When was The FD Centre started and what services does it provide?
The FD Centre South Africa, which is part of an international consultancy, was started 10 years ago in 2010. Since then the firm has flourished and grown to become the market leader for outsourced finance directors’ and chief financial officers’ services in South Africa and globally.
What is the CFO role in business today?
The CFO role is no longer number crunching and producing spreadsheets. Nowadays a lot of that role is done for us through computer programmes, which will get more efficient as time goes on.
The CFO’s role is to distil that information and look at what’s critical for the organisation to help management to make decisions about the future. It’s about leadership – helping the organisation’s exco understand what the numbers actually mean and how to interpret the numbers as a road map going forward and which routes to follow.
Who would a typical client be?
Typical clients are entrepreneurs – owner managed businesses in the midsize space – with approximately R30 million to R1 billion turnover per annum.
These are often the people who have learnt some of the lessons in business as well as some of the knocks. Generally, these businesses are now ready for ‘scale up’ or entering a ‘restructuring phase’ – or some other big change has happened, and they need stronger financial acumen in the business.
Why should businesses use CFOs?
Finances are key to the future of driving the organisation. The CFO is integral as he or she is giving advice and acting as a sounding board for the CEO, as such the CFO needs to have other advisors or objective viewpoints that they are receiving, from the outside, from organisations like The FD Centre. Because we have a range of clients across a wide array of industries and focused on different parts of the value chain within a particular industry, we are better equipped to observe the bigger picture. As a result, we are able to draw from a deep pool of knowledge and practical experience, when we do give advice. We have a presence in twenty countries around the world, which enables us to draw on both international and local experience to provide the right insight and foresight for our clients.
What are some of the challenges faced by businesses in response to the Covid pandemic?
Currently we are in a time of huge uncertainty and change. We need to be agile, adaptable and nimble so that we can move and shift with the changing times.
Certain industries such as retail have been forced into massive change and have needed to shift focus to online trading to survive – however the change in market trends were there before Covid.
Many industries won’t go back to the way they operated before. Everyone has been forced to look long and hard at their business models and understand how their industry and value chain has been affected. It always starts with a big picture – what is going on in the economy, what is going on in my industry and how does that effect my business?
What interventions have you implemented?
We have put together a programme called survive, revive, and thrive again. In the beginning of Covid it was about survival and how do we protect cash in the devastation caused to the economy. The second part is more about rethinking your organisation and what you need to do to adapt or ‘pivot’ your organisation in a different direction if required.
A big part of this process is simply listening to your customer and observing how their needs may have changed, and if so, then shifting your product or service in the right direction to more appropriately meet those needs. The last part is thriving again, becoming future proofed so that your business can be sustainable.
We have developed a business toolkit which helps CFOs deliver best practice, called the twelve boxes model, which has three layers – strategic, operational and business support. In order to be successful, it is necessary for a business to have a strategic focus, this is where the CFO can help build a road map including considering future scenarios. Only having an operational focus won’t sustain or grow your business significantly, more especially during Covid times.
What are some specific actions businesses can implement to be sustainable?
The future is uncertain, but it is about consolidating where you are and looking after your people – that is paramount. A business is not just comprised of its assets – it’s the people and empathy for your people that is key to driving the business forward.
And of course, looking after the fundamentals – strong financial management, protecting your cash, making sure that the cash flow is sound. The business model needs to be robust and future proof. Look after stakeholders generally – customers, suppliers and shareholders who are important for the future success of your business. My sense is that we are going to emerge from this as a changed society; one that is more about collaboration and co-dependency as we journey forward.
For more information contact: Rowan De Klerk,
The FD Centre South Africa,
M: +27 (0) 82 901 7633