2021 – The Year of Innovation
Reflecting on the past year, Finance Director, Auvasha Moodley, forecasts that this will be a year of innovation as companies are compelled to think out of the box to adapt to a new normal.
CIARAN RYAN: Today’s podcast is sponsored by Draftworx, which provides automated drafting and working paper financial software to more than 8000 accounting and auditing firms and corporates. CFO Talks is a brand of the South African Institute of Business Accountants. What a pleasure it is today to welcome Auvasha Moodley, who is Finance Director at DPD Laser, a logistics company operating through its brand, Dawn Wing. The company has been voted Britain’s Best Parcel Carrier Company for four years in a row, and that’s against some pretty stiff competition. Auvasha is accredited through CIMA, which is the Chartered Institute of Management Accountants, and has a background in leading several companies through successful turnarounds. These are the kinds of skills in critical need at the moment. First of all, welcome, Auvasha, how are you today?
AUVASHA MOODLEY: Hi Ciaran, thank you for having me, I am good, thanks, and you?
CIARAN RYAN: I am well, where are you talking to us from, are you in Johannesburg?
AUVASHA MOODLEY: Yes, I am in Johannesburg at the office at the moment, we’ve got our offices in Isando.
CIARAN RYAN: Oh, Isando, okay, near the airport.
AUVASHA MOODLEY: Very close to the airport. So it’s been interesting times watching the traffic on the roads and the air traffic over the last couple of months.
CIARAN RYAN: There’s not much of that is there?
AUVASHA MOODLEY: No [laughing].
CIARAN RYAN: I’m curious to know about the logistics business and how it’s performed overall in 2020. Are you seeing a recovery after what I presume was a pretty severe hit to revenue at the start of the lockdown?
AUVASHA MOODLEY: It’s certainly been one of the most challenging years that I’ve been in the industry. It’s been a bit of a roller coaster ride, in some aspects it’s been positive, particularly because there’s been a spike with regard to e-commerce and the consumer behaviour around e-commerce, which has had a positive impact for companies like ours. But it came with a considerable amount of challenges, also from a health and safety perspective to ensure we continue business whilst adhering to the necessary protocols and ensuring that we do everything necessary from a company perspective so that we can keep infection rates down very low and make sure we’ve got people working and providing the service, yet still being safe and healthy. So I think it’s been, an interesting year for the industry. I think that the challenges that we face are very similar across the logistics companies. It’s been the change in how business is done. I made mention briefly about air traffic being limited, we do rely on overnight deliveries through the airlines, which to some extent were not available at all, or very limited, and some routes were discontinued. So it did pose a bit of a challenge because customers then still expect delivery within certain timelines. So it was a fine blend between ensuring that you keep communication open all round and making sure that you keep customers happy, as well as thinking out of the box when you’re faced with a hurdle,
CIARAN RYAN: How did you solve that, with all of these flights that have been cancelled and reduced? The number of flights, for example, between Johannesburg and Cape Town and elsewhere, how do you get around that?
AUVASHA MOODLEY: So we’ve had to resort to road freight, which, in instances like Durban to Johannesburg, but it’s not the end of the world because it’s a relatively short line haul but to Cape Town it did become quite challenging because ordinarily just because of that, you’d have to add at least a day or two to your delivery date. So like I said, it was communicating to customers and to a large extent, customers were very understanding. I think that only if you don’t communicate would they not accommodate it but it was ensuring we kept communication open as soon as we were aware, because sometimes also as much as you plan, things change at the last minute. Communication was key and ensuring that our operations was very agile.
‘It was easier to negotiate better rates so that we didn’t necessarily feel the pain.’
CIARAN RYAN: I guess if you’ve had to change your mode of transport, you would have also had to bear the cost of that, because that would be more expensive, right?
AUVASHA MOODLEY: It depends on your buying power, in some instances it was quite expensive. In some instances we had relationships with carriers that we were doing routes with. It was easier to negotiate better rates so that we didn’t necessarily feel the pain. But then you add in overtime, you add in a travel allowance for the drivers because they’re out of their driving area, so you have a travel cost associated with it and it quickly adds up. That’s why it’s a quick decision that you have to make as to what is the best outcome and then how do you do it in the most cost-effective manner.
CIARAN RYAN: Would it be fair to say that your business is very much dictated by the general economic GDP figures? In the second quarter of 2020 we saw this absolute crash in the economy, with quite a strong rebound then in the third quarter, as we’ve just seen. Is that pretty much reflected in your business as well?
AUVASHA MOODLEY: Yes, to a large extent, we did operate through the full lockdown purely because, like I mentioned, we do have a number of e-commerce customers and we’re also very big into the healthcare space. So those first three months of lockdown definitely had an impact on us where we had a decent amount of volume, but we had to keep costs down because otherwise it’s a no-brainer that you don’t have full capacity of volumes, so you can’t have your full workforce onsite and working. So it was juggling the expectation of customers and delivering to those expectations, whilst doing it in the most cost-effective manner. Then coming out of that, business did return to a somewhat normal level. As expected, e-commerce volumes continue to grow because I think the consumer, in the South African market, consumers are not necessarily at the levels that you see particularly in Europe and the US with regard to online buying behaviour because I think there’s just a trust element there that we need to overcome. But in the last couple of months, I think that we’ve definitely seen that shift. So as a result, we continue to see e-commerce volumes increase and that has helped us in the latter part of this year. However, in saying that, we definitely do see that consumer spend has been reduced because, as you know, in the logistics industry, November, December is our peak because that’s when we generally have our biggest volumes moving, and we have seen a pickup but it’s a flatter increase than we’ve seen in the past. That is largely attributable to consumer spend.
CIARAN RYAN: People just have less money to spend. I see that DPD Laser is Britain’s Best Parcel Carrier four years in a row, and I’m curious to find out what is the magic? What’s the mojo behind that? Is there a lot of technology behind that, a lot of business processes developed over a long period of time? Just maybe talk about that a minute.
AUVASHA MOODLEY: I’ve only been with the company for a short while, so I don’t know the intricate details of everything in the UK, but it’s definitely talked about on a number of calls and I think technology definitely drives, to a large extent, their success, their adaptability and the ability to give customers a relatively seamless experience has gone in their favour. They’ve invested a considerable amount over a number of years in technology and in being first to the market with regard to a number of services, particularly with regard to predict, which is pretty much giving you a time slot delivery, so you know when to expect a parcel, which I think is something that definitely sets them out above the rest, and then actually delivering to that expectation. I definitely think they’ve come a long way as a result of doing exactly that and developing technology to the point that it is very sophisticated and very seamless. Coupled with that, they’ve got a very large footprint and presence across Europe, and particularly in UK, that makes access to market that much easier as well.
CIARAN RYAN: You’ve been with DPD Laser since 2019, what’s been occupying your time in 2020? I would imagine, like most companies, there’s a massive focus on liquidity and cash, right?
AUVASHA MOODLEY: Yes, keeping a keen eye on the bank balance has definitely been a daily habit and continues to be that. 2020 was a year of how to think outside of the box, how to be innovative, ensuring we keep liquid, particularly from a risk perspective, where we anticipate for many companies to be going through a tough time from a cash perspective. So it’s watching that we don’t find ourselves in a trap where, we have outstanding, so we’ve spent a considerable amount of time on our working capital management specifically, and we’ve done quite well in that aspect. Then, like I mentioned earlier, it’s the cost management, particularly in the first three months, it was the balancing act of delivering a service at the lowest cost possible so that we still had a decent enough bottom line, which wasn’t easy at all. But it took buy-in from staff, it took many strategic decisions being made. Coupled with that, like I speak to the success of the UK being their IT products, it was also looking from our side as to how we could develop a technology to adjust to the current needs. I think our biggest success thus far has been our contactless delivery, which allows for the delivery to be done and the recipient just clicks on a link to confirm receipt of the delivery. So there’s no need to change hands of paper or signing or anything of the sort. So it was that sort of out of the box thinking that we all as an executive team had to do this year.
‘There’s no book that can tell you in this industry these are the exact risks.’
CIARAN RYAN: Let’s talk about the role of the finance executive or CFO. Now, I also see that you come from a rather non-conventional route, you’ve come through the CIMA route to the CFO position, rather than the CA route. I’d like you to talk about that, but what do you think generally makes for a good CFO or a finance exec, is it technical knowledge of the accounts and compliance issues or is there more to it?
AUVASHA MOODLEY: I think it’s a combination, I think it’s very important to have good technical knowledge and understanding and grounding, but I think there’s a bit more to it. It’s understanding the environment in which you are working in and adapting to that environment because in finance you need to ensure that you cover your risk to the largest extent possible, but you need to understand what you need to do and where your risk is, and that changes, there’s no book that can tell you in this industry these are the exact risks, and you don’t need to deviate from that. It really evolves and changes, it’s the ability to be agile and adapt, and then it’s also relating to staff and understanding staff. I think that I had the privilege of starting from the bottom up and, like you mentioned, I didn’t go the conventional CA route, so most of my experience was gained on the job, starting right from the bottom. So when I speak to staff about expectations and how we want to do things and how we can evolve to do things better, it’s not from a point of or the context of out of a book, it’s from personal experience, which to a large extent, holds much more value and it holds weight. So it’s using those trials and tribulations through your experience to effect the changes and the processes and controls required. So I think it’s a combination of all of that.
CIARAN RYAN: So where does one pick up these skills? One of the things that is coming out in a lot of my discussions is the ability to communicate. Now, this is something that accountants don’t really learn about in school or in college, is it? Strategy, thinking outside the box, problem solving, these are all, I wouldn’t say all exactly soft skills, but yes, in a way they are soft skills. Where does one pick that up, is it on the job, is it through other means?
AUVASHA MOODLEY: Yes, I think, like I said, it’s a combination. So for me personally, I was very fortunate early in my career to have been given exposure to various aspects of the business and at the time the company that I was at, which was UTI, was going through an expansion into the rest of Africa, outside of South Africa, and I was very involved in that. As a result of that, relationship building, particularly in the Africa business environment is of fundamental importance, so because I think I was pushed into that at a very early stage in my career, communicating and understanding people and understanding views became something that was ingrained in me very early. So yes, that I can say came out of the job, and then obviously through trials and errors, you learn and don’t repeat, and learn how to do it better or improve going forward. But then coupled with that, I have to say that having then gone through the MBA programme and through my CIMA, obviously the technical skills from a people perspective was refined, and how to deal with different situations and how to refine thinking, and strategy and execution. Everybody talks about strategy and that’s all good and well, but a strategy is only as good as you are able to execute. I think that is the more important part of a strategy. Then definitely I think through the learnings of the MBA and through my CIMA, they somewhat complimented the learnings on the job and I don’t profess to be the best but it’s definitely helped me through my career.
CIARAN RYAN: Yes, there’s quite a lot of study that has been done on this subject about the evolving role of the CFO, and I mentioned it a few times previously on these podcasts, and what is interesting is that, for example, there’s a study called from CA to CFO, and it comes out of Canada, which really looks at about 34 different competencies. The South African Institute of Business Accountants has developed this designation called CFO South Africa or CFO SA, which is really in recognition of that. So a lot of these competencies are learned through experience, you have to have been at the job for quite a while to develop a very clear communication toolkit. You have to be able to communicate the company’s vision, you have to be able to manage teams, you have to be able to get on with people. These are the kinds of things that you don’t get in university. Do you think that’s like a glaring deficiency, something that really has to be looked at?
AUVASHA MOODLEY: Yes, like I said, maybe I’ve got a bit of a subjective view because I feel the benefit of having learnt many of these skills on the job, and that’s why when I do it the other way around in that I did a lot on the job, and then when doing MBA and CIMA, you reflect on it and say, oh, okay, I understand that because this is a situation I can relate to. It just hits home a bit more and then your ability to enable it to grow just is better because you’ve got a reference point. So I think that is a little bit of a gap and you mentioned also, I think, with regard to the role of a CFO in the organisation has evolved considerably from being the traditional office bound bookkeeper, ensuring that the numbers all tick off and getting through audits, to a more centralised role in that finance generally is the person that pulls all the different areas of the business together to tell a story through the numbers.
CIARAN RYAN: That’s a very good way to put it, that’s the storytelling through the numbers.
AUVASHA MOODLEY: I think in that evolution of the role, it’s also a requirement to not only be able to speak to people in your peer group, and when I say peer group, that’s within the finance profession, but it’s across different areas in a business. So how you speak, how you deal with sales, how you deal with operations, how you deal with drivers, you cannot approach all of them in exactly the same manner. You need to understand how to approach them and how to communicate with them. That’s where I think that the role of a CFO has shifted, compared to where it was 30, 40 years ago when it was generally, I’m not trying to play it down, but the focus was more on just ensuring that the finances of the company were accurate, and it’s more than just that now.
CIARAN RYAN: Yes and of course, you’re also talking to different audiences, so you may be talking to the finance team and it’s a different language to when you’re talking to others stakeholders outside the company. So you explained to them that revenue went up 15% this year, but there’s less cash in the bank…
AUVASHA MOODLEY: Nobody gets that [laughing].
CIARAN RYAN: Nobody gets that because revenue and cash are not the same. You’ve got to now start explaining these things in some detail.
AUVASHA MOODLEY: A perfect example is, like I’ve mentioned, volumes have been relatively good, so the guy on our warehouse floor thinks we’re doing fantastically because the volumes haven’t really dropped off, but in the bigger picture it’s not as simple as that.
‘The route that I took has given me the most beneficial outcome.’
CIARAN RYAN: Talk about your CIMA route that you took and the CIMA accreditation with the Chartered Institute of Management Accountants. It’s quite an interesting route, very much geared towards developing management material and developing CFO material, I would imagine. What was your motivation?
AUVASHA MOODLEY: Like I mentioned, I never studied full-time, so I always studied part-time, so I worked and studied, and I was very fortunate in my early days in my career to have been given good opportunities to grow within the company quite quickly. When I first started studying, obviously my intention was to go the CA route because I did do a BCompt degree, which is generally geared towards ending up with a CA. However, at the point that I finished my degree, I was already in a management position. I was finance manager for Botswana at the time. So when I looked at where my next steps were, it didn’t make sense for me to, it would have been a step backwards from a career perspective to go and do articles and go the traditional CA route, particularly because I had already gained an inordinate amount of experience with regard to many of the on the ground financial transactions and understanding of business. So it made more sense for me to go the CIMA route, and I actually did my MBA first and then I did my CIMA. I found that my passion was definitely in more understanding and telling stories with numbers and the strategic finance aspect, more than the traditional conventional finance aspect. I have the greatest respect and admiration for CAs. I’ve throughout my career as a manager have always had to manage CAs. But I think maybe it’s also my character, I’m the non-conventional type of person and I wouldn’t change it for a moment. I think that that both accreditations have an enormous amount of knowledge and skills that you gain. But for me personally, I think the route that I took has given me the most beneficial outcome and it talked to the sweet spot of what I was passionate about.
CIARAN RYAN: What would you say is the biggest challenge of your career? You’ve mentioned you were working in Botswana for a period of time, was that a challenge just because of the environment, it’s a little bit remote from the economic engine of South Africa? Well, what was the big challenge for you?
AUVASHA MOODLEY: I’ve worked and lived in four countries over the span of my career. I think one of the biggest challenges…I think it’s evolved over time, in the initial days it definitely was being a young female in a predominantly male environment, and for the first part of my career I was less qualified on paper than many of the people I worked with. I found myself always having to prove myself and having to prove my worth, and I was younger and less mature obviously, so that did come with its challenges. So that was a big challenge to overcome. You mentioned Botswana, at the time that I was in Botswana, the cultural affinity towards having females in senior positions was not quite advanced at that point yet. So that did pose a bit of a challenge. In some aspects, when I look back at it, some situations I didn’t handle as well as I could have, but I learned from it and I’ve grown from it. But as I fast forward to more recently, I think my challenge has been my lack of patience to some extent or not lack of patience, I work in a very fast paced way, I want things to happen quickly and I want things to change quickly and evolve quickly. You can’t do it on your own, you have to get the team behind it. So I think my biggest challenge of the most recent years, and I refer to a book that I read probably about a year or two ago, Thinking, Fast and Slow by Daniel Kahneman, just exactly about this because it’s how do you think fast enough, yet stop for the moment, absorb and wait for others to join and take them along with you in the journey. That’s been a little bit of a challenge, which I have made a lot of effort to overcome, I think I’ve got better at it. But it it’s like, you know what you want, you know where you need to go and it’s just bringing people with you. If I had to reflect on my career progression, those would have been my biggest challenges thus far.
CIARAN RYAN: I think we all look back on these things and think I could have handled that better, I could’ve been a little bit calmer about that thing or whatever it was.
AUVASHA MOODLEY: Hindsight is a perfect science.
Diverse international experience
CIARAN RYAN: That’s right. What other countries, apart from Botswana, did you work in? You said you worked in four.
AUVASHA MOODLEY: In my previous roles I was actually mostly responsible for entities in
Sub-Sahara Africa. I’ve worked in Botswana, Malawi, Mauritius, Mozambique, Zambia, Zimbabwe, Tanzania, Uganda, Angola. I was responsible for the Middle East for a short time and then I lived in the UK for a short period, I was responsible for UK and Ireland. So I’ve had my fair share of exposure in many countries outside of South Africa.
CIARAN RYAN: So tell us a little bit more about yourself and where you grew up, where you went to school and how you ended up where you are now.
AUVASHA MOODLEY: I’m born and bred in Johannesburg. I grew up in Lenasia, which is in the south of Johannesburg. Back then, when I was a kid, it was still very sectional in that people from different races lived in different areas and Lenasia was a predominantly Indian area. I grew up with most of my family being in Durban. When I say family, I mean extended family and just my parents and my sibling and I being in Johannesburg. So at an early age, as you know, having support structures is very important to everybody. So from an early age our support structure, to a large extent, were the people around us. My family was very culturally orientated, I grew up doing Indian classical dance, which I subsequently graduated, and I went and spent two years in India refining the skill and learning more about the art form. When I returned, I started my own Indian classical dance school where I teach dancing?
CIARAN RYAN: Do you still have that today?
AUVASHA MOODLEY: I still do yes, over the weekend. That is my stress relief mechanism [laughing]. We’re very family orientated, I come from a very close-knit family and relationships are extremely important to me. I’ve been married for the last three years but my husband and I have been together for 20 years. So he’s been through most of my journey from a career perspective, he’s moved around to different countries with me too. So I look back and I think I have to definitely give my parents a lot of credit for where I am today because both my parents, particularly my father who has always been my role model, have been very open-minded in how he allowed us to grow and expand, even though it wasn’t quite the norm in our family circle or in our community. So I’m very grateful for that because I think my independence and my ability to jump into situations that are relatively quite challenging was as a result of being given those wings to fly by him particularly.
CIARAN RYAN: I’m just curious, you you’ve been with your husband for 20 years, but only married three, that’s very un-Indian, is it not?
AUVASHA MOODLEY: [Laughing] It is, there are a lot of reasons behind it. Unfortunately, my father passed away just while I was in Botswana. So I came back to South Africa after that. Like I mentioned, my father was a very integral part of my life and he was the biggest loss I’ve ever had to go through, and my husband was very understanding of that. I’ve got a younger sister who I wanted to make sure was settled before we could settle down. So we made sure and, like I said, I was very fortunate, my husband was supportive of that. So once she was settled, I was in a space where I could bring myself to actually have a wedding without my father there. So that was predominantly the reason why we only tied the knot recently.
CIARAN RYAN: So events happened, things happened along the way. Okay, final couple of questions here. Are you optimistic for 2021 and if so, why?
AUVASHA MOODLEY: Oh, we have to be. I think that I am optimistic, I think it’s going to be another challenging year, it’s going to be far from easy. I’m sure of that because, like I mentioned, the market is very strained. I don’t think anybody really knows what is really going to happen with regard to the virus and when we’re going to get any vaccine for it and what’s going to happen between that time, which all has a big economic impact. But I think where my optimism comes from is in times like this is where you get the best innovation because you’re forced to think out of the box, you’re forced to venture into areas you ordinarily wouldn’t have gone into. So I think that 2021 is going to be the year of innovation, if nothing else, and finding different ways to get to the end result that we all need. But it’s going to be a big challenge and I think those that are going to come out victorious are going to be the ones that are the most innovative and most cost-conscious and agile businesses.
CIARAN RYAN: I think that’s a point well-made, the innovation, it’s going to start inspiring all kinds of very interesting solutions because of the circumstances we found ourselves in this last year. I totally agree with you that you have to be positive. You can’t fold your arms and pretend things can carry on as normal because they won’t. Okay, final question, and I ask this to everybody who comes on, what books would you recommend, and they don’t have to be technical accounting books.
AUVASHA MOODLEY: I did mention Thinking, Fast and Slow by Daniel Kahneman, it definitely provides perspective because we are in a very fast-paced environment, but it’s the ability to think at different levels and execute in different manners. So that is something that I often reflect on. One of the reasons I looked at this book also when I first was aware of it, and I remember sitting in an MBA class and a lecturer saying, when you’re working with people, when you have an expectation of an outcome from that person, before you have an expectation of when you will get it, compare your salary to their salary and dependent on the differential on that, put your expectations of delivery. So if there’s a big gap, don’t expect it to come at the level that you want it at and expect to have to do more work to get the outcome that you want. Where there’s a smaller gap, you can have higher expectations. So I often find myself stopping for a moment and thinking am I expecting too much. So this book really helped me put a lot into perspective from that perspective. I’ve read quite a few Richard Branson books, I think that entrepreneurial spirit and risk-taking just through real life, he’s done really well, and he’s had a lot of fortune on his side too, fair enough. But I think it’s just that positivity, when you’re reading his book there’s a lot of positive energy and inspiration that you gain from it. So I’ve enjoyed some of those books.
CIARAN RYAN: So you like the inspirational stuff?
AUVASHA MOODLEY: Yes, I’m a person who feeds off positive energy and that’s why I love working with people and working amongst people because I’m energised by people.
CIARAN RYAN: Wow, what a fascinating discussion, it’s great to get your perspective on things, and particularly given your career journey and the industry that you’re in right now is quite a fascinating window into the world in which we find ourselves. So I want to thank you so much for coming on and sharing those thoughts and those experiences. We’d love to have you back again this year and just see how things are going.
AUVASHA MOODLEY: Fantastic, thank you for having me, Ciaran. It was lovely chatting.
CIARAN RYAN: Thank you so much. That was Auvasha Moodley, who is the Finance Director at DPD Laser.
