When Barloworld unbundled Avis Southern Africa, it was up to CFO Thobeka Ntshiza and the rest of the executive team to take Zeda on a journey to independence. In a CFO Magazine interview, Thobeka unpacks every twist and turn she faced on the way.
Seldom do CFOs find themselves charged with the monumental task of revolutionising an entire organisation upon their induction. When Thobeka Ntshiza was appointed as Avis Southern Africa’s CFO in November 2020, she became one of the few who would.
Two years later, Barloworld announced that it would unbundle its stake in Avis Southern Africa by way of a separate listing on the Johannesburg Stock Exchange (JSE).
“The opportunity to be in an organisation where you can start a new chapter doesn’t come across everyone’s career. Most people come into organisations that have been running with a long track record for many years, but to rebirth something is a huge responsibility,” Thobeka says.
She admits that, had she known what she would have had to go through she might have given up long ago – but she’s glad she didn’t. “Endurance builds along the way, and the opportunity to be one of those few is what really motivated me to keep going.”
Since its separation from Barloworld, Zeda returned to its roots of more than 55 years. The company started in 1967 as Zeda Car Rental and Tours, making it one of the first few car rental companies in South Africa. It grew and evolved, and eventually, it was listed on the JSE as Avis Southern Africa Limited in 1997.
In 2005, Barloworld acquired 100 percent of the business, delisted it and incorporated it into the group as one of its major subsidiaries. Avis was part of Barloworld for 17 years, until the group’s board decided to divest out of automotive and logistics, resulting in the listing of Zeda Limited (the holding company for the global brands, Avis and Budget) on the mainboard of the JSE Limited on the 13th of December 2022.
“It’s amazing how, when you’ve been part of a group for so long, things become intertwined,” Thobeka says.
It was up to her and the Avis management team to untangle the threads. “We had to look at what we needed to take with us, what would remain and where we had to go and create our own.”
She explains that her biggest challenge was trying to raise funding. “No company can stand on its own without facilities and bank support. Great effort was put into introducing our business to the debt market and much success was achieved.
Ensuring a sustainable journey
The company’s strong performance in the last year has been due to the hard work Thobeka and the Zeda management team have put into returning the business to profitability after it had been significantly impacted by the Covid-19 pandemic, particularly the car rental business. For nearly a year , the car rental operations grappled with losses.
“Before the pandemic we were predominantly an airport and tourism-based business. Therefore, with the restriction on movement, we were heavily impacted,” Thobeka said. “We had the largest amount of fleet that was parked and not generating income. Every cost element you could think of, including parking facilities, increased. Management also had to make salary sacrifices and as a last resort, we underwent the section 189 process.”
Thobeka and her team had to come up with a strategy that would save the business and be sustainable for the future. “We had to take stock of the infrastructure and processes that added value to the business, and get rid of elements that were wasteful,” she explains.
They also looked at how they could introduce new revenue streams, which resulted in the birth of the subscription offering. “This was a turning point for the business as we saw about 6,000 vehicles back on the road in July 2020 and a year later, in 2021, we managed to bring back staff that had been laid off,” Thobeka explains.
She adds that, for as long as there’s a person that needs a car, there is opportunity.
“We’ve come from an era of ownership, but today’s world demands more choice and flexibility.”
All in the same car
Change is always challenging, even if it’s exciting. “When you’re dealing with human emotion it can be difficult,” Thobeka says.
When Barloworld unbundled Avis Southern Africa, there were a lot of questions from employees about job security and how they would be impacted by the change. “Everyone was concerned whether we would be able to survive as a stand-alone entity,” Thobeka explains.
Zeda’s leadership team spent a lot of time engaging around the why and helping everyone understand the new journey the organisation was embarking on. “They had to trust our purpose; why we were doing this and what the significance and relevance of it was. Once you believe the why, the how becomes easier.”
The unbundling process was particularly challenging for the finance team and Thobeka had to work on transforming the function. “The team composition was very traditional and I knew that, to get to where the organisation was hoping to grow, we had to adapt and make changes. I therefore, capacitated the finance department to be able to better support the organisation, by diversifying the skills in the team,” she says.
Over the last couple of years, Thobeka has brought in statisticians, economists and programmers to present new developments in their areas and how they could impact the other functions within finance . “It’s important to be aware of the world and the advantages around you,” she adds.
“We also introduced Ulwazi Hub sessions, which are run by our communications manager Mathapelo Matjokana, where everyone in the organisation comes together and share some of the things that are going on within our business, and can ask for help where needed.”
She adds that it’s amazing to see how everyone has transitioned during the Ulwazi sessions. “Now there are a lot more questions around why we aren’t innovating in certain ways and how we can make the organisation better.”
Because of its brand-centric culture, the employees at Zeda are referred to as Brand Ambassadors, including the executives. “It gives us a common purpose, and enables us to protect and guard it fiercely,” Thobeka explains.
In transforming her finance team, Thobeka has also “dared” to give young people a chance, and says they are “showing her flames” – in a good way! “They are smart, they are hungry and they are eager,” she says.
She explains that many leaders are restricted by their own inhibitions and believe that because it took them 10 years to get to where they are, others should follow the same route. “Remove those inhibitions, judge them as the individuals they are, for their skills and their growth potential. If they can do the job, give them the opportunity.”
Thobeka says the most fulfilling part has been watching them grow, adding that the biggest hindrance for today’s youth is finding someone who will give them a chance. “I want to leave behind a hall full of people who will all say ‘she opened the door for me, all I had to do was take the wheel and drive’.
“I’m not looking for perfection. We’re going to make mistakes, and as we do, we will learn from them and grow.”
She explains that there’s a certain magic that comes with having a team that isn’t limited by fear of repercussions or failing. “It often means they get it right more than they get it wrong, because they aren’t second-guessing themselves all the time.”
A test of mettle
Looking back now, Thobeka says the unbundling process and subsequent listing on the JSE Limited it was a test of mental resilience. “I wasn’t strong all the time. Sometimes I did feel like I was going to fail, especially during the funding phase.”
However, she explains that the safe environment they have built at Zeda allowed her to be vulnerable. “We have had some tough emotional moments , but it’s amazing how far a kind word from your colleague can motivate you to keep going.”
At home, Thobeka’s safety net is made up of her husband and five kids. “My husband has been very encouraging and supportive. He is also a Chartered Accountant in finance, so I think there is an element of relatability, because he faces similar challenges in his environment.”
She adds that families in these situations shoulder a lot. “Half the time they don’t know what you’re going on about, but they are there to listen and help you feel better.”
“I look back and think how did I survive that? But to be honest, it's been a surreal journey, and a good ride,” Thobeka concludes.
Another thing that has become very important in the car rental industry is the speed of execution. Customers are also demanding contactless service, where they can just get into a car and go about their day.
“Since its inception, Zeda has been all about improving customers’ lives,” Thobeka says, explaining that the significant role automation and digitalisation play in fulfilling that promise is not lost on her.
In order to ready itself for this new reality, Zeda had to let go of the joys associated with seeing long queues in its branches. “Today, we’ve had to take a step back and ask whether the customer actually wants to see us, nevermind stand in a queue to do so. So we’ve had to create solutions that give them the opportunity not to.”
“We are looking at an AI-driven solution that will enable customers to bypass the long queues we’re currently seeing at airport car rental kiosks to hire cars, for example, which is one of our biggest challenges at the moment.”
Zeda has started partnering with various OEMs to find ways to use technology inside their vehicles that can authenticate customers.
Some of its product offerings also include features that can measure driver behaviour and fuel consumption, and help businesses identify irregular spend or route optimisation areas.
“For the customers who are still coming to the counters, we also have to consider how we are adding value to their experience,” Thobeka adds. “Ultimately the customer only wants the car, so how do you make sure they get it in the easiest, fastest way possible?
This interview was originally published in the second edition of the 2023 CFO Magazine. Read it here.