Lehan le Grange reveals how he uses leverage to get the most out of his team at Ecentric Payment Systems.
A skilled CFO can apply the same principles to uncover opportunities for creating value in both their personal and professional lives through leverage. One such naturally driven individual is Lehan le Grange, who has been in the finance field for 11 years and has been with Ecentric Payment Systems for three years. He started as a commercial analyst and quickly rose to influence strategy for the company.
Finding leverage
Ecentric Payment Systems was a pioneer in South Africa, being the first to adopt the Payment Card Industry Data Security Standard (PCI-DSS). This standard is now mandatory for any company that processes payments. As a result, Ecentric Payment Systems has grown into a comprehensive payment solutions provider.
However, when Lehan first joined the company, they faced numerous challenges, including pricing, cost containment, decision inertia, and performance management. “Despite these obstacles, we remained determined to find opportunities to optimise our services and provide the best possible solutions to our clients.”
Three years in, Lehan says his greatest accomplishment has been revamping the management accounts and integrating them as a crucial component in setting strategy and direction.
Enabling teams
Lehan explains that, “In medium-sized companies, financial decisions are often made at the top with little context from middle or senior management. Income statements are usually reported only at exco or board meetings, and financial discipline is handled centrally by pressuring sales to increase and the top expense lines to decrease.
“The CFO leads this effort with the support of the CEO and board, and other executives generally comply. The question in this scenario, is how do you allow key decisions to be taken at levels closer to the action, without relinquishing control at the top management level?”
He says that his approach was to redesign the management accounts at Ecentric, which enabled clear distinction between cost and profit centres, thereby allocating responsibility to heads of departments rather than executives.
“Each senior manager was allocated their own budget and income statements to track against budget and prior performance, allowing them to manage cost and profitability. Relationship managers have a fully costed view of their clients’ profitability and can have constructive conversations with IT and finance regarding the cost each customer is picking up.
“Each team in Ecentric has their own cost centre. Executives are freed up to manage exceptions and focus on strategic decisions.”
The upside is that managers now understand the financial implications of their decisions and are occasionally even more thrifty than he is. With this knowledge and further insight into potential sites of failure, new strategies could be devised swiftly to reduce costs (fortunately without laying off employees) and correct pricing for clients whose support needs overshot their income contribution over time.
He says the changes have enabled a new level of financial agility, empowering managers and executives to adapt swiftly and responsibly to changing circumstances. As a result, financial issues can be resolved much more quickly than in the past, especially when the present budget does not permit it.
Lehan says the challenges they faced in the past have forced them to be more innovative and adaptable. “We've learned to be more proactive in identifying potential risks and taking steps to mitigate them. Our financial stability has improved, allowing us to invest in new opportunities and expand our reach. We can now focus on becoming the payment service provider of choice.”
He says their governance structure is stronger, with clearer lines of accountability and better communication channels and adds that, “Perhaps most importantly, we've developed a culture of resilience and collaboration that will serve us well in the years ahead. While we never would have wished for the difficulties we faced, they have ultimately made us a stronger, more agile organisation that is better equipped to face whatever challenges come our way.”
Looking ahead
Lehan shares that they are enhancing their already robust, well-oiled online payments gateway with the capability to process millions of transactions per year. They intend to grow this platform in South Africa, and to expand into other strategically selected African markets.
“Venturing into Africa presents a remarkable chance for us to explore a fresh market with immense possibilities. Thorough research is necessary to comprehend the cultural and economic disparities in every country we intend to penetrate. It’s crucial to have a well-defined plan and pinpoint suitable collaborators.
“Additionally, we may have to modify our offerings to cater to the unique requirements of African merchants. A successful expansion into Africa will broaden our customer base and decrease our dependence on a single market, ultimately enhancing our business’s resilience.”
He emphasises the importance of taking a step back and assessing the potential risks associated with any new business venture. “While the numbers may look promising, it’s crucial to consider the worst-case scenarios and how they could impact the company as a whole. This means conducting thorough risk assessments, identifying potential vulnerabilities, and developing contingency plans to mitigate any potential damage.”
He says that by prioritising risk management over short-term gains, companies can ensure their long-term success and sustainability. “It’s not about being pessimistic or overly cautious, but rather being realistic and proactive in protecting the company’s interests.”
Creating personal wealth
In recent years, Lehan has been leveraging the power of property investment. He and his wife currently own 19 properties, and even in the aftermath of the pandemic and the ensuing volatility, he remains interested in expanding his portfolio. He recognises that if he had simply put his money into a savings account, he would not have the same asset value when he eventually retires. He credits the leverage impact of being able to use a bank loan to grow your asset portfolio as being a key component of this wealth generating strategy.
He says their decision to invest in property was solidified by observing the success of others who had done the same. “Property investment allows for the creation of a passive income stream and the building of wealth, which makes perfect sense to me. Additionally, the tangibility of property is appealing compared to intangible assets like stocks.”
Prior to investing, he conducted extensive research and educated himself on the subject to make informed choices. Ultimately, his interest in real estate, observation of others’ success, and education, led to the decision to invest in property, which has proven to be a wise choice.
By leveraging his financial expertise, he has been able to create value in both his personal and professional life. His success serves as a testament to the power of informed decision-making and the importance of taking calculated risks.
