Special Report Podcast: Asher Bohbot – CEO, EOH
ALEC HOGG: It’s Tuesday November 15 2011 and in this Boardroom Talk special podcast, Asher Bohbot, joins us, he’s the chief executive of EOH, a company that’s been making a lot of waves lately, not least the shares which have been rocketing up over the past few years on a 40% annual compound growth rate. We’ll get to that in a moment though but the reason we asked Asher to talk with us today is his latest accolade, the IT Personality of the Year for 2011. Do you put much store by these kind of awards, Asher?
ASHER BOHBOT: Awards, you’ve got to look at it with a pinch of salt and have some humility behind it. It’s really a recognition of EOH, per say, I’m only representing EOH. So that’s how we’d like to look at it and it’s a nice recognition of our company and what we’ve done in the last 13 years.
ALEC HOGG: But increasingly you’re becoming more and more in the spotlight now, are you comfortable there?
ASHER BOHBOT: Look, it comes with the territory, if you grow the business and the business is successful, doing well, more customers, more people, then more people will know about us and it’s probably good for business.
ALEC HOGG: You’ve got to be the most famous Moroccan-born person in South Africa. Interesting to notice that you were born in such an exotic location, what’s that background?
ASHER BOHBOT: I don’t remember much of it, I convinced my parents to leave the country when I was two years old. So, yes, I don’t have much recollection…
ALEC HOGG: So, your parents were in Morocco at the time?
ASHER BOHBOT: Yes.
ALEC HOGG: Not Moroccan?
ASHER BOHBOT: No, I was born obviously in Morocco and my parents moved out of Morocco when I was two years old. But I went to visit there, funnily enough, a while back and visit and see where I was born, etcetera, and it was exotic and interesting.
ALEC HOGG: Asher, I was interested to notice as well that you came to South Africa in 1980 and after a very short period at AECI, you were with PG Bison for a long time, were you part of the management buyout there?
ASHER BOHBOT: No, I was there for 17 years or so and I left just before the management buyout. So, they were obviously waiting for me to leave.
ALEC HOGG: [Laughing] And that decision, was that to start EOH?
ASHER BOHBOT: Yes, the decision was to start EOH. There was no issue there and, in fact, PG Bison became the first customer of EOH.
ALEC HOGG: So, they eased you into it, almost, by being the first customer?
ASHER BOHBOT: Yes, we really appreciate that they gave us the break and trusted us to look after them and yes, it was the beginning of EOH.
ALEC HOGG: Still a client today?
ASHER BOHBOT: Yes, very good client, we support them, very close to them and yes, we do just about everything for them in our field.
ALEC HOGG: It’s an interesting transition there to spend 17 years at a company, there are not many people who would do that and then go on their entrepreneurial path on their own. What was it that motivated you?
ASHER BOHBOT: By the way, I don’t believe that the concept of entrepreneurialship belongs to somebody operating from a garage, as opposed from a corporate. Our view in EOH is that if you’ve got a strong organisation behind you, the resources, the finance, the brand, etcetera, you can be even a greater entrepreneur in achieving what it is that you want to do, compared to operating from a garage. So, I would like to think that I haven’t changed and hopefully I was an entrepreneur for the company I worked for before stating EOH.
ALEC HOGG: And are you helping others within EOH to develop in the same way?
ASHER BOHBOT: Yes, I think the whole business model of EOH, the philosophy, the approach is an entrepreneurial nature. Everything that we do in the business takes it into consideration. The way we are structured, the way we measure, the way we reward people, the way we call people, the titles we give people, all revolve around giving people the responsibility. The truth is that when you give people, good people, and that’s obviously a big aspect of our philosophy, if you’ve got great people in the business and you give them the responsibility, the vast majority of people respond well and deliver well to this approach. It’s a fallacy that you’ve got to monitor and control. When you give good people the space, they usually reward you with it. That’s our philosophy in the business.
ALEC HOGG: Sounds very much like Ricardo Semler or a Lars Kolind, that kind of approach, very different to the old hierarchical structures.
ASHER BOHBOT: Oh yes, we’ve got the business we’d like, at one stage I had 40 people reporting to me and it worked. It’s not about reporting structures and hierarchies, etcetera. But adding to it, I think it will only work if your entire philosophy, approach and culture of the business is focused on people. How people feel, what people want, how they are driven, how they are motivated, what are their needs. If you fulfil people’s needs in your organisation, it is a strong likelihood that you’ll fulfil the needs of the rest of the stakeholders. We see it very clearly at EOH. It doesn’t sound nice but we put ourselves, the people in EOH, on top of the list of the stakeholders’ agenda and it’s good for the rest of the stakeholders.
ALEC HOGG: Talking about stakeholders, your job creation project that we chatted about, when we spoke in September, have you managed to move that along a little?
ASHER BOHBOT: Yes, in fact, it was actually very interesting, we just sort of put it up, we had our annual party for our customers, I think in September, and we mentioned the initiative there. I must tell you, the response we got out of our customers, the number of emails I got. It was on a Saturday night and on Monday morning I got lots of emails from lots of customers, some of them are very, very large enterprises and there is tremendous willingness by both our customers and also, which is very nice, is from our large technology partners in the country, the multi-nationals in the technology world. They want to do things, we’ve got customers, we’ve got some banks that are starting to think about their offshoring philosophies, jobs that maybe went away elsewhere and they are thinking about bringing them. In fact, they’re even thinking of bringing jobs from the, call it sister companies, to try and bring them into South Africa. I think that if business is aware of the responsibility for job creation, there is so much that can be done and forget us, forget EOH, I think if you ask me what’s the achievement in talking about it, you’re just creating the awareness amongst our customers. We will stay, we will keep it, we’ll have people that talk about it, we’ll in our six monthly report we will communicate what’s happening with this initiative. But the biggest thing is just creating the awareness, amongst business people, that we have got a major responsibility to think of creating jobs, frankly, creating our customer base. Everybody who is employed is definitely going to be a customer of a bank, of a food chain or any other business out there. I think the government in this aspect is actually doing well in trying to do things but we all know they can’t do it alone; business must carry the bulk of the responsibility.
ALEC HOGG: Have you had much feedback on this from government?
ASHER BOHBOT: Yes, I think the exciting side on it from government is that government has got a lot of initiatives for job creation and as such we’re suggesting and we’re talking to them, we can help facilitate the process of creating those jobs. Not that we will create the jobs but helping in mobilising. Often South Africa suffers with this aspect in quite a few areas that the money is not the obstacle, it’s execution, it’s taking the funds, putting the mechanism, the systems, the project management around executing job creation. So, there is enough funds around to create it and we are involved with some and probably, what I wish is that government will publish it more to say, hey, that’s what we’re doing here, those are the funds for there and get business to play a role in it. So, there is enough happening.
ALEC HOGG: It’s good news to hear on that. As far as specifically with EOH and your shareholders, who’ve seen a 60% uplift in the share price in the last year, they can’t be too unhappy but doesn’t this worry though, the high rating that you’ve been afforded by the stock market?
ASHER BOHBOT: Look, obviously with ratings and high rating and publicity and expectation gets raised. But on a practical side, we are on a, probably a historical PE of 12, I think that’s the number, around12, which is lower than many, many other players. So, our rating from a PE point of view is pretty much on average and we haven’t been catching up but the business is solid, the business is strong and we’re confident about what we’re doing in the future. Whether it’s going to be 40% or 20% or 30%, obviously we’re not in charge or in control of everything in life. We’re in control of some variables but those that we can control probably will deliver something between those numbers in the range.
ALEC HOGG: Asher, it’s quite sad and I’m sure I’m sure you’d agree with this that we don’t have much of an IT sector, listed IT sector, on the Johannesburg Stock Exchange anymore. Many of the companies that listed around about the time you did are no more or they’ve disappeared off the list. Of course, Dimension Data that was the big daddy of the sector is gone as well. Why do you think it is that we aren’t growing the IT board on the stock exchange?
ASHER BOHBOT: I think, in fact, there was a discussion with somebody from outside the country, from Africa, today about this subject. It is sad, when people say you are as an IT services company, as opposed to a distribution company, we’ve got the highest market cap and we see ourselves as a small business, with all fairness, relative to world standards and it is sad. Our view is that we need to grow more local IT companies. Our approach, and we discussed it in the last few weeks, is to create actually a Pan African, local African business, as opposed to we all somehow, as we grow, we become a small part of some big international organisation. Frankly, it doesn’t excite us, the people in EOH, to do that. I think there is a lot of unique things that we can do and probably relevant to Africa that maybe a multi-national would not relate well to it, not because of the lack of willingness but just the mindset is not here. So, if we grow a local business and local means African, that’s our approach, we should be very relevant in Africa, development of government processes, service delivery, growing manufacturing, efficient processes in all aspects of business. An organisation like us can add a lot of value to growing the economy in Africa and, frankly, it’s extremely exciting for us.
ALEC HOGG: Asher, you turn 59, I think it is, on Monday?
ASHER BOHBOT: Yes.
ALEC HOGG: Any thoughts yet of throwing in the towel or going off into the sunset or are you going to be like Warren Buffet and still working, still hard at it in 21 years time?
ASHER BOHBOT: Yes, my answer is pretty simple; I have no plans whatsoever to do anything else. A lot of people tell me, don’t you want to rest a bit, etcetera? My typical answer is that when I’m dead I will rest a lot for a long, long time. No plans, as long as I’m enjoying myself, healthy, feeling strong, thinking that I can add value, I’m here. No plans, there isn’t something that I’ve said when I’m going to be x, I’m going to do this or that. Probably the major criteria is that am I enjoying myself and currently I’m doing so.
ALEC HOGG: Asher Bohbot is the chief executive of EOH.
And the term ‘golden years’ banned.