Culture, Governance and Leadership Needed for a Successful Business Turnaround

Address to SALGA Leadership Conference at Valley Lodge & Spa Hotel, Magaliesburg

by Dr Reuel J. Khoza  I  22 October 2025

Honourable Members of SALGA, Organisers of this SALGA Strategy Retreat,

It is both a privilege and a profound responsibility to address you briefly on a matter that sits at the heart of our collective mandate: the transformation of local government into a beacon of excellence, accountability, and sustainable development.

We gather at a time when the challenges facing our municipalities are stark - financial distress, service delivery backlogs, eroded public trust, and institutional fatigue. Yet, within these challenges lie the seeds of renewal. The question is not whether we can turn things around, but whether we are willing to confront the uncomfortable truths and lead with courage, clarity, and conviction.

Culture: The Invisible Engine of Performance

Culture is not a soft issue. It is the hard reality that determines whether strategy succeeds or fails. In too many municipalities, we have allowed a culture of complacency, siloed thinking, and reactive management to take root. This must change.

• We must cultivate a culture of urgency, where every official understands that time is not on our side.
• We must embed a culture of accountability, where performance is measured, celebrated, and corrected without fear or favour.
• We must foster a culture of innovation, where new ideas are not stifled by bureaucracy but accelerated by bold leadership.

Culture eats strategy for breakfast. If we do not shift the mindset, we will not shift the outcomes.

Governance: The Backbone of Credibility

Governance is not a compliance exercise - it is the architecture of trust. Without sound governance, even the most well-intentioned plans collapse under the weight of mismanagement and corruption.

• We must strengthen internal controls, ensuring that procurement, budgeting, and reporting are transparent and auditable.
• We must enforce ethical leadership, where integrity is non-negotiable and consequence management is real.
• We must embrace citizen-centric governance, where communities are not passive recipients but active co-creators of local development.

Good governance is not a destination - it is a daily discipline.

Leadership: The Catalyst for Turnaround

Leadership is not a title - it is a behaviour. In times of crisis, leadership must rise above politics and personal interest to serve the greater good.

• We need adaptive leaders who can navigate complexity and ambiguity with agility.
• We need servant leaders who listen deeply, act decisively, and inspire others to do the same.
• We need visionary leaders who can reimagine the future of local government and mobilise others toward that vision.

Turnaround is not a technical fix - it is a leadership challenge.

The Path Forward: From Survival to Significance

To achieve business turnaround success, SALGA must champion a new paradigm - one that integrates culture, governance, and leadership into a cohesive transformation agenda.

• Let us invest in leadership development at all levels of local government.
• Let us create performance cultures that reward excellence and root out mediocrity.
• Let us build governance ecosystems that are resilient, transparent, and citizen-focused.

This is not the time for incremental change. It is the time for bold, systemic, and irreversible transformation.

A BRIEF ILLUSTRATIVE CASE: THE NEDBANK TURNAROUND
Nedbank Corporate Culture: Before and After 2007

Prior to 2007

• Nedbank's culture was described as fragmented and siloed, with poor internal communication and low employee engagement.
• There was a lack of shared values and strategic alignment, contributing to inefficiencies and a toxic work environment.
• The bank was in financial distress, with headline earnings down 98% in 2003 and a return on equity of just 0.4%.

Post-2007

• A major cultural transformation was initiated under Tom Boardman's leadership, focusing on values alignment, transparency, and collaboration.
• The bank adopted a more inclusive and participatory leadership style, encouraging staff input and cross-functional cooperation.
• Employee surveys showed significant improvements in engagement, trust, and alignment with corporate values.

CLOSING

Let us remember: the future of South Africa does not lie in distant capitals - it lies in the streets, clinics, schools, and communities governed by our municipalities. If we get local government right, we get South Africa right.

Let us lead with courage. Let us govern with integrity. Let us build cultures that deliver.

Thank you.