Don't think risk, think business, says Ryan McDougall, Group FD Trustco Group Holdings


Ryan McDougall, Group financial director of Trustco Group Holdings, was almost lost to the financial world as he came close to pursuing a career in paleontology. Having recently announced he will be leaving Trustco and Namibia to return home to South Africa and take up a position as CFO of MyBucks from January 2017, we caught up with Ryan to chat about his time at Trustco. “I will really miss Trustco. The people create a unique atmosphere of energy and confidence, which other mid-sized companies seem to lack. There is something intangible and exciting about an organisation of this size which can respond rapidly and dynamically to shifting strategies and market trends.”

How did you come to pursue a career in the finance industry? Was it always your plan?
"It wasn't. I actually wanted to be a paleontologist. History and mysteries have always fascinated me, but I think my family talked me out of those careers towards the end of school. At some stage I decided I wanted to get into the business world and studied business science at UCT. Commerce is still quite detail-oriented, which I liked. Much to my wife's disappointment, I still love to have a head full of arbitrary scientific and historic facts."

What is it about you that you think gives you an aptitude for your chosen career?
"I like to make complex problems simple and I am adaptable. When I started at Trusto, I had a banking background, which has rigorous compliance and men in suits are the order of the day. Trustco is not at all like that. I liked that about the company. I prefer working in a fun environment and especially working with juniors, mentoring and teaching. It's really rewarding to see people grow in their career."

What you do most enjoy about the finance function?
"I enjoy having the aspects of creating a clearer view of a problem; putting all the detail together and taking a step back to see the big picture start to emerge. I imagine its much like putting dinosaur bones together to form a whole skeleton and then having an idea of the animal that it once was."

Which achievement in your career to date are you most proud of?
"Being nominated for the CFO Awards was a huge honour for me. Attending the awards with highly respected people in my profession was a huge highlight. I'm also very proud of becoming a CA. It's years and years of study and working at night after you've finished your day-job. It feels like a well-deserved privilege to bear the designation of CA after the number of long years spent earning that goal. It wasn't easy but it was rewarding."

As a CFO, what is your personal leadership style like?
"I feel I am the hardest worker among the group and I lead by example. I have also granted more autonomy to divisional CFOs, which I hope will inspire and motivate. I aim to perform at a high level and set the standard for the rest to follow suit."

"In a finance team you are not running around high-fiving each other the whole day, there are only small victories, and there is a large dose of daily grind."

"We do try to have social gatherings and before year-end I try give as much motivation as possible to carry the team through the tough months. It can get depressing in finance, so it is important to blow off steam. Creating the right attitude at work is very important to keep the energy levels up."

What has been the toughest decision you made in the last two years? How did you assess the risk and what choice did you make?
"My toughest decision relates to resource allocation. We are growing faster than our competitors, but the choice of which projects to invest in can be tough. Managers who lead our projects are always vying for our scarce resources. One of our projects in South Africa was dragging its heels. It had looked good, but it was running into a brick wall. In July 2015 we gave them until the end of October to improve, but it did not make a difference. I hate to cut costs, as it is not the only way to facilitate growth, but here I had to backtrack and make a tough decision to remove funding from this project."

What is strategy development and execution like at Trustco? How does this happens and what is the CFO's role here?
"It's driven by the group MD, he injects all the big ideas into the company. Once we have an embryo of an idea we try to debate it among senior execs or other stakeholders. We get those people together and make it as informal as possible - in a breakaway room or perhaps off-site - and try get a relaxed brainstorming session on the go so that people are open to new ideas. Once that's done and we've identified the idea, as well as some of the milestones we want to achieve, it goes to a project team. Usually, if it's a big enough idea, it falls on my desk for the financial side. Sometimes it's only about financials and forecasting, other times the team might need an individual to critique or generate ideas."

What is risk management like at Trustco?
"We try and entrench risk management. We don't have roles or check-box compliance functions, we try to ensure it is embedded in the process. We might use a consultant at times but the overall view is: don't think risk, think business - risk is only a part of the whole."

There has been some diversification in recent times regarding the company's core business. What challenges has this brought with it?
"The company expanded recently into diamond mining. Before that it expanded by buying a commercial bank. This brought along two core issues - one internal and one external. With both the bank and mining, the internal focus been on regulations - bear in mind we're now also exposed to banking regulations. So there was a huge shift towards more compliance in the organisation. Externally we also came under pressure from shareholders and investors, who were asking what exactly our core strategy is. It's difficult to respond to that because we don't know!"

"Trustco could be a vastly different animal in five years' time to what it is now. That has scared some people off but also attracted some new ones more open to change and willing to accept a flexible output driven strategy."

What external factor has the biggest impact on the financial performance of Trustco and what measures do you take to overcome this?
"A large part of our business is insurance and we also recently acquired a banking license. Our risk in the current economic climate is that customers will become over-indebted and the first thing they will default on is unsecured loans and credit cards. With our student loans and short-term insurance, we are at the front line of this potential market effect. Our bad debt ratio is under 5%, so that is really good and we ensure customers are borrowing responsibly via various checks and balances. Overall, we are managing as prudently as possible within the growth confines."

Tell us about the business landscape and climate in Namibia. How different is this to elsewhere?
"It's a small economy. There's a range of systemic risks affecting the growth of the whole country. Local regulators do work quite closely with businesses, especially in mining and financial services. This is a good and a bad thing. It's a good thing in a downturn, but can constrain rapid growth if you operate in an over-regulated environment. There tends to be more over-regulation than there should be. As the country grows I think the regulators will find it impossible to continue as they have in the past and it will naturally evolve away from that to more free market with emphasis on self-regulation."

What's next for you?
"At the end of December 2016 I will be leaving Trustco, which is head-officed in Namibia, and heading back to South Africa. I'll be joining MyBucks as their CFO in January 2017. I'm excited to take up a new role in my home country but I will really miss Trustco. The people create a unique atmosphere of energy and confidence, which other mid-sized companies seem to lack. There is something intangible and exciting about an organisation of this size which can respond rapidly and dynamically to shifting strategies and market trends."

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