Afrimat CFO Pieter de Wit: Strategy and emotion are key to a company’s success
CFO Pieter de Wit sees the value of soft skills in contributing to a company’s success.
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Afrimat CFO Pieter de Wit had the unexpected opportunity to implement learnings from the Strategic Financial Leadership course at Stanford University just a few months after completing his studies – surprisingly due to the Covid-19 pandemic that continues to challenge companies and countries.
Pieter completed his MBA through the Stellenbosch University a few years ago. It focused on different models and how to build competitive advantage in the industry and business. He said that the shift in the Stanford course was that it focused more on how strategy evolves over time. “I remember one of the professors said that we are very good at rationalising strategy with hindsight but bad at predicting the future.”
“The reality is that we don’t know the future and there are broad ranks within which a company can play. Companies are not always exactly sure where they’re heading and what’s going to happen next. Covid-19 is a good example of this concept. No one saw the [economic] shutdowns coming or anticipated the resultant loss of income.”
Thanks to his recent studies, Pieter has learnt to shift his mindset, becoming comfortable with being flexible and innovative and moulding the strategy of the business to try different things to go with the market direction.
“Some things might work and some things don’t and with Covid-19 it is the same. We can’t be stuck in the same way of doing things as that might have a detrimental effect on our business. We have to adapt and try new things,” he said.
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Optimising the down cycle
On a tangible level, this approach has paid off for Pieter and Afrimat. “Our strategy is to supply materials. The construction sector is cyclical by nature – there are new projects and then those die down. Then we have to ask ourselves what can we do to utilise the core competencies during the down cycles,” he explained.
He said that answer springboarded off their diversification strategy. “We started to look at other types of minerals and commodities and to consider supplying different industries. We added the industrial minerals sector to the business. The industrial sector has a different cycle, with longer term agreements with steel manufacturers and more consistent volumes.”
By adding the commodities, Afrimat was also then able to diversify from the South African economic cycle and tap into business in other countries. This approach, according to Pieter, also stood the company in good stead during Covid-19.
“Iron ore products are sold in dollars. At the height of Covid-19, while the construction material business was at a standstill, the iron ore part of the business received approval from the government to start a week after full Level 5 lockdown, with certain provisions in place,” he said. “That allowed us to pay all our employees during the hard lockdown period – and that’s the type of thinking that helps the Afrimat group.”
Pieter is also passionate about another big learning from the Stanford course – the human or emotional aspect of business. “There’s always emotions and neuroscience and bias in our decisions. There’s more to a CFO role than just figures, finance and strategy. We spend a lot of time on the human element of decision making, where there’s a lot of emotion,” he said.
The people factor
The human element of decision-making is the reason that Pieter believes soft skills should be incorporated into a CA’s learning and development path. “My advice to my younger self would be to start working on the softer skills a lot earlier. When you start with the CA route, you are taught a lot of technical skills. It’s accounting and auditing, either the accounts balance or they don’t. What we are not taught at university level is how to work with people,” he noted, adding that working effectively with people is one of the most important attributes to the success of a business.
“If you go into a CFO role, you are reliant on a team of people. I can’t do all the work in our company. For my success, the more I help my team, the more I will benefit. This was probably my biggest lesson through Stanford – it all revolves around emotion – to focus on the people around me,” Pieter said.
It was only later in his career that Pieter realised progress is quicker when you can take stones and hurdles out of customers or colleague’s way. “That makes life easier. You are more successful and people trust you. Progressing in your career and life is all about emotions and how to respond with emotion,” he affirmed.
It’s not dissimilar to sport, according to Pieter, who refers to the book Legacy that focuses on the All-Blacks rugby team. “They want to leave a legacy and their whole team environment is based on the concept that no-one is more important than the team. They would rather pick the second-best player who understands his role in the team rather than the best player who has an ego and doesn’t get the team ethos,” he recalled.