Johann's golden rule - bad news by fax, ...

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Johann's golden rule - bad news by fax, good news by post

'I fly one hour and forty minutes a day on average. The shame is you don't see your wife and kids'

REMBRANDT Group chairman Johann Rupert, judged by his peers and competitors as the Business Times Top Businessman of the Year, attributes much of his success in running the Rembrandt and Richemont groups to a few basic rules he insists his top management adhere to.

Bad news by fax, good news by surface mail, is one of the golden rules he has instilled in his company managers.

"With 100 000 colleagues, this doesn't always make for a great working day. When I walk into the office in the morning I can be greeted by a pile of bad news. But while I was running Rand Merchant Bank, I learnt that most problems can be corrected if you discover them early enough," says Rupert.

Another basic rule he strives to achieve is to find the right person to run the right business.

"You can't really be an executive chairman of two companies the size of Rembrandt and Richemont, so you rely heavily on the people running the various businesses."

Rupert believes his key role is in the product committees for branded goods.

"That is where the future of the business is determined and that is where I like to see the previous, current and future executives of the business. My main input into Rembrandt, Richemont, and the other businesses is taking part in the decision-making processes at the product committees.

"I have a fantastic array of colleagues, many of them young and bright with sparkle and effervescence. In businesses the size of Rembrandt and Richemont you are not always lucky enough to get to know all your colleagues, but a key challenge for me is to find the right person to run a particular business."

Once found and put in place, they then have to be kept motivated to carry on the good work.

With more wealth, power, and business success than many would even hope for, how does Rupert motivate himself?

Does he run his businesses and a punishing international schedule of board meetings to satisfy his own money-making ambitions or out of respect for his famous father and legendary deal-maker, Anton Rupert?

"Money, of course, is important. It gives you freedom of time if you choose it. The problem is when I couldn't afford a Ferrari, I could have driven it anywhere. Now I can afford one, I cannot really afford to be seen in it," he laughs.

"But in business I am driven by a very competitive instinct. I think it was developed playing sports at school. Its not that I like to win so much, but I really hate to lose. It is that dread of losing a deal, or not being able to turn a company around, that motivates me more than anything in my business life."

However, Rupert says the "real pleasures" he derives from the business are the letters he receives from shareholders.

"Every year I receive five or six letters from shareholders who trusted my father with their capital. The stories they tell are often very touching. I remember one letter where a shareholder had been able to put his children through university on the dividends he received, and confessed that without them he would not have been able to give them a university education. That gives me great satisfaction."

But running businesses the size of Rembrandt and an overseas empire like Richemont, started by Anton Rupert in 1955 with a loan from Sanlam of R1,5-million and now worth several billion, demands a punishing schedule.

Rupert flies more than 700 hours a year, mostly in the company executive jet, which is more than qualified pilots are allowed to fly. "I fly on average one hour and forty minutes a day, every day. The only real shame is you don't see your wife and kids as much as you would like to."

Last week Rupert had meetings in Hamburg, Paris and London, before flying to Zurich and back to Paris again, then back to South Africa for a Rembrandt board meeting on Friday morning.

But the recent advent of on-camera conference facilities through a dedicated digital phone line should enable Rupert to cut down on travelling.

At his Cape Dutch homestead in Somerset West, Rupert can conduct a Rothmans International board meeting from his study.

A camera and microphone allows the other Rothmans board members to see him, and similar equipment allows Rupert to talk to his board.

"It is the most wonderful invention and should allow me to cut out some of the travelling. Now I can attend a board meeting in another country without leaving my own home," says Rupert.

He says the idea is not new, but the costs were previously prohibitive. On the business front, a major challenge is to turn Rainbow Chicken around from disastrous losses.

A R750-million cash injection to Rainbow's balance sheet, most of it put up by Rembrandt, will work wonders for Rainbow's crippling finance costs, but some market analysts doubt that Rainbow will ever come right.

"The buck for Rainbow Chicken stops at Stellenbosch and right here at this chair. One of the things we decided at the beginning of the year was to sort out Rainbow Chicken and this we are doing.

"We have found a dynamic executive, Jorge del Corral, who has a wealth of international experience in the poultry business, to run Rainbow and we are giving him our full management support and focus."

He believes the Nethold deal with French pay-TV group Canal Plus will go through, giving Richemont a "meaningful stake in a pay-TV group with 8,5-million subscribers now, and between 10-and 11-million in three years, making it bigger than B-Sky-B."

Financing Nethold's expansion is proving increasingly difficult and the prospect of having to finance the pay-TV company's advance into Italy presented Richemont with the prospect of coughing up "billions of dollars". It was a commitment Rupert did not relish.

"I don't take risks with shareholders' funds. Interestingly, Dr Nikolaus Senn, a leading Swiss banker who is chairman of Richemont, said to me afterwards: 'You are even more conservative than your father.' "

And the recent row with Dr Zuma over cigarette advertising where Rupert made some rare public statements?

"I have had some frank discussions with Dr Zuma and I believe what happened is now behind us." Rupert is well connected with the current government and often seems to act as an unofficial adviser to black business leaders.

"I have very frank and friendly relationships with people like Cyril Ramaphosa and Thabo Mbeki. I like them and if they ask for my business advice I am happy to give it. Black economic empowerment must happen in South Africa and must be made to work. But it is important for their self-respect that the new black groups are able to contribute to their new economic wealth by using their own expertise." Top of page