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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.

 

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October 22, 2015 / No Comments /  

Babysitting or nurturing? The role of the Interim Financial Executive

Last weekend, friends of ours attended a wedding. True to South African tradition, it went on for longer than a work day! Our friends have a one-year old child who needed to be babysat. They decided to share the load between two sets of relatives. The first relatives would do a shorter stint, taking the baby from 2pm to about 5pm. The second set of relatives would do the long haul, taking the child from 5pm until when my friends returned home late that night.

The next day was full of very contradictory feedback. The first set of relatives had had a wonderful time with the child. They had fed her sweets and cake and enjoyed an afternoon with her at the park. The second set of relatives were much more somber. Their evening started out okay until the baby came off her sugar high. Thereafter, there was non-stop screaming. Eventually they had phoned the baby’s parents and told them they needed to come home early from the wedding because the child was inconsolable. The babysitting experience had started well with her interim caretakers, but after the transition to her “long-term” caretakers, things went downhill and quickly became unbearable.

Unexpectedly enough, my friend’s anecdote about babysitting can teach us a thing or two about the importance and role of the interim financial executive.

Babysitter or interim financial executive?
One could say that the first set of babysitters played the role of the interim financial executive. Their job was to take care of the baby (read: the company) until it was appropriate for the longer-term babysitters to take over. The second set of babysitters played the role of the more permanent leader, or long-term financial manager.

Even though the interim caretakers only looked after the baby for a few hours, their actions had a definite impact on the well-being of the baby and also the type of job that the following managers would inherit.

So the interim babysitters decided to stuff the baby full of candy. It was a short-term solution, making the baby happy and cheerful for a few hours, but later translated into chaos all-round. Ironically, by this time the interim babysitters had taken leave of the situation and were not there to see the epic meltdown or pick up the pieces in the aftermath.

In the same way, an interim financial executive will only have responsibility for the finances of a company for a short period of time. Whether they’re called in as a project accountant, an interim CFO or financial manager, their task is to manage the company finances for a limited period and then pass on the baton to someone else. Bearing this in mind, your task as a hiring manager is to find a professional who is not going to ‘stuff the baby full of candy’, so to speak.

Being willing to forego the candy
Like in the babysitting example, the effects of the management of an interim financial executive will often only be felt after he or she is gone. And, as in the baby analogy, an undiscerning business owner might not even recognise the harmful effects of bad interim management for what they are. At first glance, the interim babysitters did a fantastic job: the baby was happy and their period of management was concluded peacefully. Only later did one realise that their ‘management style’ had actually been harmful to the baby.

Likewise, watch out for interim financial executives who take the ‘band aid’ approach. Some interim leaders see their job as merely to stay the tide while they are in the role. Instead, look out for an interim financial executive who is willing to take the time and effort to make good, strategic decisions for the long-term welfare of the company.

Instead of hiring an interim financial executive who will try to fit in with the old status quo, look for one who is willing to respect the way things are done while simultaneously being confident enough to give new suggestions. Look for someone who is motivated not to keep the peace, but to do what’s best for the company in the long-term. In short, you’re looking for a person who would be willing to forego the candy and feed your company brussel sprouts instead.

If this advice sounds credible, but you’re not sure where to find such a person, contact The Finance Team. We have a team of highly skilled and trained interim financial executives who are motivated to make the best decisions for your company long-term.

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Image credit : © Stephen Denness | Dreamstime.com

 

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September 3, 2015 / No Comments /  

Your business and the interim executive

Your financial year-end is approaching, you’ve got a calendar dotted with project end dates and business is going at a rapid pace. Just when you think things couldn’t get any busier, the unthinkable happens. Your financial manager resigns.

Of course, he’ll work in a notice period, but that won’t cover all of the occasions wherein his input was not only assumed but relied upon. There are a number of decisions to make and projects to lead, and all of a sudden there’s a gaping hole without his involvement. Deadlines still need to be met, and it’s up to you to ensure that there’s somebody filling that space in order to meet them.

Your options are limited. Do you hire in a hurry? Your outgoing financial manager would be expected to provide some high-level training to the new incumbent, and the newly-appointed manager would need to pick up the reins rather quickly. A quick, successful transition would be ideal, but experience has taught you that occurrences like this are few and far between. You are far more likely to cycle through swathes of CVs, set up what feels like hundreds of interviews with hopeful candidates, and then agonise over a short-list before realising that none of the people you identified are suitable, and start again. There will be psychometric tests, panel interviews, one-on-ones. The CEO will develop a liking for one candidate, you’ll prefer another, and the board will be punting for a third person altogether. You know that eventually you’ll find the person you’ve been waiting for, but how do you plug the gap in the meantime?

The answer, for an increasing number of HR managers, is to bring in an interim executive.

But who or what exactly is that?

Interim executives are qualified professionals, often with impressive resumes and credentials, who provide high-level service to companies on an ad hoc or short-term basis. Interim executives are typically very experienced, senior individuals who have chosen to leave the corporate world for lifestyle reasons or due to lack of opportunity in their previous roles. Some are attracted to the interim role for its diversity or as a way of meeting their desire for regular change in their environments.

After all, they are expected to step into a given role, assimilate their new surroundings and the requirements of the new job within a short period of time, and begin being almost immediately productive. As part of their job requirement, interim executives must also be prepared to thoroughly hand over to the person who follows them – often the permanent employee who will be taking up the role long term – without trying to undermine the success of the incumbent and instead with a genuine desire to ensure seamless continuity. The role of the interim executive is to keep all the company’s existing balls in the air, and efficiently prepare the way for a successor. They step into their role with the end in mind – in this case, the successful handing over to someone who has been thoughtfully chosen as a permanent appointee to the position.

The difference between an interim executive, and the manager for whom you may spend weeks or months hunting, is their ultimate ambition or goal within your company. Your permanent employee should possess a desire to establish lasting relationships, and root him or herself within the business. His desire would be to grow within the business and move up the corporate ladder internally. Your interim executive has a different measure of success. If he or she can carry out a handover that allows the company to keep functioning at the same level at which it was before, with the same level of efficiency (or more), then his or her job will be considered well done. The interim executive holds no desire to be permanently appointed or be considered for succession planning within the business.

For that reason, an increasing number of HR managers are looking to fill important roles with interim executives while they search for the perfect full-time candidate. Other companies are opting to make use of interim executives on an on-going basis. They get ad hoc assistance in the areas they need them, without the expense or labour law burdens that come with a permanent employee.

If your company needs interim executives in the financial space, The Finance Team can provide a solution. We have a network of highly qualified financial professionals who provide interim assistance to companies who need them, for the period of time that they are required. Give it a try and see your burdens immediately lightened.

Image credit: rh-partners.ru

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December 22, 2014 / No Comments /  

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