“The biggest ambition that I have is to always leave a better legacy than the one I found when I took on a responsibility,” says Kenny Fihla, who took over from David Munro as chief executive of Standard Bank Corporate and Investment Banking (CIB) in May this year. “What will the next generation of people or leaders in my role think when they assume the responsibility that I’m currently fulfilling that forces me to think about my actions? I get obsessed thinking about that – the creation of a lasting legacy.”
Although Kenny, who was promoted from the deputy CE role, is known for his knack in successfully turning things around, he is always mindful of the ones who will follow in his footsteps. “I’m fascinated with how every business can do things slightly better,” he says. “I have no doubt that whoever inherits a business from me, they will always find things they can do differently and improve.”
Born in Johannesburg, Kenny spent his early childhood in the Free State, in a small town called Vrede. “I come from a large family of eight siblings,” he says. “So when it came to the younger ones, it was easier for my working parents to send us to my grandmother in Vrede.” He also spent some time in the Eastern Cape, though the bulk of his growing up was done in Johannesburg, his city of birth.
Crisis in Johannesburg
Kenny’s interest in finance came about more by chance than by design, as he actually studied mechanical engineering. After the 1994 elections, Kenny returned to South Africa from Zimbabwe, where he had studied, and joined the public sector by taking up a position at the City of Johannesburg. Although he was initially responsible for infrastructure, Kenny says his responsibilities forced him into the finance arena. He developed a keen interest in issues of finance and economics, so much so that he concluded an MSc in Financial Economics through the University of London and an MBA with Wits University during this time.
When the Minister of Finance and the MEC for local government in Gauteng established a new committee to get the City of Johannesburg out of trouble, Kenny became the chair. Initially called the Committee of Ten, it was renamed the Transformation Lekgotla and its lifespan was extended. Its objective was to address the financial crisis facing Johannesburg, and it was in doing this that Kenny’s career in finance took full flight.
“The crisis, if left unresolved, would have resulted in the City of Johannesburg having a deficit of R2.5 billion by the end of that financial year, and it was only a matter of time before the city started to default with creditors. It was struggling to raise capital to fund infrastructure programmes. If a city can’t invest in infrastructure it becomes run down. If you compound the inability to pay creditors and deteriorating infrastructure, it’s a recipe for disaster.”
Kenny says this forced him to take a keen interest in financial matters, ensuring he understood the implication of bad financial management on the overall functioning of the city and its long-term sustainability.
The work of the committee was tough and didn’t go unopposed. “We had a tight deadline and we met a lot of resistance. People were used to the spending taps running endlessly. The paradigm in the city was very interesting at that time: the approach was always, how much can we spend in what areas, and thereafter, how are we going to fund this? What rates and tariff increases would be required? It was the exact opposite of how the city, or any business, should’ve been managing its expenditure.”
There was also plenty of union resistance and political interference: “The unions tried to stop us, and there was massive opposition within the ANC alliance. People saw the restructure as a precursor to privatisation. But we believed in what we were doing and this helped to focus the mind and gave us the added energy, stamina and resistance we needed to do what had to be done. Ultimately, we were successful. The city never defaulted on any of its debt and we avoided a financial crisis. The city even began to generate surplus.”
Fast-forward a few years to 2006, after three years of running the organisation Business Against Crime, Kenny joined Standard Bank. “When the bank is willing to take risks on you and you prove yourself, the bank tends to be exceptionally good to you,” says Kenny, who enjoyed an impressive career at the bank in the last decade, among other roles heading Corporate Banking and Client Coverage within CIB. “The bank has been good to me.”
Kenny was hired to run and turn around a division called Financial Asset Services (FAS). “I joined the bank not knowing anything about banking. They took a risk on me,” he says. “They gave me a business that was in high care – it was out of ICU but still in high care. They didn’t give me that business to run because I was an expert in it, in fact I knew nothing. They gave it to me because I brought with me enough leadership experience and depth of dealing with sick functions and sick businesses. They saw my experience at the City of Johannesburg as invaluable in turning their business around. Sometimes, we don’t take risks on people because we are looking for a perfect individual who knows everything, instead of identifying people’s strengths and considering where they can add the most value - and giving them a role that plays to their strengths and gives them the greatest chance to be successful.”
When Kenny took over, the situation was pretty bleak. “Staff morale was low. People felt like second-class citizens,” he recalls. “The total revenue generated by that division was R350 million per annum. The business reported to the head of legal, which was quite odd. Even though I was not a banker, it became obvious to me that there were certain things that needed doing to reposition this business."
"I came up with an idea called FAS 500, where I said we could take the business to making R500 million in three years. People thought I was crazy. Of course I was a bit crazy. But the point of the exercise was to prove that this was potentially a very big business with massive growth potential and opportunities, if only we could focus our minds on achieving that.”
It was about being optimistic, Kenny adds, chasing the bigger picture and asking what could be done differently. Within just a few months, all everyone could talk about was FAS 500, and Kenny says this became the mantra. It was at this point that Kenny broached the subject of a name change for the business, and so Investor Services was born. “When I look back, that business is now substantially bigger and is one of the key businesses within CIB, and one of the anchors of its product group. That business has close to 50 percent of market share now in South Africa. I’m really proud of that. The name and ambition has been retained over the years.”
According to Kenny, the global financial crisis was a big turning point for the bank, especially as far as growing into an emerging market bank was concerned. At the time, he had only been with the bank for two years. It was also a learning opportunity for him.
“The crisis forced me to rapidly grow my understanding of what can go wrong in the bank and in the business I was responsible for,” he says. “It was extremely useful in accelerating my own understanding, growth and knowledge. The financial crisis hastened this learning for me.”
The crisis brought about a change in CIB’s strategy, in particular the drive to be a business that sought to do business across Africa. “When we shifted to focus on Africa, our own vulnerabilities became visible,” Kenny says. “We realised we had to perform well in the larger markets in Africa. Suddenly we could see that we weren’t where we needed to be. It was a very useful turning point for the business because we could now focus on that.”
“CIB is one of the most exciting businesses to work for”, says Kenny, calling the opportunities for growth “amazing”. He says: “We are a large business in South Africa and have a dominant market share in some products. Despite this, we continue to grow, even in an economy that is close to recession. If you do the right thing, clearly the opportunities for growth are massive. These prospects for growth excite me.”
Kenny says he looks forward to changes currently taking place in the bank and the increased clarity of thought around the group’s strategy.
“I think in many aspects we are holding ourselves back. We are aggressively embarking on a journey to leverage our capabilities for our entire client base. In terms of impact, this is massive. We can have comprehensive and holistic solutions for our clients."
Culture changes and the issue of digitisation are also on his radar. “You can’t innovate in a silo. Leveraging our digital platform has become key for the bank, and we are now aggressively driving digitisation.” This, he explains, is about embracing new technology and incorporating mobile more effectively and widely. It also includes artificial intelligence and more automation. Essentially, it is about embracing new ways of doing things. “This helps us to innovate and mine the data we have more effectively.”
By Toni Muir
This article first appeared in CFO Magazine
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