The ability to learn quickly is critical, says Thabiso Hermanus, LSC Group CFO
“I ask a lot of questions; even those I feel I don’t need to understand. We have all travelled different journeys, so everyone I meet, I try to understand what helped them get to where they are and, given the opportunity hypothetically, how I could help them,” says Thabiso Hermanus, CFO of the LSC Group, a subsidiary of Imperial Logistics.
From running his own small auditing firm to establishing an entire finance department from the ground up, with naught but himself and a "blueprint template" in his own head, Thabiso is no stranger to jumping straight into the deep end: "My career path has luckily forced me to stretch beyond numbers, but I had to do it proactively, because it's very easy to stay focused on just the numbers when you're sitting behind a desk."
What have you achieved since taking on the role as CFO of the LSC Group?
"I experienced a milestone by restructuring the finance department, the structure of which is now better designed to fulfil the long-term strategy of the business. The restructure wasn't necessarily in terms of people but more in terms of positions equipping each division into a finance team to better support its general managers. I had to understand each person's strengths and weaknesses in order to reassign them to a position where I thought they would excel. Part of the process included an extensive recruitment drive, which entailed interviewing, testing and placing eight new people in various positions, to support the backbone of each division. While rigorous, the process ensured I have invested the necessary time and process to acquire the best talent suited to working with the existing teams, myself and the organisation."
"The group has nine different business units and you head up the finance team across all of these, and also sit on the board. How do you successfully switch focus between these responsibilities?
"As much as finance is finance, in relation to past projects, this industry is particularly new to me. At CFO level you have to understand the mechanics of the business and what the crucial drivers are. This gives me the edge and the ability to switch my mind-set and focus on all these entities, though it can be a very daunting process if you don't have the right support structure working with you, which is why I invested the first few months in understanding the finance team's strengths and structure, ensuring it was the right support for the group so that I could focus on the strategic part of each entity and trust that, operationally, things would be running smoothly."
"As a CFO I don't have the luxury of doing one thing at a time. So the best way I switch my mind-set is to ensure I have a strong financial management team in each division first, so that when I engage with each team it's easier to switch mind-sets."
What are your thoughts on the CFO's role in strategy development?
"The economy is so unpredictable that strategic thinking should be a focal point. The CFO's role here is critical, and more finance people - not just CFOs - need to start thinking strategically within their level. My career path has luckily forced me to stretch beyond numbers, but I had to do it proactively, because it's very easy to stay focused on just the numbers when you're sitting behind a desk."
"In my opinion, even junior finance clerks need to stretch out of their roles and apply themselves and start thinking like proactive agents of finance rather than reactive processers of finance. As the CFO it is my job to further empower this kind of acting and thinking so that it becomes second nature."
How does your current role support the CEO in exploring strategic opportunities?
"Part of our strategy is not just organic growth, as acquisitions are also a part of our business growth strategy. With that comes some analytical work, which is conducted on our competitors or similar companies that could be acquired to help grow the group and where the market is going. The industry and market, from a financial point of view, is integral and must be considered by both myself and the CEO. The group is very diverse, but the idea is to intensify within our current services in a smart way rather than diversify outside."
Prior to this you were Head of Finance for POWER FM; at the time a brand new radio station. What learnings did you take from that experience?
"The learning curve on this journey was as steep as it was rewarding. Picture around 80 different individuals, including experienced radio personalities, all hired to start at the same time to shake up a saturated media industry and do something nobody else in this country has ever done, while also managing people's expectations, the media's expectations and the public's expectations. Winning support, encouragement and learning from strong entrepreneurs like Given Mkhari, Simphiwe Mdlalose and Andile Khumalo affords you valuable lessons, such as how to constructively garner support and strength, how to manage people's expectations, how to handle group dynamics, and best of all, how to manage a crisis and motivate the team without making inciting panic. It was a great honour to work beside these individuals and to see their dream manifest into the powerful entity that POWER FM is today."
Part of your responsibility at POWER FM was to set up the finance department from scratch. How did you go about this?
"Part of the intense training one goes through while doing articles is compliance, integrity and systems, because I used to audit some large companies. Thinking like an auditor was my starting point. I have a blueprint template in my head of what a strong finance structure should look like and through a small stint owing my own company I saw the one common mistake a lot of entrepreneurs make: they don't invest in a strong finance department until it's too late. I invested in systems and people, and painted a picture of what we were trying to achieve. It wasn't easy, but I think I was successful because the auditors never had problems and the company's funders where more than happy."
For a short while you ran your own auditing firm. What did you learn from this and why did you decide to return to corporate?
"I learnt to appreciate putting my employees' needs before my own, and I learnt that a lot of small businesses really underestimate the value of a strong finance department from day one of trading. I returned to corporate because I felt I still had a lot to learn from it, and because I came to realise that auditing was not my passion. I wasn't actively looking at the time but I got a call from Andile Khumalo about an opportunity within the MSG Group and because he knew my work ethic from auditing MSG Afrika while I was at EY, he felt at the time I was the right man for the job. It was an opportunity to learn and I couldn't refuse it."
Which achievement in your career are you most proud of?
"Starting the Finance Department of POWER FM and sitting on the first executive team. As the Head of Finance it means you are in charge of more than just finance. As one of the first three employees in the three months before launch, I was one of the builders of the business and was involved in almost every decision, including recruitment in certain cases, and budget versus actual, as we were accountable to funders and shareholders; building funding models and presenting to funders to justify why there was a requirement for overspend in some cases, or even for additional cash injection requirements."
How do you ensure your own continuous improvement?
"I ask a lot of questions, even those I feel I don't need to understand. We have all travelled different journeys, so everyone I meet, I try to understand what helped them get to where they are and, given the opportunity hypothetically, how I could help them. I humble myself by putting my pride aside to actively engage and learn because we don't know everything."
In your opinion, what makes a great CFO?
"Integrity, leadership and the responsibility to equip your team to grow and learn so that one day they can create employment either within the organisation or by starting up something of their own. Technical abilities are a given at that level. I tell all the people I have employed, 'I did not hire you to just be comfortable and occupy this position for the rest of your life. I hired you to give you a platform or opportunity to become better than what you were previously, because you to have a responsibility to help create sustainable employment and grow our country and economy'."
Which skill/s do you think a finance professional should master to be most successful in their work?
"The ability to learn quickly is critical to the business. It's also extremely important to help you keep up with the accounting standards to improve your technical abilities. Finance professionals should learn the skill of leadership, as well as how to get the best out of people; you are only as strong as your weakest link."
"It's pointless being at a high level and being a genius at strategic growth when your operational finance team, which is the backbone of the department, is not strongly equipped to manage the growth and workload."
What does the CFO of 2030 look like?
"A qualified professional who thinks like an entrepreneur and functions in a corporate environment because they have influence. We can't all be entrepreneurs because someone has to lead the massive corporates, as those are the ones that support the SMEs. Besides the obvious technical capabilities, which are a prerequisite, if the CFO thinks about creating growth and introducing jobs to the economy without jeopardising the organisation, their focus will adjust. As a position that's very influential, I think the CFO must play a greater role in influencing the growth of the economy through their organisation."