“The most unsettling thing for anyone is uncertainty,” says Graham McGregor, CFO of New GX Capital Holdings, a BEE investment holding company with interests in the environmental solutions, logistics, power and telecoms, and corporate finance advisory sectors. Sharing his experience, while in his previous position, of a merger that happened between two very different businesses under one umbrella company McGregor says keeping staff abreast of what was happening at all times was crucial: “Because if there’s a communication gap, people fill in the gap themselves.” He also learnt an important lesson:
"As much as something might be an operational imperative, it's important to balance it with a strategic imperative. You have to ask whether it actually makes sense in context of the longer-term strategy."
Tell us about your current role and responsibilities.
"New GX Capital Holdings was founded ten years ago and has a diversified business in terms of the sectors in which we operate. The common theme is that we are always focussed on underpinning our business with long-term infrastructure initiatives. We are now looking at how to take the company from a start-up ten years ago to breaking the billion Rand net asset value level. We've been through the various entrepreneurial growth stages and have built the governance structures and system-driven control environments to prepare ourselves for the next stage of growth. We have lofty ambitions and have set the target of doubling our net asset value over the next three to five years."
How do you see the role of the CFO? Do you think it has changed in recent years? If so, how so?
"It has definitely changed. It has become more of a strategic and operational support function. The role requires a much deeper involvement in the business than before. The financial reporting component is expected as a given but it's only a portion of the role. You have to be able to support the business and the execution of its strategy in terms of how shareholder value is created. Our subsidiary CEOs know how to operate their respective businesses and run the operational components. As CFO, you have to introduce the concept of how to create shareholder value and utilise all financial tools at your disposal. We offer the financial support for these decisions as well as stakeholder management support."
"I enjoy my role as CFO. I love that you've got complete visibility of the group. You're not seeing a small part of the whole, you're seeing the whole and trying to ensure that the whole constantly makes sense."
Which skill/s do you think a finance professional should master to be most successful in their work?
"People management. Technical competence is a given. People management skills and emotional intelligence are necessary to manage the various requirements of the role. The ability to deal with situations where everyone has their own agenda and bring them together to share a vision is critical. The people component is often underestimated."
"The old-school way was focussed on more of a dictatorial approach, whereas the new approach is about collaborating effectively as leaders to maximise people's output."
In your opinion, what is key to building a strong team?
"It's getting the mix of skills and personalities right. You get different types of finance people - those who like detail and are more introverted, to those who like deal making and are more extroverted. It's a balance of those personalities that is key. If you've got all the same personalities the team doesn't function at an optimal level. In addition, the team has to buy into the vision and understand clearly how they contribute to the achievement of that vision."
What is your experience with strategy development and formulation in your role?
"We understand where we are at the moment. We've set goals as to where we'd like the business to be in the next five years, and have started to address the strategic components of what the business must do to get there. We've been very collaborative in involving all our subsidiaries' leadership teams. We've focussed on how best to ensure that the business continues to build on the basics and we try to do the basics well, because that's the foundation. If the basics are weak, the growth will be difficult to manage. Our strategy is to maintain strong fundamentals and basic skills, and ensure our people understand and share that vision."
"From a stakeholder perspective, we have assessed what value means to them - it's important to understand that stakeholder return management is a crucial aspect of doing business."
"We've also unpacked how various businesses can assist each other to achieve the set-out objectives and get the group to be more cohesive. We operate in disparate industries but share the same core underlying approach of long-term infrastructure projects and investments. So the ability to leverage each other's skills is very prevalent and to encourage that collaboration is important. We have taken this further and started to ask each of our businesses how they can contribute to the whole from a brand and service representation perspective."
"All our businesses are aware of the impact that they have on each other and are aware of not operating in isolation. So we've built the tactical components around that. In a group, that is a challenge - businesses tend to want to go on their own."
In your previous post with Royal Mnandi you were a key member of the team responsible for a large merger. Tell us about this experience.
"It was a difficult one as it was a merger under distressed conditions. The executive team of one business was removed in its entirety and we then needed to join two very different businesses. The client base was similar but the internal cultures were most definitely not. We had to integrate at middle management level, and integrate the systems to get onto the same platform."
"We ensured that during the merger we didn't ignore or neglect either team, so we had to find a way to keep everyone invested in the process. We also had to get a consistent message out in terms of communication with clients, and reinforce that it was the same business just different management."
"The most important aspect for me was managing people and communicating effectively with all those involved. We also had to ensure a transparent process, so there was no window dressing, and we had to instil a culture of whatever we said, we delivered on. It took about two years to stabilise but it turned out well."
It is becoming increasingly common these days for CFOs to move into CEO roles. Do you think this is a natural progression? Do you think it makes sense?
"Yes. If you look back, the CFO role was a strong technical position but the influence on strategy and people was much smaller. The skillset that a competent CFO needs nowadays mirrors what the CEO does. We've found in an organisation like ours, we (the CEO and the CFO) have to be able to dovetail effectively. We can't be in the same place at the same time. If one isn't there the other must be able to step in. So we both need the ability to address each other's areas. A CEO without a strong financial understanding is also at a disadvantage."
What, in your profession, are you most passionate about?
"For me it's the people. I enjoy the mentoring and developmental side of the role. I enjoy watching people start and evolve to achieve their dreams. It's important to help each other - if you can help someone reach their aspirations, your own success is a result of them achieving theirs. I also believe in the value of a mentor and think it's good to have someone to bounce ideas off of."
What are you doing when you're not working? How do you spend your time outside of work?
"With the stress and strain of this job, you've got to try and stay active. It's not a nine-to-five, it's a full commitment. So to stay fit I play squash, go to gym or swim. If you're not healthy, your ability to withstand periods of high pressure becomes less and less over time. Another very important aspect of my life is my family. It is important to make time to enjoy my family as they keep me balanced and grounded."
