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Group Chief Executive of Servest SA speaks about his turnaround strategy for South Africa’s leading integrated facilities management company

By 6th March 2019News

The new Group Chief Executive of Servest South Africa is confident that the company can significantly contribute towards strengthening and growing the economy and enhancing genuine efforts towards transformation.

“Our vision is to grow this business, build a strong foundation for sustainable and profitable growth through driving a high-performance culture that is focused on our customers, processes, people and effective execution. We also want to help grow black owned businesses, and in particular, black female owned businesses,” says Xolile Sizani, Group Executive of Servest, speaking just about 120 days as the new Group Executive of what is one of South Africa’s leading integrated facilities management companies, employing about 25 000 people countrywide.

Since joining the company last October, Sizani has been at the helm of identifying business inefficiencies and pinpointing opportunities for revenue growth and improved transformation. “We’ve realised that part of the hindrance to our growth is our cost structure. The rate of increase of our cost is faster than that of our sales, resulting in reduced margins,” he says.

“This means that the company’s growth has not been as profitable as we would like it to be. The strategy is to strengthen our foundation by reducing inefficiencies over the next 18 to 24 months and subsequently eliminate them, in order to really grow the company, profitably and sustainably,” says Sizani.

Servest have identified a large amount of cost savings initiatives in this financial year as well as process efficiencies.

“We believe this will give us an additional growth on top of the current margins that we had budgeted for in this financial year,” he says.

The company is also aiming to improve its BEE status.

“Our plan is to direct sizeable opportunities to black owned businesses and increase our procurement expenditure with black female owned businesses from 12% to 30%, in line with some of our client’s demands. We have set targets to maintain a Level 2 BEE score and improve the score to Level 1 within the next two years,” says Sizani.

Servest SA, which had a substantial shareholding in Servest UK sold its equity in Servest UK to Atalian in 2018. This, ordinarily, would have boosted the company’s bottom line immensely, but a decision was made to offset some of the debt that was used, strategically, to grow the business, and the remainder paid in dividends to the shareholders.

Immediate plans

According to Sizani, the focus  and priorities for Servest SA for 2019 are to:

  • Ensure Servest continues to develop a unique blueprint for integrated solutions that support its customers’ strategic drivers, but also to be identified, by our current and future clients, as a strategic partner.
  • Focus on cost management, standardisation, efficiency and integration within business divisions to drive productivity improvement.
  • Recruit the right leaders, train and develop our people to ensure that they are prepared for the fourth industrial revolution (4IR).
  • Reinforce effective change management and drive transformation and BBBEE.
  • Provide a clear purpose and direction for the organisation through a development and approval of a clear growth strategy.
  • Ensure that good governance and necessary support structures are in place, and that systems and controls are functional, and ensure compliance and risk management.

 Long Term outlook

Sizani says that Servest’s next priorities are to:

  • Drive the implementation of the growth strategy.
  • Introduce additional products and services in line with everchanging customer needs
  • Expand into new geographies, with a focus on expansion into more countries in the continent.
  • Increase procurement expenditure and where possible at client’s request, outsource 30% of major contracts to black owned SMMEs.
  • Target and focus support for black female owned companies.

“The company is committed to being a people driven business. Our people are critical. We want to propel them to become excellent, through skills development, performance measurements and rewards. Succession planning and transformation is at the core of our people excellence agenda and an important driver to our growth agenda,” he says.

With the exponential growth of the 4IR, the company is working towards ensuring that it has a skills-ready workforce.

“We are currently strengthening processes and core skills within the organisation, for our people to be able to make the transition,” says Sizani.

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