Othmar Kobler worked for DHL Global Forwarding Europe at head office in Switzerland for six years before re-locating to South Africa in January 2012. The 40 year old Swiss national helped to establish a regional office in Johannesburg to manage Sub-Saharan Africa.
Kobler holds an Executive MBA in Corporate Finance from HEC, Lausanne. He has 12 years of professional management experience, including 5 years of international exposure. Prior to joining DHL in 2006, his career in international finance included working as Head of Administration for the International Committee of the Red Cross, Senior Consultant with Andersen and as a Manager of Strategic Planning with Swissair.
CFO.co.za chatted with him about his current position as CFO for DHL Global Forwarding, Sub-Saharan Africa:
You have held the position of CFO for DHL Sub-Saharan Africa, based in South Africa, now for 1 year. You were based in Switzerland for the previous 5 years. What areas of your business are the most challenging in Africa and how do you address these challenges?
As a former regional controller for DHL Global Forwarding Europe, my biggest learning curb in Africa was the absolute importance of cash, and the risks associated to it, both in terms of treasury and credit-default. The old Finance-wisdom saying that "EBIT is hope, and cash is king" is very true in Africa.
From an overall business-perspective, our Freight Forwarding division is facing the challenge of moving from rapid geographical expansion into "cash-generation" mode and to find a sustainably profitable growth-path in the 18 Sub-Saharan Countries we are covering. Africa is a "high-volatility" context, where linear financial performance is the exception, not the rule. Actors in the private sector are exposed to risks that can easily wipe out several years of bottom line if not properly managed & anticipated.
As a multinational company participating in this market, you need to have a crystal-clear understanding of the risks at stake, before starting to "roll your dice". Creating local management & head office awareness for these risks (and opportunities) is one of our key roles here.
What do you enjoy most about your job and why?
As a new "Regional Team" covering Sub-Saharan Africa, our management-team enjoys a certain leeway in setting up structures that allow our group to adopt the "profitable growth" strategy to the African context. This unlocks a lot of creativity in designing our own strategic roadmap, which is rewarding.
In terms of collaboration, I am excited about the eagerness of our teams in the field to learn and their general openness for change. Unlike Europe, where "change" is often perceived as a synonym for "pain", Africa tends to embrace change as the normal course of doing business.
For several years, DHL Global Forwarding had been managed in Singapore prior to you setting up the JHB office. What made DHL take the decision to open a branch based in South Africa?
With a footprint in 18 countries, and "high-growth" expectations going forward, our Business Unit had reached critical size & complexity over the last 3 years, which ultimately required an "investment" into a dedicated regional office, located on the continent, operating within the same time-zone. We currently employ a workforce of 1,500.
The access to skills and management talent make South Africa a good "knowledge-hub" in this regard, justifying the distances we cover when travelling "up-north".
The large multi-nationals have previously been nervous about investing in African markets. What has changed over the past few years?
I would say it's a favourable combination of macro-economic growth prospects, a relatively extended period of political stability and specific opportunities applicable to our logistics business:
a. With a GDP-outlook of 5.5% until FY15 (at its highest rate since FY08), Sub Saharan Africa is expected to be the continent with 2nd highest growth-rate worldwide.
b. One of the most tangible opportunities for a multinational logistics player like DHL is certainly the recent Oil & Gas-discoveries in Eastern & Central Africa. It is important, however, not to put all the eggs in that one basket, ie. not to ignore the more "traditional" logistics sectors like engineering, automotives and last but not least, the emerging consumer-sector in the established markets.
You were Head of Administration for the International Red Cross, responsible for operations in Afghanistan, Nigeria, Sri-lanka and Abidjan. These are all politically unstable areas with many challenges. How did that experience assist you in your present role as CFO for Sub-Saharan Africa?
I could summarize my role in these four humanitarian missions as a "Crisis manager", whose role was to "cope with the unexpected". Disaster-contexts force you to apply a constant, sometimes brutal sense of prioritization and abstraction (between what you see and what you do), which are essential skills in the modern world of business.
Another more "institutional" skill I acquired thanks to the Red Cross's neutrality mandate was diplomacy, something I could summarize as an "art of negotiation", hugely important in my role down here as well.
You mentioned that during your time spent in the International Red Cross on humanitarian missions in war torn regions you witnessed the total devastation caused by civil war and 10 years later when you returned in your role as CFO with, the economies were booming and the civilian population was recovering towards "stability and normality". In your opinion, how rapidly is sub-Saharan Africa evolving in contributing to the global economy?
It is ALREADY happening - big time: What it takes to sustain that growth-momentum is a transition "from push to pull", ie from investment/resource-fuelled growth towards creation of a genuinely consumer-driven demand.
Needless to state that the latter is driven by the emergence of a "middle-class" society, this is a transformation that we have only started to see happening in a few countries. I think it will take an extended period of political stability and economic prosperity until it really reaches the "tipping point of no return". Meanwhile, in order to unlock this potential, actors in the private sector need to have business strategies tailored to target the "bottom of the pyramid", and adopt consumer-approaches similar to India & South-East Asia.
How does the finance industry in South Africa differ from the rest of sub-Saharan Africa?
One key differentiator is the existence of an effective, well-established credit and banking system. South Africa is one of the few "Non-cash" economies, where credit-worthiness is considered a privilege that enterprises work hard to retain, by acting as "good paymasters". In the World Bank's latest "Ease of Doing Business" report, South Africa has been ranked as the number one country worldwide for "access to credit" -on par with UK - that's quite a compelling credential in this regard.
What do you see as the greatest challenge for South African companies in the current global economic situation?
I would highlight three key challenges, which are partly interlinked:
1. Matching labour-productivity with unit-cost, ie. to increase output to on par with inflation.
2. Expand the pool for skilled labour and management-talent: I would consider this as critical to reduce South Africa's dependency from importation of manufactured goods and for the establishment of a competitive service sector. What I find missing in South Africa is a formal system of "vocational training" programs, where young high-school graduates get their chance of undergoing a formal 3 - 4 year on-the-job training to become certified professionals. The private sector is starting to put initiatives in place to foster that, but more should be done.
3. Work on the regulatory framework: "costs of doing business" in South Africa are on the rise and a fine balance needs to be found between regulation and entrepreneurial leeway - this is particularly important for small and medium businesses.
Who is your role model in life and why?
I have probably not read enough management-literature to name a single "guru", but I have been enjoying continuous inspiration from leaders & peers in my immediate surroundings, who share my values of "integrity" and "passion", two critical virtues in both life and business.
What vital piece of advice would you give young ambitious finance professionals?
"Look beyond the figures"
One of the problems in Finance is the almost total quantitative/technical focus in our professional education of auditors and analysts - no wonder that we are perceived as poor communicators and sometimes as nerds. It's important that you realize at a certain point in your Finance Career that in order to "influence the numbers" you need to influence behaviour first. Churning out reports without management follow-up serves no real purpose - the challenge in Finance and Controlling is to facilitate a dialogue, and to "make the figures speak".
If you also would like to share your ideas with the CFO community, please get in touch with us to arrange an interview with you.Please contact Jurriën Morsch on [email protected].
