CEO Rui Morais leads by listening

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CEO Rui Morais leads by listening

Jul 4, 2024 | Strategy & Leadership

Few occasions test a man’s nerves more than having to pace up and down a cold and dim hospital corridor waiting for his first child to be born. It gets worse when the doctor eventually emerges to advise that the child is stuck in the birth canal.

In 2017 Rui Morais felt fear grip him like a wrench when his wife, Roxanne, went into labour. Thankfully, their daughter Olivia was safely delivered, but it gave the current CFO and CEO designate of the pharmacy chain Dis-Chem first-hand knowledge of the importance of proper health care.

He met Roxanne in 2002, when they were both first-year students at Rand Afrikaans University (today the University of Johannesburg). Their study fields couldn’t be more different – Rui taking up accounting while Roxanne was studying industrial psychology.

Rui matriculated at the age of 17 and in 1995, by the age of 21 had an honours degree in his pocket. He joined EY for articles a year later, where he was assigned to the retail audit division. One of his first audit assignments was for Dis-Chem Pharmacies and he soon got to meet the founders of the company, Ivan and Lynette Saltzman.

He had a regular auditor–client relationship with the couple for several years until the Dis-Chem management team decided to transition to the SAP software system to run their operations. ‘SAP is quite a robust and rigid system created by a German software firm and moving over to the platform presented Dis-Chem with some challenges given that the business has an entrepreneurial culture. Fitting it to an off-the-shelf, standard system was not easy.’

Rui impressed Ivan with his ideas around how to address these issues. ‘That is where the conversation began of me joining the business. I liked his thought processes and the excellent group of partners who had been working with him for a long time already.’

He joined the company’s finance department in 2011. ‘When I walked into Dis-Chem, I was impressed with the way they had differentiated themselves from their competitors as a retail brand and the novelty of the items they stocked.’

Business talk

Rui is thankful for studying accounting and believes it has enabled him to move up the corporate ladder quickly. ‘Finance is the consequence of all commercial decisions,’ he says. ‘Having financial knowledge enables you to participate in discussions that are relevant to business. When you’re young, you don’t have the experience from years of service, so studying something finance related offers a shortcut to senior positions. Experience differentiates operational people, while financial personnel depend on their academic knowledge to get a head start on understanding the mechanics of the business.’

In Dis-Chem, he has found a company that aligns with his personality and aspirations, since he has an entrepreneurial nature that thrives in a fast-growing company. The entity was founded in 1978 when the Saltzmans were newly qualified pharmacists. They introduced the concept of a discount pharmacy with product categories not previously offered in other South African stores.

In March 2022, Dis-Chem launched their own health insurance. ‘The company is joining the rest of the private sector in ensuring that people who cannot rely on the state for healthcare are catered for,’ Rui says. ‘This is a mission that is close to my heart. I have the opportunity of being part of the move towards digital healthcare and a changing healthcare market. We have become more than just a retail pharmacy; our priority is to become a fully fledged health management organisation.’

In an interview with Financial Mail in 2020, Rui was asked what he would do or change if he became president. His answer was that he would try to extract more out of the private sector. ‘We have world-class businesses that have solved complex solutions, and we could use that … for South Africa. We should all be, in some way or form, contributing to a better SA.’[1]

Rui was appointed the pharmacy chain’s CFO in 2012 and one of his most difficult assignments was listing the company on the Johannesburg Stock Exchange four years later. ‘Dealing with the institutional investors and the pressures that they create can lead to many difficult moments,’ he states. ‘They have very high expectations, but I realised you cannot please everyone; that is the nature of the market.

‘Being on a listed exchange means that there is often high liquidity, so people can invest in a stock one day and if they don’t like the direction it is headed in, they sell. When we first

listed, we were quite worried about disappointing people, but we have since come to understand that we have to believe in the story we are writing and accept that not everyone is going to walk with you on that journey.’

Being part of the evolution of the brand has been a great high for Rui. He joined the group when they had less than 20 stores and now they have over 290 outlets, following the acquisition of Baby City and Medicare Health.

Leaders who listen

Rui had a significant role in this growth trajectory and in mid-2021 it was announced that he would be taking over as CEO when Ivan retired. Even though he was only 37 at the time, Rui says he wasn’t daunted by the task of being CEO of a listed entity with a turnover of R26 billion, because he felt he had the necessary support. ‘I have always been younger than others at my level . . . I’ve come to terms with the fact that age need not influence the outcome of what you are trying to do. At Dis-Chem the major shareholders have invested a lot of time to ensure that I have the necessary exposure.’

In Rui’s opinion one of the key qualities a CEO should have is the ability to listen. ‘Ivan always surprised me. Despite how successful he was and the fact that he was much more knowledgeable than others in the business, he truly listened to people’s ideas, even someone like me when I was just 26 with very little commercial experience.’

Ivan inculcated a family culture in the company, particularly at management level where everyone is given a platform to contribute to the strategic intent.

Rui believes a high emotional intelligence outweighs a theoretic understanding of management principles. A good leader identifies people with an inherent ability to influence others and gives them the opportunity to lead. This is regardless of their age, race or gender. In this regard, Rui tries to be as inclusive as possible.

‘Fairness, openness and transparency are important values of a leader. If you demonstrate these, you’ll be able to manage the difficult times and take advantage of the good times. You need to understand the different personalities on your team and you have to know what motivates them, what influences them and also what is going on in their personal lives.

‘A leader is placed in a certain position to make key decisions and must be held accountable for those decisions. Still, that does not mean that they should discount the views of those who disagree with them. Good leadership also entails being able to rationalise a decision to your team and get their buy-in so that everyone pulls together in the chosen direction.’

Leaving a legacy

Part of Dis-Chem’s success has come from benchmarking their strategy against global peers. The company is effectively going down the same road as the British and American markets, where independent pharmacies are consolidating their businesses to form merged entities rather than remain independent of big groups. Dis-Chem is incorporating those principles and making them relevant to the South African market.

The next thing is making sure the executive team is on the same page. When an entity grows as fast as they have in the last 10 years, it’s crucial that employees understand the company strategy and what the business priorities are. With so many things going on, key aspects of the business must be in order and you can’t focus too intensely on the small things, says Rui.

‘This includes keeping the core of the brand intact and service levels high when acquiring other entities. We must ensure that when a customer walks down our aisles, there will always be something that excites them. To do that you need to go to the ground level and experience things the way the customer is experiencing them.

‘In a listed environment, where you face constant pressure to manage costs, it’s easy to forget the customer. But you must be prepared to suffer losses in one or two years as you pursue long-term gain, and have the confidence to make those decisions even under the pressures of the investment community. Gauging the customer experience ensures that there is no disconnect between strategy and execution.’

The journey with Dis-Chem has led to many long nights and weekends in the office for Rui, who says he would love to see the company become the biggest retail pharmacy in South Africa. While his career is fulfilling and challenging, family life is equally important to him. Four years after Olivia was born, he and Roxanne had another daughter, called Rafaela, which means ‘God is our healer’.

‘I wish for my girls grow up in a stable, loving environment like the one my brother and I grew up in. I hope to raise them to understand the dynamics of South Africa and the many opportunities this country has. My life’s motto is to try and leave the world in a better state than I found it; I hope to instil the same yearning in my kids.’

This article is a brief extract from the book THE CEO X FACTOR – Secrets for Success from South Africa’s Top Money Makers – available here




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