financial executives Archives

Five ways your interim financial executive can help you expand into Africa

The African growth story is an exciting one, dotted with giant forward leaps and unexpected dips. It holds the thrill of an under-exploited market, and represents huge diversity that is still shrouded with mystery for many. Many international brands choose South Africa as a springboard for growth into the rest of sub-Saharan Africa. Over the past year, Hilton Hotels, Airbnb, Cotton On, H&M and Forever 21 have been just a few of the mainstream international brands making an entrance into the continent via our shores. Theoretically, this means companies like yours — that were founded and established in South Africa – are one step ahead. Already successful in the South African market and more familiar with their neighbours than non-African entrants, many SA-founded companies are perfectly poised for expansion into the rest of Africa.

However, it only takes one attempt at doing so to realise that this is no light undertaking. The first lesson to learn is that categorizing the “rest of Africa” as a homogenous ‘other’ is a foolhardy mistake. Every African market is vastly distinct from its peers, and it takes expert insight to understand the market you’re entering. At times like this, an interim financial executive can act as a subject matter expert and partner during the expansion process. Here are some of the insights an interim financial executive can offer as you weigh up the possibility of expansion in Africa.

Understanding the GDP

Anyone can google the GDP of an economy, but your interim financial executive will know what the numbers mean for your business. For example, Nigeria, with its Gross Domestic Product of $522-billion has recently officially overtaken South Africa’s GDP $351-billion to bag the title of having the largest GDP in Africa. Does that mean your company’s market would be more buoyant in Nigeria than SA? Not necessarily.

South Africa’s wealth per capita is double that of Nigeria, at $6 600 per capita here versus just over $3 000 in Nigeria, according to World Bank 2013 figures. Your interim financial executive can further help you understand the cost of overcoming infrastructure and transportation limitations in your host country. Understanding the GDP means knowing how likely people will actually purchase your product in the new country, not just how much money is collectively amassed in the country.

Understanding who the big players are in the new country.

Your interim financial executive can help you know who is already established in your space, how long they’ve been there for and what they did to get there. Knowing your competition – and how they prosper – is key to your own strategy and survival plan.

Knowing the labour market.

Your interim financial executive can research and help you understand things such as wage and salary trends, and what they mean for your business. Assuming that you will be able to find and attract the right talent in your new host country, how much will it cost you to keep the human resources you need? Can your company afford to pay employees what they will expect to receive, in light of operational and capital costs? Your interim financial executive will be able to analyse these possibilities and answer these questions.

**Becoming au fait with tax requirements.**

If you thought doing tax in South Africa was a headache, try navigating a completely different set of tax requirements in a foreign country where the system is likely much less sophisticated. Your interim financial executive will make it his job to get to know the ins and outs of the system, what the reporting requirements are, how your company needs to comply, and when.

The nuances around paying employees and suppliers.

In South Africa, you may be used to a “30-day from invoice” expectation with your suppliers. In the new host country, suppliers may demand cash on delivery. You might be used to paying employees via bank transfer, whereas your host country may require cash payments for many of your workers. Your interim financial executive will get to know the local way of doing things, and help gear up your company with the right systems, processes and checks to make this work.

Expanding into the vastly under-explored continent of Africa is both daunting and bright with opportunity. With the right partners assisting you, it can be part of a fulfilling and successful endeavour. Contact The Finance Team to find an interim finance professional who is willing to travel with your company and become your sounding board and partner as you take the leap.

October 22, 2015 / No Comments /

Chevron’s Pat Yarrington: Lessons from a top female financial executive

Happy August! In recognition of Women’s Day this month, we’re looking at what we can learn about female financial executives across the globe. We will spend the next few weeks gleaning insights from some of the best female financial executives around the world.

Historically, finance has been a male domain, and while demographics in the workplace have evolved, top financial executive positions are still largely held by men. As an example of this: Out of the top 500 companies on Fortune’s list, there is currently a grand total of 58 female chief financial officers. That means 11.6% of the top financial executives in the Fortune 500 are women, and almost 90% are men.

Companies ‘unwilling to deviate’ from the norm

The female representation seems a paltry amount, but it’s actually an improvement on previous years. A similar analysis conducted in 2010 revealed 14 less women than there are today, and the current figure is 30 financial executives more than there were in 2000. So the direction is right, but progress has been incredibly slow, with only one more top female financial executive on the Fortune 500 than there was last year.

Two possibilities could be drawn from these statistics: firstly, women could be shying away from financial leadership roles; or secondly (and, as history as shown, the more likely scenario) companies remain hesitant to deviate from the traditional profile when it comes to top leadership. Employment Equity laws in South Africa have induced more female representation at the most senior levels, but this often takes the form of human resource and corporate affairs, rather than the CEO, CFO or operations management roles.

Still, some of the most successful and established companies on Fortune’s list have taken the “gamble” and have female financial executives at the helm. The success of these companies attest to the fact that these women add a unique dynamic that is helping their companies see ongoing progress and growth.

We’ll be running a short series of blogs looking at a few of these remarkable women this month, and some lessons we can learn from them. First up is Pat Yarrington, the CFO of Chevron, which ranks third in the Fortune 500.

Pat Yarrington

Yarrington has worked for the petroleum giant for more than 30 years. During that time she’s held various operational leadership positions, including heading up Chevron Canada, and running the company’s strategic planning division. In addition, she’s a director of the Federal Reserve Bank in San Francisco. She became the CFO of Chevron in 2009 and steered the company through some of the lowest points of the recession. A company that traditionally makes its money from fossil fuels, they had to weather the increase of the oil price and the emergence of alternate energy forms. Yarrington’s philosophy through all of this has been to adapt quickly and think long term. While she sees a firm future for fossil fuels, Yarrington says there’s an opportunity for Chevron in clean energy. “It’s good for our shareholders and good for the economy,” she says.

Support and mentorship

When asked how she made it to the top as a female financial executive in a male-dominant environment, Yarrington told the Wall Street Journal: “It’s a whole series of things. In my life I had a number of people who were important and who set certain expectations. You start with your parents — they always said, “You can do anything you want to, just put your mind to it.”

I married an individual who’s very supportive of having a wife with a career. I have three great kids, and at various points when the decision came — should mom take this job if we have to move? — they basically said yes. If they had said no, I wouldn’t be sitting in the chair today. I also had two or three people that I can very discreetly point to, who gave me chances when they didn’t have to. I will also say I performed when those chances were given. So it’s that whole complexion that has gotten me to sitting in the chair today.”

Yarrington also pointed towards the importance of having a mentor who believed in her. She remembers being sent on an important assignment after only being in the company for a few years, and not feeling up to the task. Her boss at the time said: “Look, Pat, let me just tell you. Anytime I ask you to go into a room and represent me, I have complete confidence in you, and I expect you to take your full seat at the table. You are just as bright, just as capable, as anybody else you will meet. Never forget that, and always make sure your voice is known.”

Yarrington said: “That was 27 or 28 years ago. I think about that almost daily.”

If you are looking for decisive leadership from financial executives in your company, contact The Finance Team. We have formed a network with remarkable men and women who are both highly qualified and experienced. They can provide you with financial assistance on an interim or part-time basis as you need it.

Image credit – www.frbsf.org

August 11, 2015 / No Comments /

Financial executives: The gummiberry juice you need to get your business going

The days are long for a business owner, and the nights are even longer. Daytime sees you working extended hours, juggling several responsibilities. When night time comes, sleep is crowded out as you wonder about the big things: where the company is headed in the long run, whether it will be able to survive the lean times, whether you can afford to keep your staff compliment, how well you’re stacking up to the competition … The exhilaration of being your own boss has a payoff: you feel like the world rests on your shoulders. It can be overwhelming and exhausting trying to answer all the questions yourself.

You or your children might remember the eighties classic kids’ TV programme, Gummi Bears. Ordinary forest bears would go about their lives trying to do good. But sometimes they faced dangers – and they needed more than their own capabilities to make it out alive. At the crucial moment, they would gulp down some “gummiberry juice” – a magic potion that gave them the power to bounce away from hunters. If the thought of some of that gummiberry juice sounds appealing, I’ve got a welcome message for you: we’ve got some. It doesn’t come in potion bottles though – it comes in the form of highly capable and specialised financial executives from The Finance Team.

The Finance Team was established in recognition of a growing need. There are companies all over the country that have great ideas and motivated leaders. But they need a little “superpower” in the areas where it matters most. They need the proverbial gummiberry juice to help them understand the risk their companies face, how to bolster their cash flow, how to optimize their operations and how to attract new investment. In short, they need the help of seasoned financial executives who can offer skills, insight, and experience. These companies need the type of financial executive who has travelled their road before, someone who is willing to be a sounding board and a partner when it comes to making strategic decisions for the business, but someone who will respect the way things are done in the company and not try to steer things in their own direction.

There are three different types of financial executives, each bringing their own flavour of ‘gummiberry juice’:

Financial executive one:

Financial director. Call on this person if you need financial leadership at the highest level. If you’re wanting valuable input to board meetings and strategic financial guidance, look at getting a financial director on a part-time or ad hoc basis. This way, you’ll get the level of assistance you need without having to pay another senior salary fulltime.
Financial executive two:

A part-time or interim financial manager. You need a financial manager if you’re juggling too many responsibilities as a business owner and/or you don’t have a specialist financial qualification. This person can take over the responsibilities of planning, organizing, leading and controlling the company’s finances. They’ll make sure there are no bad surprises at month end or when you decide to expand the business. They should be there as often as you need them – and no more.

Financial executive three:

A project accountant. Call on a project accountant when you’re rolling out a strategic project that needs to be a success. Your project accountant will create a realistic expectation around costs, track them and ensure the work is completed within budget. They’ll show you what’s costing too much and who’s working efficiently too. You can help draw on their reports to ensure your ensuing projects are just as successful.

As a business owner, it’s a huge relief to know that you can surround yourself with the best team mates and get the support you need. From time to time, everybody needs a little gummiberry juice to stay on track. With TFT’s financial executives, you’re sure to find it.

Image credit – www.aspira-training.com

June 10, 2015 / No Comments /