CFO Etienne le Roux’s simplified approach to Metropolitan Retail’s “Reset and Grow” strategy

Having grown up on a farm in Villiersdorp, Etienne tries to take a very pragmatic approach to his work.

Etienne le Roux joined Metropolitan straight after university as an actuarial analyst. Since then, he has seen the company grow and change significantly. By the time he took on the role of CFO of Metropolitan Retail in 2018, he had risen to head corporate actuarial. When he stepped into the CFO role at Metropolitan Retail in 2018, the Group had just started its “Reset and Grow” journey, which included taking its processes digital.

“Metropolitan Retail had its own objectives within the group ‘Reset and Grow’ strategy, which included stabilising the sales force, upgrading branch infrastructure, migrating legacy systems, improving productivity and customer value propositions, as well as improving sales and services efficiencies,” he explains.

Etienne’s first observation of the business at the time was that “it felt like we were on a hamster wheel, trying to do everything at once and not focusing our attention on what will really turn the dial”.

He explains that he grew up on an apple, pear and naartjie farm in Villiersdorp where everything was very simple. “My grandfather was always a very pragmatic person and I try to think like him – trying to understand the context of a problem instead of forcing complicated theoretical or academic answers on problems. In our market, we come up with western solutions to problems, but that doesn’t work in the realities of a rural town in South-Africa.”

He adds that, in his first year as CFO, he went to a lot of Metropolitan Retail’s branches and tried to understand what each of them needed. “I love solving puzzles – breaking them up into smaller pieces and then bringing them together.”

With this in mind, he partnered with his colleagues to simplify the strategy and to identify the key focus areas of the strategy that would result in the most impact on the business.

He explains that sales and distribution are key drivers in the business, so the finance team set their focus on the strategic objective of stabilising the sales force first. “At that time, you would get a sales report on Monday morning of what happened in the previous week. It was very retrospective and little could be done to address any challenges. So, we spent a lot of time thinking about what we could do to change the reporting methods to be real-time in a way that changes behaviour.”

Etienne and his team rejigged the KPI focus areas, identifying the five things we wanted the business to do and then converting them into real-time KPIs. This helped them develop a report called daily cadence to help the distribution team to identify areas to focus on to improve performance in real-time. “After that we moved to figuring out how we could enable our channel to do scenario type modelling,” he adds. “We also set up a predictive KPI and bonus model to enable the distribution teams to understand the financial outcomes if they meet or exceed the targets.”

He adds that Metropolitan introduced a “minimum acceptable standards” concept across the adviser and sales levels. “The concept of minimum acceptable standards incorporated the levers of success in our business broken down in terms that an adviser understands in his daily activities. Minimum acceptable standards are firstly introduced when an adviser joins in training, and secondly, as a KPI measure of branch and sales managers – because they are simple to grasp, we get the focus to drive the right behaviours.”

Sometimes the simple, small things matter in recognition. Etienne designed a wooden trophy which was awarded to the best performing general manager in terms of minimum acceptable standards. Each quarter the different provincial GMs would work hard to be awarded this trophy, and in this simple way, this contributed to the business performing better each quarter as they competed to improve.

It could have been very different
Etienne explains that, had Metropolitan not taken its processes digital during the Reset and Grow strategy journey, the impact of Covid-19 could have resulted in an entirely different outcome. “When Covid-19 hit, it forced us to adopt digital processes a lot quicker than our strategic journey had initially outlined. Luckily, we had already started equipping the business for a digital transformation in order to roll out the new strategy. If we hadn’t been digitally equipped, we wouldn't have been able to sell to clients virtually and our agents wouldn’t have been able to earn any income.”

He adds that “a big leap we took during the pandemic was going fully digital in the training of our advisers” and admits that he was one of the biggest naysayers because it was something that had always been said to be impossible. However, the learning and development team pushed through and now they’re having greater success with digital training than they saw with face-to-face training – with the added benefits of cost savings.

The enablement of advisers was done through digitising the enrolment processes and providing them with leads to service clients’ needs. “During strict lockdown we needed to reassess our sales targets to be realistic and had monthly agile target setting as we learned. This then led to behavioural impacts that supported good performance as the teams felt the targets were realistic, yet stretched, while incentives still applied. The agile approach to target setting helped the distribution channels focus and execute with discipline.”

Executing with discipline, together
Etienne also believes the diversity of Metropolitan’s team played an important role in navigating the impact of the pandemic. “The Metropolitan executive team has members who are 35 and younger, a couple are in their 40s and a couple are older than 50, all different genders and races. This diversity, with the power of pulling together, is a key thing that makes us successful.”

He explains that having these different perspectives has also helped Metropolitan come up with different ideas and helped the company push its risk appetite within bounds. “One example would be where younger members would come up with ideas that push the boundaries, and the more experienced members would explain some past learnings to help us navigate to a better outcome. The key is to come up with executable plans so we can have clear focus and simple measures in place to measure outcomes.”

Sleepless nights
What keeps Etienne up at night is the business thinking it has arrived, when it’s only turned the corner. “We need to keep the energy and keep pushing forward to achieve all we can be if we fully embrace the power of the collective diversity of our business.”

The company is also in the process of building Metropolitan Get UP, which is an end-to-end digital business aimed at younger consumers – or more digitally native people. “There’s a lot that we still need to learn and master, and we need to make sure that we are balancing the investment into this initiative in a way that it will unlock value,” Etienne says.

However difficult it may be, it is crucial for the business, he believes. “A lot of fintech and insuretech companies are rising and insurers need to reinvent themselves, so they don’t get left behind. We need to move with the times and be relevant to our consumers from a technology point of view. So, we need to balance our legacy with the opportunities that technology is creating.”

As part of this, Etienne believes insurers need to rethink product concepts that are over 20 years old and also products that are relevant to the communities we serve. “For example, young people are not always confronted with death, they are only concerned about living their best lives now. So, we need to reframe our products and marketing approach to speak to these consumers, instead of hoping to sell a product based on the fear of dying.”

A love for carpentry
Etienne’s grandfather taught him carpentry at a young age. “We did carpentry for our farm workers. My grandfather would buy the wood and we would make furniture that we then sold to our workers for cheap prices,” he explains. “This taught me the value of not living for oneself but serving the community around you. That is why working for Metropolitan is so fulfilling, as it’s focused on having an impact in the communities we serve,” Etienne says.

As he grew up, Etienne continued the hobby and now has a small carpentry workshop in his backyard.

He adds that he also enjoys the problem-solving that comes with carpentry. “You start with a concept, put it down into a sketch, and then you have to figure out what the dimensions are and how you are going to put everything together.”

And while he says most of his time in the workshop is spent on making toys for his four children, all of whom are under the age of six, he does still make furniture for his house at times. “I often tell my wife that we should start our own company, making and selling kids’ toys.”

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