A senior telecom executive recently confided in me that no amount of money would entice her to join Cell C. When I inquired why this was so, I was somewhat taken aback by the answer: “That would be career suicide.”
The senior executive said the environment at Cell C was not conducive for anyone who had never worked at rival Vodacom.
“Since 2012, when Alan Knott-Craig became CEO, Cell C has only hired former Vodacom executives ... Nothing has changed since then.”
She described the work environment at Cell C as a “mini-Vodacom”, which any independent-minded “outsider” would find difficult to adapt to.
This conversation was prompted by Cell C’s recent hiring of former Vodacom executive Chris Lazarus, who was appointed chief officer of sales, distribution & regions. Lazarus reports to CEO Jorge Mendes, another Vodacom alumnus.
This trend of Cell C hiring executives from Vodacom started with Knott-Craig, who was followed by Jose dos Santos and Douglas Craigie Stevenson.
The only CEOs hired by Cell C who were not from Vodacom were Lars Reichelt (March 2009 to July 2011), Jeffrey Hedberg (May 2006 to March 2009) and founding CEO Talaat El Lahham (2001 to May 2006). El Lahham was the CEO when the Cell C was launched in SA in May 2006.
However, the current CEO continues to aggressively recruit senior staff from Vodacom. Mendes has hired former Vodacom executives Darius Badenhorst, Melanie Forbes and Rachael Ayo-Oladejo.
What is surprising is the absence of any restraint of trade at Vodacom for employees who want to leave to join Cell C. In 2018 Vodacom invoked a restraint of trade against employees who wanted to move to rival MTN. The absence of such restraint for employees leaving to join Cell C has raised speculation about the relationship between the two “rival” companies.
There’s a humorous suggestion circulating among industry insiders that Cell C might as well be considered an indirect subsidiary of Vodacom, despite being primarily owned by Blue Label Telecoms, a company listed on the JSE.
When recruiting skilled staff, Cell C fishes in one pond: Vodacom. But the recruitment strategy has not worked well for Cell C, which is still struggling to perform optimally and to compete aggressively in the telecom space.
The “talent” recruited from Vodacom since 2012 has not turned around Cell C’s fortunes. In that regard, Cell C needs to answer tough questions.
While former Vodacom executives may bring valuable connections to the industry, their networks seem limited and may have inadvertently prevented Cell C from building new partnerships and collaborations.
I think the exclusive hiring of former Vodacom executives stands in the way of intellectual diversity. Recruiting executives from one competitor can lead to a lack of intellectual diversity within the leadership team. This can limit creativity and problem-solving ability.
The fact that only Vodacom executives have been hired over the past 12 years may have resulted in the replication of strategies and practices already in place at the Vodafone-controlled company, rather than fostering innovation and differentiation at Cell C. This may have limited Cell C’s ability to compete.
Cell C most likely suffers from cultural homogeneity — meaning that former Vodacom executives it hired share similar values, working styles and approaches to business. While this can promote cohesion, it can also lead to groupthink and a reluctance to adopt alternative views.
It is also possible that Cell C suffers from the risk of stagnation. Relying too much on Vodacom’s talent may have led to a stagnant corporate culture and a reluctance to change. This can be detrimental in fast-moving industries, such as telecoms, where agility and adaptability are key to success.
I also suspect that Cell C has lost its identity and differentiation in the telecom space.
Given this background, the question is: how can Cell C differentiate itself from its competitors and attract top talent or customers?
I believe Cell C should take a balanced approach to hiring executives, actively seeking candidates from diverse backgrounds and industries, while emphasising internal talent development and fostering a culture of inclusion and innovation to avoid these pitfalls.
While Vodacom has produced exceptional talent, Cell C needs to rethink its hiring strategy to ensure long-term resilience and differentiation in the market.
• Lourie is editor and founder of Tech Financials.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.