Kenya in need of great CFOs, says Stavros Constantinou (Multiple Group)
“Great CFOs know exactly how to build controls, push transformation and convince stakeholders to invest in technology and that is what Kenya needs,” says Stavros Constantinou, Group CFO at the ever expanding privately-owned business Multiple Group. The executive from the Mediterranean island of Cyprus says the CFO Kenya community comes to Nairobi at exactly the right time. “We are here to help each other, because one plus one can equal three. This is the way forward.”
In December 2015 we are publishing a number of CFO of the Week interviews with CFOs in Kenya. To be part of our Kenyan CFO community, join CFO.co.ke as an online member and receive our newsletter, follow us on Twitter and join us on LinkedIn
After 28 years of educational and corporate experience in Cyprus, the United States and the United Kingdom, Stavros considers himself a "doctor of companies", who can take companies in financial or operational disarray and save them - and "turn them into gems". Analysis always comes first, he says. "I start by finding the root cause of the problems. Then I try to put it right. There are many ways of getting things done and ensure the long term survival of companies."
When he was appointed CFO at Multiple Group in December 2014, Stavros did not grab a comfortable seat at the top of the corporate pyramid, but stationed himself at the newly acquired Porsche Centre Nairobi and plans to roll out the change from there. "Multiple Group consists of a dozen or so companies. The well-known transport company Multiple Hauliers is one of them, but we are also active in logistics, freight forwarding, information technology, oil, transit control, car, truck and bus industry, and yards for cement bulkers and trippers. We also have other companies coming up, each of them complementary to each other."
Three friends started Multiple Hauliers in the early 70s at a small residential yard in the South C area of Nairobi. They landed their first contract for the movement of agricultural produce from Uganda to the Port of Mombasa. Nowadays Multiple Hauliers, the largest company in the Multiple Group, employs 2000 people and is present in Kenya, Uganda, Tanzania and Rwanda.
The fact that Stavros has been based at the Porsche Centre doesn't mean the rest of the group doesn't need improvement. "I have to start somewhere, so we do it one company at the time. We improve controls and streamline operations and copy-paste procedures that work to other companies. You don't have to reinvent the wheel every time. The finance manager at Porsche now knows the company inside out. We have now started Posh Auto Body (E.A.) Ltd, a state of the art body shop for the automotive industry, and the finance manager there was also trained at the Porsche Centre. That is how we approach it for the auto group. We are now currently focusing on a dealer management system (DMS)."
Stavros says many CEOs and CFOs from Cyprus have developed skills "over and above the requirements" because of the competitive nature of the economy, which predominantly consists of tourism and a - dwindling - service industry. "The country was doing well, until the economic crisis that hit most countries in the south of Europe hit us. With the deepening economic crisis and prospects of recovery still a long distance away, executives are looking at opportunities elsewhere and I found a role as Group CFO in Kenya."
"Accounting firms do a lot of good work, but that is predominantly geared towards their own customers. Coming together under one umbrella is going to make all the difference for us as finance professionals and for Kenya as a country."
Even during past education and career moves to the US and UK, working in an African country has always been on his mind, Stavros says. "My father-in-law was born and raised in Congo and my wife lived there until she was 6 years old. We are very happy to have moved to an African country. People are very nice, warm and friendly and I doubt I will go back to Cyprus. I am seeing the move as permanent. Obviously business moves at a much slower pace, but that is not something bad necessarily, it is more important to get it right first time than to do it quick. In the beginning I was so frustrated with the slow pace, but who am I to judge? I am viewing things from a new perspective now."
Stavros says he is enjoying passing on his "wisdom and expertise" to the Kenyan finance managers he is training. "Kenya is enjoying an economic boost, but it is important to learn from elsewhere and avoid common pitfalls. The most important challenges are the high level of corruption and also security issues, but African countries also have challenges like devaluation of currencies and relatively high interest rates and inflation. A highly leveraged country works in the same way as a highly geared company. Most important is to get balanced budgets and capital injections where there is shortage of liquidity so that over gearing subsides. CFOs should excel in anticipating cash flow and hedging techniques. Inefficient IT and downtime of network connections are often bottlenecks, so good CFOs make sure there is an adequate budget to deal with this. CFOs should be proactive."
Stavros is enthusiastic about the CFO Kenya initiative, bringing finance leaders in the East African country together for peer-to-peer networking and knowledge sharing. "Accounting firms do a lot of good work, but that is predominantly geared towards their own customers. Coming together under one umbrella is going to make all the difference for us as finance professionals and for Kenya as a country."