The story of you starting Adcorp involves a pretty crooked character who bamboozled you into buying 25% of the shares of Admark, an almost bankrupt company, in 1978. How did you make a success of it?
I managed to persuade the bank that I had a plan to turn the company around if they could provide me with the finance to purchase the other 75% of the company.
The only way out of it was to be completely honest and forthright so I called in every creditor and told them the bad news. I told them that they had two options – one was to put the company into liquidation in which case they would not get much money out. If they chose not to do that, however, I gave them my assurance that not one cent of profitability would go to any shareholder or any member of senior management and neither would they receive increases until every cent of debt had been paid off. It took us about six years to pay it all off.
Adcorp became the first company on the stock exchange to advocate a black empowerment group as its biggest single shareholder in 1994. What was your thinking behind this move?
I believe implicitly that we will be a far better country if we give and don’t wait for people to take what they desperately want and need. When you give you get goodwill. When you wait until things are taken, you get nothing. What it did was give us huge credibility for having done BEE for the right reasons. If you are the first to do it and do it well, you get remembered for it and you get the credit for it
Adcorp started as a recruitment advertising company. Today it has interests in market research, education and training, staffing solutions and support services – why did you expand into so many areas?
Because of something I learnt from Mr Kellogg, who when he launched the first ever cornflakes, realised that the first thing that was going to happen was that someone was going to compete with him. The same was true for this new thing called recruitment advertising that we had introduced to South Africa. So he competed with himself, launching Sugar Pops, Raisin Bran and all the other Kellogg’s brands and that became my philosophy.
And did it work?
Yes, when the market really hit its peak we had very nearly 70% of the total market and the nine other competitors sat with the rest.
What has been your biggest challenge?
Becoming the very first service based company to list on the JSE. I did it by convincing a few people that one, we weren’t trying to get rich quick and two, that if we did what we planned to do the way we wanted to investors would see good returns. We listed in 1986 with a market cap of R5,4 million and in 1999 when I retired, it was over a billion rand.
