The founders of FirstRand, one of South Africa’s largest financial services groups, were lauded for paving the path for young leaders in a recent BizNews Noontime Thursday webinar. Back in 1993, says Paul Harris (now chairman of Rain), fellow founders Laurie Dippenaar and GT Ferreira battled to find youngsters who could close a deal. So they ran a controversial ad campaign saying that RMB (the corporate and investment banking franchise of the FirstRand Group) “does not employ CAs”. They attracted a host of diverse young talent, from doctors and lawyers to CEOs in a programme called ‘Class Of’ which is still around today. The three men were hands-on in turning smart entrepreneurs from non-financial backgrounds into industry players. One of those individuals was Michael Jordaan, former FNB CEO and junior partner to Harris at Rain. Here, Jordaan as well as Adrian Gore, founder and group chief executive of Discovery Limited, share their thoughts about the leadership of Ferreira, Dippenaar and Harris. This is part of a four-part series based on the full webinar, below. – Nadim Nyker
Business leadership: Advice from the best
Alec Hogg: I had a chat with Michael Jordaan this morning, and this is what he had to say about you guys.
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Michael Jordaan: Alec, thank you for giving me an opportunity to use this forum to say something about the three individuals that you’re talking to today. They have made an immense difference in the lives of thousands and thousands of people in South Africa.
If I could say something about them first individually, GT is seen as the strategist supreme, who plotted the course of first RCI then RMB, then FirstRand. He’s an excellent dealmaker and the biggest one must be acquiring FNB and Southern. While he will joke that his counter-party was the most difficult person to do a deal with ever, GT eventually overcame those objections. He is a storyteller, but they’re not just ordinary stories, they always impart wisdom.
For Laurie, one immediately knows that he is a clear and logical thinker. In many business situations, he would reduce complexity by asking the simple questions that everyone else was too afraid to ask. I can relate that in many stressful situations, calm would appear in the room simply when Laurie entered because one knew that when Laurie was there, the decisions would be predictable and they would be sound.
Then finally, Paul. Paul in his nature is a trader who always sees opportunities and not the downsides.
He’s a great start-up enthusiast and, of course, that has been infectious to the people around him. The way he approaches innovation is that there’s always a clever way of doing things.
I’m very proud to be a junior partner in our venture called Rain.
A message collectively to these three incredible gentlemen is the legacy that they have already left behind. In that legacy, I’m are not just talking about FirstRand as an institution, but maybe more importantly, the philosophy around FirstRand and the empowering culture which they created so that people can actually surpass their own expectations of themselves. Leaving behind them meritocracy where it was the best idea that always wins. Through empowering, setting up other people to succeed, I can truly say that anyone who has done well in FirstRand has only done so by standing on the shoulder of these three giants.
How to hire the right people
Isn’t that a lovely little comment, the wise, the enthusiastic and the calm. If you were to critique what Michael had to say, I’m sure that you wouldn’t really be able to find much wrong in it, but you know each other better, has he got it wrong some way?
LD: Sounds fair enough to me!
GF: I’m very happy to say what he said is true. I’m not sure, I’ll go with it.
It’s great that someone like Michael has worked with you, succeeded with you and still a young man and gone on to do other big things. One of the innovations that you introduced, it maybe is not that well known was the ‘Class Of’ – where did that come from, and what is it exactly?
PH: I think it was way back in ’93, we had a problem that we were very successful in the dealing room and we had difficulty in employing people that were really good. The problem was that if somebody had 10 minutes experience in the industry or they had been a good motor car salesman or something like that, we just brought them in and they would sit on the dealing desk and before you look again they had made a lot of money and they were good at what they did.
Then we said, well, what about the pipeline? What about people in the future? Shouldn’t we really start building up a group of younger people that could network amongst themselves, that have got a diversity of skills and that came from very diverse backgrounds? Let’s start making opportunities for them. What we did is we put out an ad. I’ll never forget it, it was “RMB does not employ CAs”. Just about the first 50 replies, we got was from CAs to say, you know, why don’t you employ us, and so on and we said, no, we want people that think different.
If I was a youngster, I’d make sure that I’m good at tech and you could use that to improve your yourself and your company you work for.
As a result, we had engineers, doctors, lawyers, we had a lot of CEOs as well, applying. The criteria we used was that they had to be the best, they had to be leaders, had to have academic backgrounds, all that type of thing. We always joked that we would never have jumped through all those hoops ourselves.
We managed to employ some really, really good people, and we created a programme where the senior people, and I as the CEO, was very involved in it, that we spent a lot of time with these young guys. They were brilliant academically and in every way. That was effectively the next level of people within sort of five years or so that came through. In fact, one of the very first guys on the programme was Michael Jordaan. That was the origins and I’m glad to see that it’s still going.
LD: Paul introduced it and I honestly think that it was something that influenced the destiny of the FirstRand. Obtaining this talent at a young age and keep and retaining them. Over time they entered leadership positions. It’s really been a dramatic impact on the group.
Doing what’s right for business, society
It’s interesting that it wasn’t just the intrapreneurs, GT, to do what you were saying earlier, but you also found people outside that you invested in, probably most famously, Adrian Gore. Here’s his message to you.
Adrian Gore: I wanted to make a few points about Laurie, GT and Paul. For sure, they were the heart of the success of Discovery. Laurie was a chairman and a mentor to me and I work closely with him, who I count as a very close friend as well as GT and Paul. They are the most remarkable people. They are business leaders of a different calibre, in my view. They are excellent shareholders, they are long term shareholders.
More than that, they value truth, they value real societal impact and they have incredible wisdom. They pursue what is right for the business and for society.
I found my interactions with them in my career with them incredibly inspiring, Discovery and myself developed because of my interaction with them. I’ve had the pleasure of working with some of the best companies, that’s been a Discovery model as we’ve globalised, our partnership model but I have to say that I’ve never met people of this calibre. I mean that they are unique in their impact. It’s been an absolute pleasure working with them and I hope to do more in some way.
That’s Adrian Gore, the founder of Discovery. Just an interesting point on that, Discovery is in financial services, FirstRand is in financial services. In a way, you were creating a competitor. Were you all in agreement to fund Discovery in the early days?
LD: Maybe I can answer that because I think I was the one who originally brought the proposal to RMB. We should remember that it started as a health insurer only, so they weren’t in competition with us. However, after a few years, Adrian came to me and he said, it’s not a good thing that we rely so heavily on health insurance. It’s a highly regulated industry. We need more strings to our bow. He then said he wanted to go into life insurance, but we already had Momentum. I said, okay, just make your case for that and he made a very, very persuasive case with the products that we’re going to produce.
Our thinking was then, we don’t own 100%, we can’t hold him back. It would be unfair to the minority shareholders and also is fighting against each other, you hope can be one and two. It’s funny enough a philosophy that we’ve now pursued, which you won’t read in any business book or MBA course.
We allow other companies to compete. We’ve got three or four companies doing life insurance, two doing health insurance, three, doing short term insurance, it is good for them. If you suppress competition, you’re saying we can’t compete.
It’s not dissimilar to what SA Breweries did initially when they let their beer brands compete. I must say, it has never called us a problem at all, but it is an unusual business philosophy.
Audience member: Yes Laurie, innovation is still strongly encouraged within the FirstRand group. Do you have any plans to put together a book on how FirstRand came together and the lessons you learnt along the way? I think it would have many lessons that people and business leaders would learn from.
PH: A lot of people have spoken about that. No, it’s nothing we’ve really seriously, well, I certainly haven’t seriously considered that.
Lifting people from poverty: The big SA challenge
Audience member: South Africa has nearly four million poor and unemployed people. What are the three things we need to be done by whomever that can fundamentally shift our economy, our country and people’s lives permanently?
PH: I would say the first one is we have to have a law and order. We have to have faith in the legal system, we have to address crime, trade law and order. Law and order will get rid of corruption and that type of thing. I mean, corruption is stealing from the poor and the only way to do it is to have a proper legal system and people to get behind it.
Read also: SA success story: FirstRand founders share how they forged a strong relationship
GF: I think we can only get there through growth in the economy. The government, instead of putting obstacles in the way of business, should encourage business. The government has got a very big role to play, but there is sometimes a way of stifling business.
There should be more encouragement for businesses to grow to start, even if you actually take all the red tape away from even starting a little company, etc.. If you look at other countries, we can go straight to Singapore and then also to others. How long does it take to start a company? How long does it take to jump through the hoops? Obviously, a business also to be more involved with governments that we work together in growing the economy. That’s about the only way that I think we can maybe not totally eradicate poverty, but get rid of the inequality there still is.
LD: I’m going to state the obvious, to lift someone out of poverty, they need a job and you get the job, you need to be employable and to be employable, you need to be educated and/or skills. OK. It is that obvious. I just want to touch on the skills side because we all know the importance of education.
Think of somebody that has got a South African driver’s licence, they double their chances of being employed. There are many skills, people can be taught, non-academic skills, practical skills, welding, plumbing, whatever it is. We know very well geared to that, but the core of our problem is everybody points out our inequality.
Of course, we will have the highest inequality in the world – if you’ve got the highest unemployment in the world, per definition you will end up there. It’s about being employable and that as I say, you need skills and/or education.
Audience: What are the promising industries to be in as a young professional?
PH: As you may know, I went into telecommunications, we started Rain, which to the data network. It opened my eyes to a totally different industry. It’s a massive industry and I just think that things in the technical field are probably the strongest at the moment.
The industrial revolution is a bit of a cliche, but I think if you look at the trends of what’s happening around the world and Covid, if ever there’s been an example of how technology can change things. I’m not necessarily saying for the better, but it’s enabling so much more. The fact that we’re talking even now, we’re going to continue doing it. Things related to tech. One of the things that we have been strong on is people should learn keyboard skills.
I wish I’d learnt keyboard skills as a youngster and really get to know the tech because it’s not so much being in the tech business but to use tech to enable your business. A lot of businesses are going to be using tech to become better and if they don’t, they might go by the wayside in the new environment. If I was a youngster, I’d make sure that I’m good at tech and you could use that to improve your yourself and your company you work for.
Follow your dream
LD: I say go into an industry which interests you, which you might have good skills for, which you love. Just figure it out if it’s not a total dead end. You might be someone that loves gardening and you quite artistic and now you want to become a landscape gardener.
You could go into tech and be miserably unhappy or rather go into landscape gardening design and making a decent living… I don’t want to write off other industries other than saying if something is clearly going to disappear, that you try and avoid that. A case in point Alec, your industry, which is a battling a bit, which is journalism. I think journalism isn’t going to disappear in its entirety, it’s just going to be there in a different shape. I wouldn’t still urge someone to go into something completely alien to them if they really have the writing skills and love journalism.
PH: I think Laurie stole my thunder a bit, but I agree wholeheartedly with that statement. Instead of saying you should go into these industries, I would say follow your dream. If you land up in an industry that you do not really like at five o’clock in the afternoon, you’re going to look at your watch and think about what am I going to do after work?
Whereas if you get into an industry which you enjoy, which you find interesting, etc, you won’t look your watch at five o’clock, you’ll probably only look at it at seven o’clock and so on.
You will not make a very great success of any job unless you put in more than eight hours a day because there are other people that are competing with you that are prepared to do that, follow your dream and enjoy what you’re doing.
That’s what I say to 20-year-olds and even my own son, advice that I would give him. So that you enjoy what you’re doing and try to become the best that you can in that particular job, whatever it is.
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