonuses are unbelievably important in investment banking,” explained Collet. “At RMB, we prefer a large portion of the remuneration to be performance related. 32 “You can actually write your own cheque to the extent to which you perform,” added Waterhouse. “This system appeals to those who have an appetite for risk and believe in themselves.”33 R100 split. A worthwhile and useful exercise, originated by Collet and practised by many teams, was “the R100 split”. Towards bonus time, members of a particular team were called into a room. They were then asked to privately vote on how they thought R100 should be split among themselves. The results of this exercise aided the team leader in his bonus allocation decision, which was made together with the management board (MANBO). The privacy of the voting contributed to the accuracy of the distribution and left very little room for greed and much room for honesty and self-assessment. This assessment tool was used in conjunction with a performance evaluation system called Aviator and other ongoing performance measurements (see Exhibit 8).

26 Interview with Collet, op cit. 27 Ibid. 28 Ibid. 29 Interview with Waterhouse, op cit. 30 Ibid. 31 Collet’s presentation, op cit. 32 Ibid. 33 Ibid.


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Waterhouse, remarked on how amazed she always was at the consistency of the responses from her team members. Collet agreed with this, “It is a very telling system and people are not fools. The beauty of the system is that bonus amounts are ultimately guided by one’s own co-workers.34 “The system is very unusual and atypical for a corporate environment,” explained Collet. “Everyone shares in the same bonus pool and my secretary does well if I do well. It is a wonderful and rare thing that support people do well if dealmakers do well. This means that every single component of our staff is incentivised to do well. Elsewhere in the country, you may have a top risk manager who sits in the back office and is unlikely to earn even a small percentage of what the dealmaker does. One of our risk managers this year is one of the highest paid in the team.”35 RMB strove to reverse the structure of traditional businesses, which operated according to a hierarchy with one Very Important Person at the top (CEO), some Not So Important People working under him/her (the managers) and finally the Not Important At All People comprising the majority of the employee base. RMB deliberately aimed to invert the pyramid. It endeavoured to be a company that regarded and recognised the employee base (majority of the company) as the Very Important People while management was perceived to be less important. This was achieved by dividing the business into small independent autonomous units in order to inspire each person with the “owner – manager” mindset.36 Pfaff often warned that the moment the organisation started to think it was more important than the people, the culture would start to disintegrate. “Intellectual capital is especially important in the RMB environment and when it is not valued sufficiently, the culture begins to change,” he cautioned. Leadership flat It’s tough at the top –- RMB Advertisement.37 “At RMB, we deliberately de-emphasise the notion of ranking,” explained Waterhouse. “We operate according to a flat structure without traditional banking titles. This structure is conducive to individual empowerment and accountability, which brings out leadership qualities.” 38 Evidence of the “inverted pyramid structure” was the junior board, which was introduced two years previously. RMB believed this to be a unique concept, which enabled key people across the group (who demonstrated the potential to become tomorrow’s leaders of the bank), to be exposed to strategic leadership issues. Junior board members were presented with many of the same issues that were discussed by the MANBO. The responses that emerged were often subsequently pitted against the MANBO input, compared and the outcome was interesting and beneficial for all. From this environment, five new MANBO directors were recently selected, one of whom was Raphael Martin, 26 years old, head of Special Projects International.39

34 Interview with Collet, op cit. 35 Ibid. 36 Interview with Waterhouse, op cit. 37 Provided by RMB public affairs department, 22 October 2002. 38 Ibid. 39 Interview with Collet, op cit.


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Fun and Team Building We work with passion and have fun – RMB website40 Part of the liberation involved permission to have fun and a balanced lifestyle. Some of that fun was experienced during the numerous charity drives that were organised, one of which involved getting all the “macho” deal-makers to knit blanket squares for charity (see Exhibit 11). Other times, fun was experienced in a simple way, for example, a lovely bunch of fresh flowers would be found on your desk on spring day or on your birthday. At one of the annual conferences held at Sun City, every single employee participated in the creation of a painting that was eventually held up at the Superbowl for all to see. This was believed to be unifying for staff. During the annual conferences, roles were often deliberately inverted in order to emphasise the flat structure. This happened through offering luxury accommodation to administration staff, while high profile employees took less luxury forms of accommodation. It was believed that the undoing of hierarchy would reinforce loyalty. The purpose was to motivate and energise staff, who would then feel compelled to re-evaluate one another and their integral place at the bank. There was even an RMB wedding reception that took place in the canteen. RMB believed that these were the things that people remembered.

The Queen This special atmosphere that pervaded the company and accompanied the unique culture was colloquially referred to as gees, meaning “spirit” in Afrikaans. There was a special gees custodian at RMB whose permanent role it was to instil and nurture this gees, and it was her sole task to ensure that the morale of every employee was taken care of. The person responsible for implementing this gees was endearingly referred to as “The Queen of the Bank” who lived in her “palace” on the 13th floor. It was her role (with the help of a generous budget) to promote and maintain a sense of well-being among all employees of the bank. The Queen of Gees, Her Royal Highness, Anneke van Zyl, had “reigned” over the bank for 22 years. Her contribution had been felt since the very beginning when she served as a multi-functional assistant for the original pioneers. This spirit of gees continued to grow as the years progressed, acquired official status and became like a presence that pervaded the bank. Her purpose, in her words, was to create “a home away from home”. “I am there to gently nudge the people from time to time, to remind them of the manners that their mothers taught them at home long before they became important business people in smart suits. If I ever feel that people have forgotten these manners, I try to correct them. I am given ample license to guide them in a gentle but firm way,” she said.41 Her care was expressed through birthday presents that arrived on employees’ desks once a year – the employee also received a call from Michael Pfaff on that day. Staff were given mother’s/father’s day gifts; bunches of red roses on significant anniversaries, a gift for an employee’s child’s first day at school or a good luck gift for their child who was writing matric examinations at the time. Spouses of employees were also shown appreciation and support. When RMB was voted Best Company to Work For in 2000, the Queen, who was advised only a day or two in advance, organised a plush red carpet to be laid out from the parking lot to the offices so that staff could genuinely feel like royalty. On each person’s desk was placed a

40 www.rmb.co.za (accessed 1 September 2002). 41 Interview with Anneke van Zyl, 13 August 2002.


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special coffee mug that said “The best company to work for employed me!”(see Exhibit 9). In 2001, a full page advertisement in the Business Day thanked each employee (by name) for working at the bank (see Exhibit 10). A core role of the Queen was to facilitate the many fundraising gestures encouraged by the bank. These charity drives were intended to instil the staff at RMB with a sense of philanthropy and goodwill, and to impart the message to them that earning a good living becomes more valuable when some of that money is shared with other less fortunate individuals. Drives at RMB had included innovative ventures, such as the SPCA food collection and “Teddy Bear Clinic” (see Exhibit 11 for further information on the Queen’s Charity Drives). The Queen also distinguished between herself and her persona. When asked for something, she often responded by saying that she would speak to the Queen. People responded well to this imaginary leader and Van Zyl often received emails asking that she “speak to the Queen” about any particular matter. According to Van Zyl, this indirect approach added humour to the situation, but also enabled her to encourage and coach people in a subtle way. She was, as a result, able to approach employees and challenge them for failing to maintain certain standards at RMB. “If they fail to clear out the ashtrays in the smoking room, for example,” she said, “I just tell them that the Queen will be most offended by this and may take away a good parking space or some other privilege.” The result was that the staff member, who was reprimanded in an indirect way, was often more open to change. The Queen’s chief focus was on people who were arrogant, took themselves too seriously, lacked a sense of humour or failed to contribute to a sense of team spirit. It is thus understandable that Bruce Clarke, who worked in the structured finance team, had of late become one of the Queen’s disappointments. His opposition to the RMB culture had necessitated some hard work on her part to identify and address his lack of gees.42

RMB Structured Finance

Managing in an environment like ours is not without its complications! – Thompson43

Structured finance was a division at RMB that provided structured debt solutions to the corporate and institutional market. The skills that were required to be a successful structured financier included legal, accounting, mathematical, financial and taxation. Structured finance consisted of a number of focus groups: property finance; cross border finance; securitisation; public enterprise and non-taxpayer finance; credit derivatives and statutory capital solutions; asset based finance; black economic empowerment funding solutions; acquisition finance; leveraged finance and equity linked capital markets. Each focus group consisted of a few highly focused individuals who had complementary skills. These individuals studied the chosen market niche and formulated tailored solutions for clients’ needs. It was through this focus on both the customer needs and the intimate knowledge of the chosen market niche that RMB attempted to differentiate its product offering or tailored solution from the competition.

42 Interview with Anneke van Zyl, the Queen, 13 August 2002. 43 Interview with Matthew Thompson, head of structured finance, 13 August 2002.


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Matthew Thompson Thompson was elected co-head of the structured finance team together with Lance Mitchell in July 2000. This appointment was made by Collet, who canvassed team opinion and took the matter to MANBO who considered the issues and agreed to the appointment. Thompson, a chartered accountant (CA), had been with RMB for six years. Prior to this, he had worked as an accountant at PWC for three years. He was attracted to RMB in April 1994 by the culture and the owner-manager mindset. “When I joined RMB, I was very impressed with the intellect and values of the people interviewing me,” he comments. Thompson, a former provincial cricketer, had impressed Collet with his high energy levels and determination. They also liked his leadership style, team spirit and all-round ability. Before long, Thompson showed himself to be a team player with dedicated focus. He also demonstrated an ability to originate new deals. He was a very effective deal-closer and had won the award for the Best Deal-maker in both 1999 and 2001. Thompson’s co-head, Lance Mitchell, also an accountant, had graduated cum laude from the University of the Witwatersrand (Wits) in 1989. He had joined the team in 1996 on Thompson’s recommendation. They had studied at university together and Thompson remembered his superb intellect and quiet strength. He had also been impressed with Mitchell’s “self-starter” mentality and traditional values. Mitchell had developed a reputation in the community for being a top dealmaker and was highly respected by colleagues. Prior to his employment at RMB, he too had served his articles at PWC, after which he had spent two years in London, auditing in a top firm. On his return to South Africa, Thompson (who had always been instrumental in terms of recruiting good people for the team) had encouraged Mitchell to join.

Bruce Clarke Bruce Clarke had been involved in the banking and insurance industry for seven years. Prior to his appointment at RMB, he had worked as the head of structured finance in a much smaller investment bank in Johannesburg. He was known to be an all-rounder, but had also developed a reputation around his talent regarding aircraft financing. Clarke was a chartered accountant with an undergraduate degree in mechanical engineering. He had also completed a Chartered Financial Analysts (CFA) degree during his working years at the previous bank. This financial markets degree had equipped him with an in-depth knowledge of equities, bonds and derivatives. He had studied with Matthew Thompson at University, where they had completed their accounting qualifications together and had remained in touch over the years through their joint enjoyment of golf. One Sunday morning, after a round on the golf course, Thompson casually suggested that Clarke consider joining his own structured finance team, believing that his specialised skills in aircraft finance could boost the team. Thompson and Mitchell, who had had the opportunity to work with Clarke on several structured finance transactions involving locomotives, had been very impressed with his work and felt quite excited at the prospect of recruiting someone as talented as Clarke. Thompson remembered Clarke to be “a rather maverick type of character” at university, who constantly challenged the professors and rarely accepted any piece of information at face value without questioning it. He nevertheless also recalled Clarke as an exceptionally bright student who often understood complex concepts in a way that nobody else did. Clarke seemed quite excited with the proposition. He remembered how inspired he had been with Thompson’s and Mitchell’s business skills on the occasions he had worked with them. He recalled a specific structured finance transaction involving locomotives, where RMB had


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syndicated a portion of the debt to other participants, one being Clarke’s previous firm. Clarke had been most impressed with the manner in which RMB had executed the deal. Thompson had witnessed an aggressive streak in Clarke, which had often manifested itself on the golf course, and was slightly wary, but decided to ignore it thinking that if his aggression was correctly channelled it could be used to RMB’s benefit. Aggressive people often made the best dealmakers. Thompson was also aware that many of the aircraft finance deals that had been presented to RMB had slipped through their hands and had been closed by Clarke in his firm. He thus perceived Clarke’s recruitment as a unique opportunity to redirect the business to RMB. He convinced Clarke that he would have a successful career at RMB where his intellect, together with RMB’s underwriting capability, would position him to land many of these large, complex transactions. He also implied that he could “write his own cheque” and become a rich man once he had concluded these transactions. Clarke’s decision to join RMB at the end of 2000 was prompted by a multitude of factors. Firstly, he needed a change. He had grown tired of working in a small company and was keen to expand his profile. He had also had many opportunities to deal with RMB and on each occasion had been significantly impressed by RMB’s reputable work ethic, position as the employer of choice and wonderful innovations – particularly RMB’s pioneering of the inflation-linked debt market in South Africa. In addition to this, many corporate clients with whom he had previously had dealings had switched to RMB in the belief that with RMB’s track record, skilled staff and size, their current and future transactions would be looked after better. Clarke was excited but had mixed emotions about joining. While he felt that he wanted the challenge, he couldn’t help worrying about the loss of the excellent position that he held in his current firm. He was highly respected by his colleagues and in some ways, could quite comfortably continue concentrating on and perfecting his own niche market, as he had done over the years. In addition, he would have to take a step down from his position as head of structured finance, a position that he had worked hard to earn. On the other hand, Thompson’s offer seemed like a veritable challenge and appealed to Clarke’s sense of ambition. Thompson allayed Clarke’s fear of losing his sense of responsibility, implicitly promising to promote him to the “head of aircraft finance” within a few months of joining. At the same time, Thompson was sure to point out that the RMB organisation was not hierarchical and placed little emphasis on titles. This was a fundamental part of RMB’s culture and Clarke should ensure he was comfortable with this. He encouraged Clarke to join, emphasising that he now had the opportunity to move out of the second division in order to assume a key role in a premier league team where his earning power would be significantly enhanced. Thompson also explained to Clarke during this recruitment stage that RMB worked as a meritocracy or a “merit based system”, which rewarded according to contribution. He was told that his ability to make money would be extremely important and constantly monitored and examined, provided that he adhered to, and practised, RMB’s ethos of “traditional values, innovative ideas”. The Early Days Feeling confident that he would meet expectations and that he would be recognised almost immediately, Clarke accepted the position and entered the team. From the beginning, Clarke was successful. His colleagues were extremely pleased to welcome a person with such an all-round ability to procure deals and to bring in revenue. In addition to his aircraft finance structuring skills, he had a strong knowledge of the capital markets, an area that had lately increased in importance in the banking industry. The South African capital market was following a world trend in which the large commercial and investment banks were being


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dis-intermediated, and an understanding of new products was critical if one was to remain in the game. He also demonstrated proficiency with regard to syndicating transactions and the design of debt instruments for which investors had an appetite. His unusual talent for making the right contacts and bringing in deals in areas that others found difficult to navigate, was exciting. Most of all, he was respected and extremely competent in aircraft financing, an area that needed new ideas. Up until then, the structured finance division had not been the market leader in this area and it welcomed Clarke’s skills and experience. Clarke also brought with him important client contacts. He began to finance significant deals for the National Carrier, a client that, until then, the team had struggled to clinch. In addition to this, his well-developed reputation in the aircraft-financing arena brought many new people through the door, who then displayed interest in other products, and so Clarke’s presence had positive repercussions all round. Team members were continually impressed at Clarke’s ability to conclude a deal. He demonstrated strong mathematical talent and dexterity with information technology and spreadsheets. He also had an impressive knowledge of the South African tax regime. “He was a real hustler, opportunist and wheeler-dealer,” remarked Thompson, “and brought a lot of exciting new business to the team.” The Cracks Appear “It took me a few months to become cognisant of the fact that all was not well with Clarke,” said Thompson. “I started to realise, quite unwillingly at first, that Clarke, with all his advantages, also unfortunately had his shortcomings.” The trouble all began with a series of undercurrent comments that started to emerge from the team, alerting Thompson that things were not quite right. Clarke was a dynamic deal-maker, but his shrewd and opportunistic streak very often translated itself into self-seeking behaviour. The protocol in the team was that members always supported one another and shared any intellectual capital, such as client and deal information, in order to gather input from one another. While people tended to work in small teams, which informally competed with one another, it was accepted practice that all deals being worked on would be put onto a common deal list and shared at regular division meetings. The common deal list’s objective, from a team perspective, was to ensure that all team members were aware of what deals were being worked on and by whom. Management also found it a useful tool to measure activity and to forecast which transactions were close to conclusion. Clarke, however, pursued many deals without recording them on the common deal list. This began to annoy his associates a great deal, as intellectual honesty was regarded as one of the cornerstones of the structured finance team’s value base. The team members became suspicious of Clarke’s motives. Thompson became aware of this behaviour, but thought the other team members were over-reacting. They may have even been slightly jealous of Clarke’s success. Clarke also allegedly tried to steal other people’s contacts. “To give an example of this,” said Mike Davidson, a member of the structured finance team, “a client of mine – a wealthy South African businessman whom I had dealt with for many years – wanted a private jet financed. Clarke saw the message coming through my secretary and told the secretary he would pass the message onto me. Instead, he responded to the client without informing me and proceeded to secure the deal for himself. When I heard about it, I felt shocked and betrayed. It is just not the ways things are done here at RMB. Up until then, I had had mixed feelings towards Clarke. I knew that he was difficult, but forgave him because of his unique revenue generating talent. At this point, however, I completely lost faith in him and started questioning his traditional values.”44 44 Interview with Mike Davidson, member of the structured finance team, 15 August 2002.


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This incident unearthed a host of complaints about Clarke and his behaviour. It appeared that despite Clarke’s talent, he was actually very difficult to work with. His team members felt that he was not only unco-operative, but also aggressive at times. “I suppose aggression is the natural side effect of charisma and initially, we all tolerated it,” commented one of his team mates, Sean Thomas. “In the beginning, we were all excited because he was making money, but gradually, he started to display a selfish, mercenary streak. While it is expected that dealmakers have a certain amount of drive and ‘hired gun’ mentality to make money, in Clarke it became overdone to a point of destructiveness.”45 Lauren Peters, another member of the structured finance team, agreed. “I found him to be totally self interested. It is common practise to work on different deals in teams. Clarke always seemed to be working alone. At first, I put it down to the fact that he was merely a loner. I then realised that his motivation was purely to maximise his bonus, even at the expense of others. Clarke did not want to be part of a team if he thought that his remuneration would be split in any way. 46 “The magnitude and complexity of aircraft finance deals demand that these deals be worked on by people with multi-disciplinary skills over a long time,” she continued. “Over time, I noticed that Clarke liked to shortcut the process and do everything on his own. This became a service compromise and disadvantaged the client who, in many situations, needed a range of people with different types of expertise as opposed to one person to work on a deal. But Clarke did not care!” “He was prepared to make the client wait because he realised that there were huge amounts of money to be made out of concluding a deal on his own. He was not a team player in my opinion, and always seemed to grab his own deals. It is true that some dealmakers always work in large teams and others don’t, but Clarke preferred doing everything himself. He was very proactive in terms of creating his own profile.” Another colleague, Alan Green, involved in property finance, commented on Clarke’s violation of the unspoken agreement between different teams in the structured finance group to focus on their specialised work only. For example, if one team was working on aircraft finance, it would have been regarded as highly inappropriate to edge into the domain of another team, unless called upon. Clarke routinely overstepped his boundaries in terms of this and crossed into the territory of other teams.47 “Clarke once called a client of mine and tried to involve himself in a deal that really had nothing to do with him,” he remembered. “In his own charismatic way, he charmed the client into believing that he was a necessary component of the deal. When I spoke to this client, who requested that Clarke attend our next meeting, I was really angry. But this type of thing happened on a regular basis. He led clients to believe that he was indispensable. He started to think he was larger than life and deserved a different remuneration arrangement.” Bonus Conflict Clarke had clearly hoped that this solo involvement in a multitude of deals would directly impact on his back pocket and it became clear towards bonus time at the end of 2001, that he was expecting a large bonus that reflected all the deals he had concluded. Clarke expected to be remunerated according to a fixed formula, even though it had been explained at the outset that at RMB there was no fixed bonus system whereby you were rewarded according to the number of deals you had concluded.

45 Interview with Sean Thomas, member of the structured finance team, 15 August 2002. 46 Interview with Lauren Peters, member of the structured finance team, 18 August 2002. 47 Interview with Alan Green, member of the structured finance team, 20 August 2002.


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Thompson remembered that he had been quite transparent about the fact that bonuses were subject to discretion and that one was judged on both quantitative (financial) as well as qualitative contributions (performance evaluation systems). He had also emphasised that the reward system was far more complex, taking into account all sorts of other factors, such as interpersonal and team-building skills. In Clarke’s case, the system went against him because it ensured that his individualistic and selfish behaviour was included in the bonus calculation.” “When it came to bonus time last year,” commented Thompson, “Clarke demanded that he be treated differently from everybody else. It irked me that he felt superior to everybody. Yes, he did manage to do wonderful things, but didn’t we all? It really began to irritate me that he did not respect the way things were done around here. Because he was a huge profit generator and had in fact participated in more deals than most of the other dealmakers, he used this as a reason to insist on a fixed formula based incentive and was subsequently turned down.” Clarke clearly did not accept this. When his request was rejected by Thompson, he went above him and spoke directly to the CEO and CFO, who similarly declined his request. The remuneration committee assured him that they would not consider changing to a formula based salary and bonus system. They explained that they had run the company this way for 25 years and reminded him that the remuneration system had been made clear to him upon employment. But Clarke still objected. He did not leave it there, but began to create ructions in the team. In fact, despite all this, his bonus turned out to be quite substantial. He became disruptive and started to break down the morale and team spirit. He tried to lure many members of the team, particularly the younger, newer ones, onto his side and convinced them that they were all being under-remunerated. “This behaviour continued to create mistrust among my group, who could no longer regard him as a team player,” asserted Thompson “I really tried to convince them to ‘keep their chins up’.” He described how he tried to follow up by explaining to people, “He hasn’t learnt the RMB system yet and will soon adapt.” But the problems continued and Thompson, who was relatively new in his management role, was reluctant to wield a heavy hand. “I guess I just knew how much value he was adding and tried to ignore the real issue. Deep down though, even on a subconscious level, I knew there was a problem. “He never attended the weekly team meetings, even though I tried to keep them to a minimum because I knew everybody was busy. If the meeting was not personally beneficial, Clarke would make any excuse not to attend, although I emphasised the fact that the regular contact was very important for purposes of communication in the group.” When Thompson tried to speak to him, Clarke responded with the following, “You hired me for my money-making skills. Now that I am doing my job, I am being hassled about all sorts of trivial things, which I really believe stem from pure envy. I am a hard worker, natural leader and take nothing for granted. I have also introduced many new contacts to the team and have revived the whole aircraft finance division. I feel that people should accept me for who I am. I know that my interpersonal skills are sometimes not quite up to scratch and that I sometimes overstep a boundary on the interpersonal side, but that is because I am basically passionate about my job and don’t always have time for all the niceties. I try my best and should be left alone to do that which I do best.” The Queen Reacts This disruptive behaviour quickly earned him a question mark on the Queen’s list. He believed that because of his unique deal-making ability, he was exempt from every rule. “RMB takes its parking allocation quite seriously,” emphasised Van Zyl. “Clarke insisted on showing us that he


15

was better than anybody else by constantly parking his car right next to the lifts in an illegal parking place. He thought that because he was the dealmaker, he had to have special privileges. ‘The Queen’ e-mailed him on several occasions, persistently reminding him that he was taking liberties. Eventually, we had to have his wheels clamped. This goes against the sense of fun and balance that we try to encourage at RMB, but he really pushed us to our limit.”48 “We know from past experience that when people have a negative attitude, the first place that they vent this problem is with security personnel,” she continued. “Clarke was quite rude to security and he routinely insisted on being allowed access to the company without his access card. This is a very strict security rule at RMB that other people treat with respect. He resented being one of a group and the security staff resented feeling obliged to break rules for no reason. This caused much dissent and unhealthy vibes between him and the ground staff,” noted van Zyl. “Another thing is that he insists on smoking in his office,” she bemoaned. “With today’s strict legislation, nobody does that because people find it quite offensive! When ‘the Queen’ suggested that he rather smoke in the specially appointed communal smoking room, he complied initially but soon reverted to office smoking, which really incensed his colleagues.” The Million Rand Prize The final incident that convinced Thompson that he needed to do something quickly took place in the middle of 2002. Thompson had decided to launch an extraordinary money-making incentive in the form of a competition, which began in March and was to be judged after three months. “With the September 11 attacks so fresh in everybody’s minds and the after-effect on world stock markets, our team’s morale was at an all-time low,” recalled Thompson. “I knew that we needed to take drastic action in order to inject some positive energy and morale into the team. We had lost our innovative edge and needed to do something that would energise and re-awaken everybody. “This resulted in my decision to award a prize of R1 million to whichever deal-maker could come up with the most creative money-making idea. It was amazing! Suddenly, we had innovations coming out of our ears. The primary purpose of the prize was to motivate my colleagues to work even harder than usual. Its goal was to inspire them to propose a range of incredible ideas that would give RMB a competitive advantage in the structured finance market.” Everybody worked really hard to come up with innovations and they all did. It soon became apparent to Thompson though that Clarke’s idea topped the list and deserved to win. Clarke, who had immediately got down to business, had come up with a remarkable concept. His idea entailed the creation of a highly innovative and original structure for the tax-efficient financing of narrow-bodied aircraft (eg: the Boeing 737-800) using hybrid instruments. Clarke had aligned himself with Roger Singer, a junior member of the structured finance team, who was prepared to do much of the research and financial modelling that this project required. Singer was a particularly shy individual, who had worked in the team for years and was happy to work behind the scenes and to aid Clarke in the process. Thompson believed that Clarke deserved to win the prize because his idea was truly brilliant. This was verified by his superiors whom he had included in the decision-making process. It was decided to award the 50% of the prize to Clarke, the innovator and implementer, and 50% to his co-worker, who had after all done all the “backroom” research and development that had enabled them to effect the plan. They all agreed that this was fair and just, but Clarke was completely taken by surprise. 48 Interview with Anneke van Zyl, 21 August 2002.


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Thompson remembered how disgruntled Clarke had become when he realised he would have to split the prize with his co-worker. He had clearly expected to win the whole thing hands down. Instead of being appreciative of the honour and prestige, Clarke was annoyed and claimed that it had been his innovation and not Singer’s. “It was my idea and I deserved to win the total prize,” he grumbled. People were stunned at this reaction, given Singer’s contribution from a research and modelling perspective. “This really showed off his lack of sportsmanship,” said Thompson, “and revealed no appreciation towards his colleagues. It was at this point precisely that my perception of him really became tainted. Singer had devoted much of his time and energy enabling Clarke to implement his idea and had helped him to prove that it could work. I found it astounding that Clarke was quite happy to exclude Singer just because he was undemanding. He wanted to take all the booty for himself without acknowledging his partner at all. This was unacceptable! I tried to explain to him that there was a difference between inventing an idea and making it workable, but he didn’t want to hear me and basically ignored me. It was at this point that I really felt challenged in terms of what was expected and realised that I needed to do something drastic soon. I just knew that whatever I decided would have to be carried through to its end point because I hate making a decision and then revoking it.”

Conclusion Thompson still had a bitter taste in his mouth when remembering this most recent incident as he pored over Clarke’s latest 360° appraisal. He felt unsettled by the vehemence expressed by many of Clarke’s colleagues who clearly did not like him. He could not afford to have demotivated team players. Thompson also felt confused about how to handle Clarke’s performance bonus, which was due soon. He also worried about the promotion promise he had made when first hiring him. Clarke had reminded him about this on several occasions and had expressed his chagrin that it had still not happened. If truth be told, thought Thompson, Clarke was indeed a talented dealmaker and in many ways had adhered to his initial job requirements. It was an unavoidable fact, however, that Clarke had only subscribed to half the “pay-off line” that had characterised RMB throughout all these years: Traditional Values, Innovative Ideas. Although Clarke had proved himself to be a superbly innovative thinker, it was undeniable that he was considerably lacking in traditional values.


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Exhibit 1 Analysis of Total Assets and Percentage Growth for the Top Four Banks in South Africa

TOTAL ASSETS R 000 Total Month End Balances Jun-01 Jun-02 Perc Growth ABSA BANK LTD 179 618 636 208 263 419 15.95% FIRSTRAND BANK LIMITED 152 336 718 198 885 589 30.56% NEDCOR BANK LTD 125 801 777 146 267 460 16.27% THE STANDARD BANK OF S A LTD 159 096 220 196 902 335 23.76%

Source: www.reservebank.co.za, statistical and economical information link (accessed 28 August, 2002).


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Exhibit 2 FirstRand Organogram

Source: www.firstrand.co.za, company profile link, group link (accessed 30 July 2002).


19

Exhibit 3 Rand Merchant Bank Advertisement

Source: RMB public affairs department. This advertisement appeared in Finance Week and the Financial Mail in 2001.


20

Exhibit 4a Financial Mail Survey

Source: Information supplied by Michael Pfaff. Exhibit 4b RMB Advertisement

Source: RMB public affairs department.

FINANCIAL MAIL SURVEY

23.4%

Investec

Intellectual Capability

10.7%

9.6%

RMB

SCMB

Nedcor

Managerial Quality

19.5%

12.1%

6.7%

RMB

SCMB Nedcor

Balance Sheet Capability

19.9%

9.7%

8.3%

SCMB

RMB

In vestec

19.0%

13.1%

7.8%

RMB

SCMB

All Categories Banks


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Exhibit 5 People and Culture Source: Information supplied by Collet Exhibit 6 RMB Advertisement

Source: RMB public affairs department. This advertisement was used as a recruitment tool in the Business Day, 2001.

PEOPLE

CULTURE


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Exhibit 7a Inside Cover of the Book of Rules "At Rand Merchant Bank, we've always been guided by a strong set of values, and because we trust our people to live by those values, we've never needed a book of rules. In our experience, rules and doing merely what is expected of us always seems to lead to sterile thinking and unimaginative solutions. We believe in traditional values and are strongly guided by good corporate governance. But we thrive on innovation, complexity and change. We respect the spirit of our agreements and strive to be leaders in corporate citizenship. We have fun, but at the same time, demand extremely high standards from our colleagues. And everything we do, we do with passion. We attract interesting and intelligent people, big thinkers who are prepared to challenge existing boundaries, and create new ones, to achieve the very best for our clients and our business. These people are our key asset. Providing our clients with imaginative, destiny-changing solutions is what drives us... and that isn't found in any book of rules." Michael Pfaff CEO


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Exhibit 7b Our Value System – Rand Merchant Bank

Like our people, our RMB value system sets us apart. There are eight key values that are critical components of our formula for success. While these values are constantly reinforced, we take care never to stop learning, and where there is room for improvement, positive changes will be implemented. 1. Our people are our key asset

RMB’s driving philosophy is that ‘empowerment breeds success’. Like any great team, performance excellence relies on everyone’s ‘best’ contribution. We take the responsibility of nurturing and growing our human capital very seriously and believe that this commitment, combined with our Bank’s track record of achievement, will continue to ensure that we attract superbly capable people. Ultimately, our ‘key asset’ has to produce great results and we are constantly looking at ways to empower our staff to the point where maximum success is the natural outcome of their efforts.

2. Our reputation is everything

We have built up a reputation over time of which we are extremely proud and it combines with our people to form our greatest strength. How we are perceived by our stakeholders and the general public both now and into the future, will continue to be seen as the highest priority.

3. RMB does the right thing

We are uncompromising on the subject of corporate governance, and we always have, and always will do the right thing in the right way. This ‘traditional’ value does not necessarily present the easiest option and sometimes leads to tough or unpopular decisions. However, it is a sound ethic that will carry us well beyond the challenge of the time.

4. We believe in traditional values

We still believe that a handshake can seal a deal, as our principles recognise the ‘spirit’ and not only the ‘letter’ of the agreement. We clearly adhere to standard business norms in this regard, but above all, believe that honesty and mutual respect are conducive to lasting, win–win relationships and that ‘traditional values’ must be treasured.

5. We strive to be leaders in good corporate citizenship We actively contribute to the transformation of this country by participating in a range of nation-building initiatives. From developing our people and creating a workplace where all staff can enjoy equal opportunities, to committing considerable management resources and funding to Business Against Crime, the Bank strives to be a role model in a selection of areas relating to ‘good corporate citizenship’.


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6. We embrace change Adapting to change and in many cases pre-empting it, has been a Bank strength. Given the fiercely competitive marketplace of financial services, which has rapidly taken on global status, change has in fact become a constant. Positioned in the marketplace as ‘paradigm pioneers’, our ability to manage change and capitalise on the opportunities it presents, will determine our success into the future. Embracing change takes courage, but knowing your company is culturally comfortable with it, makes it easier to tackle.

7. We demand first league performance

As a relatively small, but strategically focussed Bank competing in the big league, we cannot afford to tolerate mediocrity. Our business thrives on having the know-how to provide unique solutions to complex needs, making a high degree of teamwork vital. To deliver this demanding level of specialist service, we need to remember that a first league performance is expected from every RMB player in every aspect of his/her work.

8. Everything we do, we do with passion

We subscribe to hard work and good fun and we respect creative people who add value to life with their enthusiastic input. While we are confident that Rand Merchant Bank can give you the career satisfaction that you seek, we are also acutely aware of the vital balance required between your working life and your family commitments. However, we remain convinced that a high level of excitement in a happy work environment will ultimately release more positive energy in every respect that it saps.

Guiding Principles • We respect the spirit of our agreements. • We believe in innovation based on traditional values. • We strive to be good corporate citizens. • We thrive on complexity and change. • We demand and get high standards. • We work with passion – and have fun. Source: Induction manual: RMB public affairs department.


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Exhibit 7c RMB Value System

Trustworthiness

Respect and support for unique contribution

Intellectual honesty / Share information

Empowerment

Intolerance of mediocrity

Commitment to Strategy

Wealth Creation

Value System

Source: Taken from Collet’s Presentation. This particular slide was prepared by Rabbi David Lapin


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Exhibit 8 Aviator – A 360°°°° Assessment Tool

Emotional intelligence (EQ) refers to the capacity for recognising our own feelings and those of

others, for motivating ourselves, and for managing emotions well in ourselves and in our relationships

–Daniel Goleman, 1999 The Aviator 360° assessment is an evaluation system that enables the company to obtain multiple perspectives on an individual’s performance and development. It is designed to be used by an individual, his/her manager, peers, subordinates and clients. Each individual reviews him/herself and is reviewed by other work colleagues at the same time (ie: Superior, Peers, Subordinates and Internal and External customers). At the same time, the individual is given an opportunity to review his/her colleagues. The goal of aviator is to highlight positive and negative issues and to use this knowledge to focus on and improve individual performance and development. How it works The evaluator is presented with a screen on the computer that is divided into several sections. The left hand side of the screen is the performance rating scale that is divided into six bands with a selection of words that help each evaluator rate the evaluatee, eg: • Best of the best; • Exceeds expectation; • Above expectation; • Below expectation; • Poor performance; or • Needs immediate help.

The evaluator is presented with a list of different criteria, each of which is rated according to the six-band scale. Each band is worth a certain percentage. Upon completion of the evaluation, all evaluations (from all evaluators) per criterion, are taken into account and a final percentage is


27

obtained. This is then plotted onto a line graph. The objective is to avoid any great disparity between different evaluations. For example, if the average of Clarke’s rating is 43% for “motivating other” and his own evaluation of himself on that criterion is 90% then we know that there is a problem. Comments are also made with regard to each criterion. Bruce Clarke’s Aviator evaluation report follows: An Example of One Set of Comments Used in Clarke’s 360 °Evaluation Process49

Cluster Criterion Comment Relationship

Personal (Skill & Attitude)

Knowledge & Skill.

He is skilful in his area, but does not know everything even though he thinks he does. He does not realise that many of the deals need to be worked on in multi disciplinary teams where everybody can add their specific expertise. I think that it is to the detriment of the client that he wants to work on deals alone.

Peer


Knowledge & Skill.

I have very good selling and marketing skills and have made a big difference with several clients.

Self


Knowledge & Skill.

Bruce has aggressive selling skills, is a dynamic dealmaker and makes it difficult for the clients to say no. He also has a good grasp of clients' funding requirements and what their interests in a potential deal will be.

Superior

Personal (skill & Attitude)

Knowledge & Skill

Clarke seems to be very knowledgeable in his area although he does not seem to feel that it is necessary to acknowledge and/or reward his support staff, who conduct the backroom research.

Subordinate

Personal (Skill & Attitude) Self-insight.

Bruce is completely unaware of the ructions he has created in the team over the past two years.

Peer


I know that I could work on my interpersonal skills, but generally I am very good at what I do and people respect and admire that. I am creative in my pitches with customers. If one approach doesn't work, I try another. I am relentless and unforgiving.

Self

49Some of the Criteria have been excluded.


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An Example of One Set of Comments Used in Clarke’s 360 °Evaluation Process Contd50

Cluster Criterion Comment Relationship


He may need to become more enlightened about his weaknesses, in particular his interpersonal skills. He certainly knows his strengths but that is a good thing because his confidence is what brings in the deals.

Superior


He has delusions of grandeur!

Subordinate


Control of Emotions.

Bruce is not easy to get along with. He needs to work on his interpersonal skills. He often loses his temper and makes junior staff feel terribly inadequate which is unacceptable. People have been shocked by his language and lack of respect on several occasions.

Peer



I sometimes get a little over excited and might overstep a boundary with regard to my colleagues. That is simply because I am passionate about my work and they should understand that. I am extremely creative with clients and people should forgive me for my occasional brusqueness.

Self



Bruce is passionate about his work and channels his aggression appropriately into his pursuit of business. I would not want him to lose his aggression because it fuels his dealmaking ability.

Superior



Bruce exhibits a volatile personality at times, which causes problems. He needs to resist the temptations to react too quickly to an emerging problem. He must learn to treat colleagues with a little more respect.

Subordinate

Interpersonal (Motivating Others)

Empathy.

He sides with the underdog and creates divisiveness in this way. He appears to be empathic but this is purely self-motivated.

Peer


Empathy.

I listen to others. I am generally there for the guys in the team who have a little less power. I help to empower them and to teach them to stand up for their

Self



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needs. Cluster Criterion Comment Relationship


Empathy. He knows his clients well. He has a good grasp of their funding requirements and what their interests in a potential deal will be. He is also open to feedback.

Superior


Empathy.

He is very good at empathising with others for his own advantage. He creates workers and then feeds off their hard work without acknowledging or paying tribute to them.

Subordinate

Impact (Getting Results) Adds Value.

Although Bruce has created a lot of business, he has also created ructions in the team and has thereby broken down the team spirit.

Peer


I have introduced the team to many new contracts.

Self


Bruce is very good at closing deals. He is a self-starter and I like his drive. He knows his type of business better than anyone who has ever worked on the job.

Superior


He often delves into domains that are not his own in which his levels of expertise are not as good. I therefore cannot imagine that his work is of such a high quality.

Subordinate


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An Example of One Set of Comments Used in Clarke’s 360 °Evaluation Process51

Comment Relationship Less of: I would like Bruce to try and avoid missing my weekly meeting. This breaks down the morale in the team and excludes him from very important discussions for which he needs to be present. He should also avoid edging into other people's domains when it comes to making deals. More of: I would like Bruce to focus on sticking to the Company practices. Continue doing: Bruce should continue to contribute in the way that he has up until now in terms of bringing exciting new business to the team.

Superior

Less of: Bruce should try to reduce his incitement of the younger generation. This need to create breakaway teams just creates havoc for everybody else. More of: He should definitely place his deals on a common list for all to see and should work towards more teamwork. Continue doing: Bruce should continue procuring difficult deals and designing creative debt instruments. He is very talented in that area.

Peer

Less of: More of: I would like to work on my interpersonal skills which I have heard are not up to scratch. Continue doing: I would like to continue generating the huge profits that I do.

Self

Less of: He should learn that there is a time and a place to be candid. He should learn to process some of his thoughts before he expresses them in words. More of: He should reward his support staff for helping him with his deals. Continue doing:

Subordinate



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Clarke’s Line Graph

Source: Aviator training manual, courtesy of Creative Management Technologies. Aviator Appraisal Software was purchased from John Raddall at Quanta EMC (Energy Management Consultants).


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Exhibit 9 Mug received by each employee the day after winning the Best Company to Work For Competition

Source: Queen’s gift to every member of staff on winning Best Company to Work For in 2000. Exhibit 10 RMB Advertisement – Result of Coming Top of the Financial Services Sector in the Deloitte and Touche Best Company to Work For Competition

Source: Business Times, 2001


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Exhibit 11 Charity Drives Advertisement that appeared in the Sunday Times

Source: Sunday Times, Business Times, 23 June 2002. In July 2001, the “knit-a-lappie” club was formed. This entailed the knitting of blankets for abandoned babies and old people. In order to include the men in this project, a knit-a-thon was organised so that the men could participate in true RMB style. For merchant bankers, the concept of raising money on a cash per row sponsorship basis, sounded like a good deal. On the 16th August, forty men across the bank dedicated half an hour to knitting in the canteen with cheering bystanders. The result was R34 000.00 that was raised from staff alone for distribution to a range of worthy causes. This knitting project has been accompanied by three bottle projects over the past two years. On each occasion, plastic bottles were distributed to employees with the request to fill them with something useful for charity. The bottle projects have also been a resounding success and have raised abundant funds for the SPCA, old aged homes and schools in Alexandra township. The “Teddy Bear project”, which involved the making and auctioning of 200 Teddy Bears, raised R20 000 which was donated to the Teddy Bear Clinic, an institution that supports abused children.

bruce clarke at rand merchant bank - rija...

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