🔒 Johann Rupert joins BizNews webinar: SA after Covid; tips for 30-something entrepreneurs

Business partners GT Ferreira, Laurie Dippenaar and Paul Harris were in for a surprise at a recent BizNews’ Noontime Thursday webinar. The founders of FirstRand, one of South Africa’s largest financial services groups, were delighted when businessman and philanthropist Johann Rupert arrived to share his anecdotes of his business dealings with them. Rupert is chairman of Swiss-based luxury-goods company Richemont and SA-based Remgro. He speaks about how he appointed the trio to head Rand Merchant Bank, talked of his enduring friendship with the three and praised their work ethic and values. The entrepreneurial heavyweights share powerful insights on how South Africans can survive in a post-Covid world. This is part two of a four-part series (you can listen to the FirstRand founders and Rupert share their stories, or watch the full webinar, below). – Nadim Nyker

Alec Hogg: Johann Rupert joins us now. Johann, why did you put so much faith in these chaps?

JR: It’s fascinating listening to my three friends. My dad was 68 at the time when I realised that he was having problems controlling some of the subsidiaries, it became a no brainer, and I didn’t want to hand my five-year-old colleagues at Rand Merchant Bank over to people that I didn’t know. Paul [Harris] had, in fact, done me a big favour.


We’d been friends since 1969 and I knew GT and Pat Goss. Pat and I also played cricket together at the same time as Paul, and I trusted them. They did me the immense favour by asking GT to explain, and confirm my doubts about, a certain individual.

Five companies went bankrupt in December 1982, and luckily we’d been covered. So, it was more of an issue of ‘who do you a trust?’. My wife, Gaynor, knew Laurie from university days, so it was a natural fit of friends.

It’s fascinating listening to these three describing their roles. I think it’s best summarised by saying that Paul always wanted to sail with a spinnaker, flat out, running the whole options business in South Africa. When we did the deal, RMB really consisted out of some brilliant individuals, three of whom you have on-screen. 

There were people like Dr Alberto Bottega who ran the options business. Initially, it was the Umgeni Water Board lease that produced all the cash flow from their side. I soon found out that, having known Paul for very many years, Paul was the adventurer, looking at new things. I would describe Laurie as the conservative individual, like a sheet anchor making sure that the yacht wouldn’t run onto the rocks. The skipper was GT, and I don’t think that role changed over the years.

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

Paul, as the optimist of the group or certainly one of the optimists of South Africa, where does South Africa go after Covid-19? Are you still optimistic, are you still seeing an exciting future?

PH: I could start by quoting Johann.

Right at the beginning, Johann says, Covid is not a pause button, it’s a reset button.

There’s a lot in that. Things are going to be totally different, but it is difficult sometimes to be positive. Things are very difficult, as we all know but I just think if you go back and see what we’ve been through as a country.

If I go back to my father, he went to the war, we then had Sharpeville, Soweto Riots. After that, we had a debt standstill, can you imagine? The government coming in, and saying, that you’re not allowed to repay foreign debt, imagine how bad that would be right now from an economic point of view?

Then we had…people driving through the doors of the World Trade Centre and just about a civil war. We’ve been through big problems before. Our particular group, we started in huge problems, we were on the final stages of apartheid, we went through the transition.

There was talk of capturing the heights of the economy and all those types of thing. We are in a difficult and dark place at the moment, but we’ve got resilience and we’ll come out of it. That’s the attitude we need to have. If our attitude is that all things are going to fall over, then we’ve got problems.

It might be a bit of irrationality in the positiveness that we’ve almost got no option but to see positiveness and to see this as an opportunity to build. The one thing for certain, we’ll be pulling off a low base.

LD: I think one of the pluses that it comes has come out of this Covid era, is that business and the government have moved closer together. It’s not perfect yet, but they’ve certainly built bridges and hopefully, we’ve earned the respect of the government.

To get out of this hole that we in, and in fact, the whole world, we have to get some of the basics right. One of my big issues has always been, the question that we need in the appointment of people to be a meritocracy.

If you think a meritocracy does work and if you think we’ve got to Constitutional Court in this country, that is a centre of excellence, it’s admired by everybody. We’ve got a Reserve Bank that is very, very good. We had a receiver of revenue that ranked in the top five in the world until somebody tried to damage it.

Then we’ve got a very good Treasury.

What I’m saying is it is possible to have a transformation, appoint on merit and appoint the right technocrats. We’re in trouble if we continue to appoint on the basis of loyalty to a party and all other factors.

Think of a soccer team, imagine you assembled a soccer team, not on the basis of people being I want to play soccer, but all sorts of other criteria like closeness to the coach and that type of thing.

To sum up, hopefully, this will make us get the basics right in this country. Some of the stuff that we have neglected in the past. We definitely will need to do that to dig ourselves out of the hole we are in the present.

GT, how do you see the post-Covid future for South Africa?

GF I haven’t got a magic wand that I think we can wave. What we just need to understand is: we all in the same boat, the whole world is in the same boat, it’s not only South Africa. When you talk about South Africa, we must also realise that every individual and all the companies are playing under the same handicap.

Going forward it’s a relative game again. In other words, you have to play better than the opposition. Doesn’t really matter what the handicap is. The handicap is now greater than it was before.

Going back to what Paul mentioned, we merged with Rand Merchant Bank in 1985 and we were very happy. We thought we had foreign lines, et cetera, and access to capital. That was in June 1985, and in I think it was August/September, PW Botha pointed his finger at the world.  He may as well have pointed the middle finger and everything came to a standstill.

If you think what happened there, Paul referred to the standstill, we had the commercial rand and the financial rand. It was a disaster far bigger than what South Africa has got today and it was the private sectors, the resilience, that got us through that.

If you look backwards and you actually look at share prices etc, and even at Rand Merchant Bank’s performance, call it profits, there wasn’t a dip. We went through that and if we did it then, I think we can do it again.

Johann, you were quoted in the beginning by Paul. I’m going to impose on you, if I may, just for one last thought, on the subject of South Africa’s post-Covid future.

JR: I asked my father years ago, amongst many wisdoms he imparted: would you have done the same thing again, gone international? He said no, of course not.

I asked him why, he said: I would have known that it was impossible. When I look back at when we started and the things we did, if we had known then what we know now, we would never have taken the risks and we would never have ventured forth.

We wouldn’t have done, and when I say we, I say Rand Merchant Bank, the whole group. At that stage in your 30s, you don’t know that it’s impossible. The fact is, thank God you didn’t know that it was impossible.

To everyone there in their 30s, don’t think things are impossible. If you apply your minds and you work very, very hard and you you know where due north is, your ethics and your culture. The one thing that stood out to me with GT, Laurie and Paul, was the culture and the ethics.

If you get the culture and the ethics right in the beginning, it stands you in good stead, because to change the culture of a bad company is damn near impossible.

Post-Covid, the world will have to realise that there’s a reset. Hopefully, the time out, certainly it’s given me… I spent the two and a half months with my family in the Karoo, my 89-year-old mother-in-law who is fitter than any of us, Gaynor, three kids, better halves, grandson, and I don’t think I’ll ever have another time like that together with our whole family bonding.

A lot of people will realise that we’ll have to change our lifestyles. We need empathy, empathy with not only one another but empathy with the environment.

To everyone in their 30s, don’t think things are impossible.

We certainly have to realise that global warming is an existential threat. We will have more viruses. The way we live, it was predicted that we’ll have global viruses.

In terms of business, the world economy was obviously in difficulty. Europe cannot create jobs with zero percent interest rates. This was pre-Covid.  The United States, despite President Trumps claims, that those where gig jobs, insecure for the workers. Secondly, it was the stock market.

When you get interest rates to zero, people  look for alternate investments. The fourth industrial revolution is upon us, people must think laterally and think about the changing in economy.

With that, I’m going to watching test cricket now.

Audience: What would you advise a 20-year-old South African today?

PH: I don’t know if I should tell a story that I often tell, you can live in a zoo or you can live in an open reserve, in the wilderness. The zoo, there are a lot of upsides.

You get fed at the right time, you get to control the temperature, if you break a leg and you happen to be a kudu, for example, they’ll put it in plaster and it will survive and you’ll never have anything to worry about. They probably will bring a mate as well, so pretty easy in a zoo.

In the wilderness, you have to be sharp, there’s danger, but you also see the sunrise. You hear the dawn chorus, you get different weather patterns and you have to be sharp and you have to be on it. From my perspective it’s an incredibly exciting place. It’s the wilderness, there’s some danger involved, but there are fantastic upsides.

When things go right, you happy and so on. But you’re also going to have some down times. I like the excitement in South Africa, the fact that we are right at the beginning, that we’re doing something different. If I was a 30-year old I would hang in.

Audience: You guys managed to encourage entrepreneurship. How did you instil that culture of entrepreneurship, of innovation?

GF: We were all, I suppose, entrepreneurs in our own right. I read a dissertation by a student for a Master’s degree at the University of Orange Free State. That made a comparison between entrepreneurship and intrepreneurship.

When they looked at all the characteristics and the qualities of the two and obviously hard work, et cetera, all of those things matter. There were only two things that differed between an entrepreneur and what he called an intrepreneur. Intrapreneur, as far as he was concerned, was the person that’s got all the entrepreneurial qualities but doesn’t have two: those two were ego or a very high ego and then the propensity to take risks.

Those were the ones that were lacking.

We through all the years have actually sought out those people, calling them the intrepreneurs, that were as intelligent, as good as the entrepreneur but didn’t necessarily want that person with a high propensity to take a risk in your organisation dealing on the money market or the capital market, etc., and also not to have too big an ego.

Now, ego is a very good thing because it pushes us to do better, we have had a couple of people with very, very high egos, but I think that’s what we sought in the organisation and we encourage them to be like that in the group.

LD: I’d like to start with when the three of us required Rand Merchant Bank, we then needed a pay-off line. We got a marketing friend to come up with something.

He came up with a payoff line of ‘traditional values, innovative ideas’. I said to him, how do you get to that? He said, I spent a week with you and I observed,  that’s the DNA of that little bank at this point in time. In a way, it’s a good start. When you were still small, you’ve got innovation as part of your DNA.

We always made a big fuss and respected and admired small companies that are innovative in the group. It didn’t matter if they only contributed 0.1% of the group’s profit, if they were innovative and did something different and disruptive, they were honoured and revered. That’s very important, we weren’t dismissive.

We can thank Michael Jordaan for introducing the formal programs and prizes for people who came up with innovative ideas within the bank, such as how to improve queues.

Some of the prizes were quite large, I think in the millions and you suddenly realise that, if people are given the freedom and are encouraged, anybody can be innovative. Those programs, which I hope still continue, made a huge contribution.

Innovation became part of the fabric of the organisation.

Visited 2,764 times, 1 visit(s) today