What has been keeping CFO Bradley Wentzel up at night
Brad explains that, during the hard lockdown, he had to replan Douglasdale Dairy’s strategy daily.
In the latest CFO South Africa podcast, Douglasdale Dairy CFO Bradley Wentzel shared some of the challenges that have been keeping him up at night over the last year.
He explained that, when level five lockdown came into effect in March last year, right after most finance people had finalised their budgets and forecasts for the year, all of the budgets and planning he had done were thrown out of the window and he had to reforecast for the new normal.
On top of that, people in Douglasdale’s retail channel decided to buy long-life milk and products instead of fresh products with a short shelf life. “We had to also relook at sales, cashflows, run rates and other things that had been impacted by the change in buying pattern,” Brad said.
However, the group did have a couple of products that proved to be fairly robust over the lockdown period and helped with some of the sales drop-off in other products. “We were lucky to deal in amasi, which is a basic product for the South African lower income market,” Brad explained. “As people move from having R50 for the day to R20 because of Covid-19, we would see these products get used as a meal for that day.”
While the company was also fortunate enough to be deemed an essential service during the hard lockdown, which meant that its sales hadn’t dropped to zero over that time, Brad explained that they had to look at their sales on a day-by-day basis to see what was happening in all of the channels that they normally retail to, and had to come up with different plans for each one of those channels.
Along with a challenging retail market, China had increased its imports of maize by 450 percent as they tried to replenish their stocks of pigs after the swine flu pandemic last year. “The milk that we process and sell to customers comes from cows on farms. In order to make that milk, those cows need to eat. And there are different ways of feeding cows, one of which is very reliant on maize, all of which are very costly,” Brad said.
He added that China increasing its imports of maize put big pressure on the local maize price which, in turn, put pressure on Douglasdale Dairy’s basic inputs.
New world of working
Douglasdale Dairy’s processing and packaging plant is based in Bryanston in Johannesburg and isn’t something that can move into the virtual space. “We have 500 people that come onto the site daily as we have to pack, process and ship the milk products to our customers. We were mainly ‘office’ bound, because we can’t pack products without people,” Brad said.
So while Douglasdale Dairy’s new world of work didn’t exist only of working remotely and virtually, it still had to change its people operations because of Covid-19. “We had pods of people that would work in little groups in order to social distance,” Brad explained. “If there was an infection in that group, that group would have to self isolate without disrupting the rest of the workers on site.”
The finance team, however, did work remotely and Brad said that it was difficult to motivate them during that time, especially virtually. “I’m a big fan of a leader who walks around and pops his head in to say hello and offer help. And that element goes away when your team works remotely. It’s very difficult for someone in your team to set up a Zoom call to bounce something off you. That watercooler interaction just vanishes.”
The future CFO
He explained that the true value of a CFO lies in the people element of the business. “It’s not how you do a budget or a forecast. It’s about how you motivate, cultivate and grow the team under you to be the best they can be, because ultimately their success is yours.”
He added that leaders need to find some good resources, through podcasts or books or people that they follow, to give them the tools to help them be the best version of themselves for the people that are under them. “The modern CFO is not a hardcore finance person. They’re a finance-based facilitator who doesn’t have to be the best in the technical aspects, but needs to understand the people element and is able to collate all that information and package it in a way that the business can make the best choices going forward.”
To find out more about the challenges that are keeping Brad and Vodacom Group CFO Raisibe Morathi up at night, listen to Part 1 and Part 2 of the latest CFO South Africa podcast, in partnership with Sage.