🔒 SA success story: FirstRand founders share how they forged a strong relationship

FirstRand is one of South Africa’s largest financial services groups. It was built by partners GT Ferreira, Laurie Dippenaar and Paul Harris. Their story is shared with BizNews community members in a webinar hosted by BizNews founder Alec Hogg, who asks: where did it all begin? And how did the three-musketeer relationship stand a more-than-four-decades test of time? Well, for starters, their wives got along. The entrepreneurs also talk about how a value system was followed where the business case prevailed over personal prejudice. They discuss how this approach allowed them to embrace their weaknesses, while playing to their strengths. This is part one of a four-part series (you can listen to them share their story or watch the full webinar, below). – Editor 

Alec Hogg: Give us some insight into how you divided the roles from the day you decided to go into business together?
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LD: Strategy was a collective thing, always, because it’s so important and needs as many viewpoints as you can. The one thing that GT kept to himself and rightly so, because he was the best negotiator by far, is all the big deals were almost single-handedly negotiated by him.

GF: I don’t think that’s 100% correct but I will rest it at that for the moment. Right from the beginning, the roles changed over time as the company grew and we all contributed at different points and in different positions. As you know, I was the CEO originally. Laurie took over from me and then Paul took over from Laurie at the RMB. Laurie was more of the financial guy that kept us on track, but it was a collective effort through the years.

How did you find each other? Many people are friends at university or thereafter, but to stay friends in the way that you guys are and business partners for so many decades…

GF: After the Bank of Johannesburg, we started a company called Magnum Leasing. Then at one stage decided that I needed to start a new company or find new partners. I knew Goss very well from university. I then approached Pat Goss who at that time worked with Laurie and introduced him to me. Pat and I were at varsity together, and Laurie. After that, it was a threesome. Then Pat’s father passed away three months after we started out and subsequent to that, he had to go and help his mother run the Goss businesses and Paul joined us. That’s how the connection came. Paul was also at university with Pat and me, we knew each other from there. He worked at the IDC with Laurie, so that’s how the core got together.

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But how did you stay together?

LD: It was honestly nation firstly on mutual respect. Secondly, we definitely had the same value system, which is critically important. Thirdly, our wives got along very well, that helped. We loved the same things, all love sports. We attended the Olympic Games together with our families and that type of thing. It doesn’t mean we never had the differences of opinion, but the debates were always extremely civil and a case of the best argument won.

GF: We always used the expression ‘the business case prevails’ and so on. Personal preferences should not interfere.

There must have been times that you struggled to overcome that barrier? We want to give everybody good, practical help on a post Covid-19 world, on how they can build their businesses by learning from some of SA’s very best. 

LD: As GT was saying, in the debates about strategy, business and that type of thing, we had this saying, the business case prevails. That means you could not introduce bias [and] prejudice in the debate. I’ll give you an example: when we acquired Momentum, its head office was in Centurion and our head office was in Sandton.

Everybody immediately assumed that we would move the head office from Centurion to Sandton, on the basis of that’s more convenient for the bosses, which is not a sound business principle. In that case, we just said this decision will be taken on the basis of the “business case prevails”. Once we’d done all the analysis, we found that wages were higher in Sandton [and] we’d lose a lot of skills. Issues pointed in one direction and that was to keep the the head office in Centurion. We didn’t allow, as I say, emotional aspects to enter into the debate or preferences such as a shorter commute for the bosses, etc.

Read also: FirstRand’s SPIRE fund extends ICU at Charlotte Maxeke Hospital, Gauteng 

I understand how you got together, but how did you stay together as friends?

GF: With difficulty – only joking! We have perhaps some different personalities and some different strengths and different weaknesses. When we got involved with Momentum, there were two psychologists in the group and we didn’t think a lot about human resources. So we wanted to fire both of them, and Francois Hugo eventually became one of the best people in the group to get the team to work together. Francois’ statement was always that we all have allowable weaknesses, if we allow for those weaknesses in our partners and our group, we can play to the strengths of various people. I think in that sense, that’s probably why we stayed together. We knew each other well. We knew what our strengths and weaknesses were and we allowed the right person to do whatever he felt and we trusted them. So there was a lot of trust involved.

LD: I want to keep it short and sweet, I attach and we all do, a great deal value system. We definitely do have the same value system. It’s a bit like a marriage: if you and your wife do not have the same value system it’s doomed to fail. That was also one of the core foundations of the friendship and also that we respected each others input. Debates were always very civil, we didn’t create many opportunities to get extremely cross with each other or throw our toys out of the cot.

PH: I agree with a lot of the stuff that GT and Laurie said. If you are to use the analogy of a rugby team, if you are always concerned about the guy next to you, if you were a centre, for example, and you need to defend, you must mark your man and then the other guy must mark his man. That is I think, how we operated, we each had our strengths and weaknesses and we stuck to that. Using the rugby analogy again, if the first centre broke and then I was marking him, I’d have to tackle him and I wouldn’t expect the other guys to be worrying about him. We worked as a team and we recognise each other’s strengths and weaknesses.

A big move, I suppose you could say, was when you merged with RMB and at that time Johann Rupert started coming into your lives. Has he played a significant role subsequent to that in business and personally?

GF: He certainly has. When we got involved with Rand Merchant Bank, Johann was asked by his father to join the Rembrandt Group in Stellenbosch. He was looking for management to take over the bank. Johann gave us a very, very clean bank, which was very valuable. He gave us some good lessons, such as don’t ever lend to somebody that doesn’t want to repay you because even if he can repay you, he won’t. Lend to somebody that wants to repay you and even if he can’t he will try his utmost best. Lesson 101 in banking. He remained as chairman of the bank for quite a while and then our paths diverged at that point in time. At a much later stage, after we started FirstRand when Anglo American wanted to sell their financial assets, the Rembrandt Group came back into our lives and they switch out of resources. We’ve got a very long relationship with Johann and obviously with the Rembrandt Group and that’s been very good to us.

LD: That transaction that GT mentioned was crucial for us: when Anglo American decided they want to concentrate on resources. We needed to find a buyer for a very big stake and, at that stage, Johann swapped or sold out of their resources and invested in us. It must have been for the first five years, it looked like a terrible decision. It was at the time then the commodities super-cycle was on the go, and we would track the share prices of the two entities. Then the super-cycle of commodities ended, and then it became brilliant. He showed a lot of faith in us by buying that stake from Anglo.

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