Good teaching, no matter where, can foster great leaders in science and industry.
Calvin Sehlapelo was raised in a township in Polokwane where CAs were virtually unheard of, and rose to head the National Metrology Institute of South Africa in 2017.
CIARAN RYAN: Today’s podcast is sponsored by Draftworx, which provides automated drafting and working-paper financial software to more than 8 000 accounting and auditing firms and corporations. And CFO Talks is a brand of the South African Institute of Business Accountants.
What a pleasure it is today to welcome Calvin Sehlapelo – I hope I pronounced that correctly. Calvin is CFO at the National Metrology Institute of South Africa, NMISA, a position he has held since 2017. Before that he was with the National Department of Public Works as chief director for financial accounting and reporting. Calvin is a CA and a member of the Black Management Forum, as well as a member of the Association for the Advancement of Black Accountants in Southern Africa, and I’m sure Calvin’s going to tell us about that in a minute.
The National Metrology Institute of South Africa is in the business of measurement, whether that’s defining appropriate measures for different use cases, such as energy efficiency and what measures to use as a benchmark for smart grids, or for diagnostics and measuring standards for manufacturing in sectors like automative and rail-coach production.
First of all, welcome Calvin. Where are we talking to you from today?
CALVIN SEHLAPELO: Hello, Ciaran, and thanks for having me on your show. I’m currently in Johannesburg.
CIARAN RYAN: You are most welcome. Now, the National Metrology Institute is based in Pretoria, so I guess you’re working from home. There’s still some measure of lockdown going on in the office. Is that right?
CALVIN SEHLAPELO: That’s absolutely correct. With the current lockdown situation and levels, we are working half from home and half from the office. So there are people in the office ready to do any measurements, but the rest of us can work from home.
CIARAN RYAN: Okay. Then kick off and give us an idea of the National Metrology Institute of South Africa and why it’s important to the South African economy.
CALVIN SEHLAPEL: Thanks. The National Metrology Institute is part of quality infrastructure. We report to the Department of Trade, Industry and Competition, and are part of the quality infrastructure, which includes your South African Bureau of Standards, which does your standards in terms of your normal standards. It’s equivalent to your ISO standards. You also have the South African National Accreditation System, which accredits all the companies that do measurements in terms of your laboratories and companies like that. And the final one will be the National Regulator for Composite Specifications, which does all the regulated requirements for good services and the like. So we are part of the Department of Trade & Industry.
‘In a nutshell, metrology is about ensuring fairness’
In a nutshell, metrology is about ensuring fairness. If you are buying something from someone, you want to make sure that if they’re selling you 10 kilograms, you are clear that the 10 kilograms that he is selling and the 10 kilograms that you are buying are the same.
If you are talking about the importation of goods, there are standards and measurements for the goods that you are receiving from whoever is your supplier, and there is a clear international arrangement as to what those measurement entities are.
If you are talking about diagnostics in the medical field, you want to make sure that the diagnosis that you are getting for an illness that you might have is actually accurate and, after that, that the medication that that you receive is also accurate. If you’re going from one hospital to another and you are supposed to get a certain millimetre dosage of this [medication], you’re getting the same dosage wherever you are.
So it’s about generally creating fairness. It’s about ensuring that when regulators say your emissions are supposed to be at this level, you don’t get one party saying you are over and the other party saying you are under. That’s creating a fairness in a system, both locally and internationally, so that your international trade partners can have confidence in what you do.
CIARAN RYAN: Right. Okay. We’re all familiar with the SABS, the South African Bureau of Standards stamp. If you’ve got that stamp, then it means that you’ve passed through somebody at the Bureau who has looked at it and they’ve signed it off, and it is what it’s supposed to be.
Now, with the National Metrology Institute, how do you get involved? Just take medicine, for example. Every medicine that comes into the country – does it have to come through your offices to get verified and tested and measured, or is it something that is voluntarily done? Or is it a mixture of both regulation and volunteerism?
CALVIN SEHLAPELO: It’s generally a mixture of both. I think a quality system is a bit difficult to explain, especially since it happens in the background. So when you look at the South African Bureau of Standards – as an accountant trying to explain the science – what they would do is that, if you want to create a mixture of concrete that will withstand two storeys, you need to have 50 kilograms of cement and 20 litres of water, and such and such of sand. Where we come in is to say, what is 50 kilograms? Those are the national measurement standards that we develop, keep and disseminate to industry. We would say, what is 50 kilograms, what is 10 litres, because we generally assume if Coca-Cola says this is one litre, it’s actually one litre. But we define what those are.
So in terms of testing for a medicine the regulator may include a requirement that such and such a medicine, if you want to call something Vitamin C, must have a certain amount of vitamin C in it. We would be part of what is providing the testing, but also take part in saying, what is Vitamin C to begin with, and how much of that is actually in the medicine? That’s where we would play a role.
So mostly to support the regulators is to support trade, and is to support health and safety. So, if the Department of Labour says an office space is supposed to have so much brightness so that your employees don’t go blind, we would calculate what that brightness is. So generally, in a simple way, half of what we do is calibration, which is what most of the public understands, which is that light meter that tests the light amount would be calibrated by us to ensure that it’s performing at the right level.
‘Probably more than a 70% of our staff is science-based, with a little bit of engineering’
CIARAN RYAN: I guess you would have a lot of scientists working there, mostly scientists, right?
CALVIN SEHLAPELO: It is mostly scientists. We are a scientific organisation. I think probably more than 70% of our staff is science-based, with a little bit of engineering to a lesser extent. But it is technically a science-based institution.
CIARAN RYAN: All right. How many people are employed there, and could you at the same time give us a sense of the size of the budget that you handling?
CALVIN SEHLAPELO: We’ve got about 190 officials. Our annual budget is about R300 million. Most of it is funded by the department. But I think for an organisation of our size we are punching a little above our weight. Part of our big mandate is to ensure international equivalents. “International equivalents” means we are able to have a lot of measurement capabilities that are recognised internationally. As I mentioned, the SABS belongs internationally under ISO. We belong internationally under an organisation called BIPM (the International Bureau of Weights and Measures), which is based in France, and we currently hold the presidency for that international organisation.
CIARAN RYAN: Oh, really? So South Africa or NMISA at the moment is the global chair of this international organisation.
CALVIN SEHLAPELO: One of our directors is the president of the organisation.
CIARAN RYAN: Okay. And tell us about the audit function. Have you been able – because you fall under the Department of Trade & Industry – to achieve clean audits? And then your finance team, how big is that?
CALVIN SEHLAPELO: Look, I’m very proud of our team. We’ve got a dedicated team of about 10, which includes the supply management function. The team has done really well in the past and we’ve managed to get clean audits for probably the past five, six years. So the team has done very well. But I think, importantly, when people look at the public sector, they simply look at the clean audit. What’s also important to us is we’ve managed to achieve what we call the predetermined objective, in public sector language, which in simple terms is just your annual KPIs. We’ve managed to also achieve a high level with those, I think, where we are doing very well from an audit [perspective] and achieving our annual KPIs.
CIARAN RYAN: Maybe just spell out what some of those KPIs would be.
CALVIN SEHLAPELO: Because you are an organisation that looks at international equivalents, some of the KPIs talk to maintaining your measurement standards. It’s an activity that happens annually. It talks to making sure that you’ve got primary measurements. What happens in in a metrology place is that the National Metrology Institute is at the top of the food chain and needs to maintain and calculate the SI units, to realise them at the highest level of confidence.
So what you would generally do is you would then get the base units, you would then transfer them to your private labs; so you will find a lab that specialises in mass measurement and calibration of the scales that you have in your Pick n Pays or your Shoprites, or your stores. We would calibrate them, and then they would calibrate those different entities. So it’s about maintaining those. It’s about ensuring that.
Because we are also focused on regional [areas], what we do is proficiency-testing schemes, making sure that you’ve got enough proficiency-testing schemes within the region, within Africa, to make sure that we are all measuring at the same level, making sure that we maintain our accreditation with SANAS, as I’ve explained to you, your South African National Accreditation System, and making sure your labs still remain accredited, which is a process we do, making sure that we’ve got our metrologists trained, et cetera. Those are the kind of KPIs that we manage to achieve.
CIARAN RYAN: Right. In terms of your revenue, you mentioned that you rely on a grant from the government. But would there also be a part of that revenue which is generated by yourself through the sale of services?
CALVIN SEHLAPELO: Yes. At the moment, it’s quite small. I think it’s one of our biggest challenges. Given the fiscus and money being diverted to fight the coronavirus and a lot of other things, one of our biggest strategies is to increase that revenue. When I started there, that revenue was sitting at about R5 million. We managed to get it in the previous financial year to about R35 million, which is about 10% of what we receive from the mother department. So there is a little bit of revenue that we generate from providing services, from doing the calibrations and from doing some of the other services that are chemical- based. And we provide pure gases to the gas industry so that they can compare their gases against the standard, if I may call it that.
CIARAN RYAN: And is there any demand? Are you able to, for example, sell your services to other African countries who may not have the kind of scientific expertise you’ve got?
CALVIN SEHLAPELO: There’s quite a bit of that, and some of the revenue is from consulting, helping the other African countries to get to a level where we can trade. I think one of our biggest projects, if I can say so, is to try and assist with the African Free Continental Trade Agreement and ensure that to have trade you need to be measuring at the same level, to make sure that you know that African countries are coming up, especially in goods and services that are common.
One of the biggest things that we’re looking at is safety in food.
One of the biggest things that we’re looking at is safety in foods. We develop what we call reference materials, which are basically measuring standards, creating professional proficiency-testing schemes across Africa, setting up a regional reference institute that will help all the other African countries, especially those in SADC, to make sure that we can trade freely, because sometimes what we call barriers to trade are just about measurement, and we want to remove those barriers to trade across Africa.
CIARAN RYAN: I would imagine with the Africa Free Continental Trade Agreement – this is going to be a major feature of inter-Africa trade going forward – that your importance in this whole regional development is going to become quite huge.
CALVIN SEHLAPELO: It’s a scary and exciting prospect. I think it’s going to be one of the biggest liberators – and trade is really dependent upon measurement. When you talk about food you’re talking about the amount of pesticides in food, so you need to be able to measure accurately the amount of pesticides, you need to make sure that every country that is now trading with others is also on par with that level of measurement. And that’s something we are working very hard on to ensure that it can happen because, unless you deal with those measurement issues, you will have 10 countries that say, well, this thing doesn’t actually work for us. It’s an exciting and very scary prospect, but it’s going to be massive.
CIARAN RYAN: Right. What are some of the projects that the Institute is working on for the future? Is this one of the big ones, this new free-trade area agreement – or are there others?
CALVIN SEHLAPELO: This is definitely one of the big ones, but we work with measurements every day. I think we will have to start looking at things that are related to the coronavirus. We are looking at calibration of these temperature “guns” that we’re seeing everywhere in the country – how accurate are they? Sometimes you get a temperature that says you are at 25 degrees – but at 25 degrees you are no longer with us! [Ciaran chuckles] Those are some of the things that we are working on.
We are working with the regulators to talk about what acceptable levels of sanitisers are, and measuring them, because you get companies coming from everywhere, saying “I’m now a sanitiser merchant”. A lot of focus is now going into dealing with the coronavirus, and I think where the coronavirus comes and stays some of these things will remain with us into the future.
The food-safety programme is one of the big ones across Africa, and part of what we eat in Africa doesn’t exist anywhere [else] in the world. So safety protocols around those are things you hardly find. You find maize in a few countries internationally, you hardly find cassava and all of those things, but we have to develop some of these things ourselves as Africa, to make sure that everybody’s kept safe.
CIARAN RYAN: Tell us a bit about yourself and your career journey – where you grew up, where you went to school and how you ended up here.
CALVIN SEHLAPELO: This is one of those things that we just end up going into. I grew up in the township of Shesego, just outside Polokwane in Limpopo Province, and I went to high school there. I think that the biggest influence on me was my accountancy teacher. In the background that we come from you didn’t even know what a CA is and what a CA does. I think he steered me towards that, looking at my affinity to numbers. But I grew up in a family that had lots of small businesses here and there, and the affinity for numbers grew from that. [My mother] steered me in that direction. I did my degrees at the University of Pretoria and my articles with KPMG.
From there, I did a lot of consulting in the public-sector space until a light bulb went on to say, ‘If not me, then who?’ and I threw myself into the public-sector space. When I was at the Department of Public Works we had of opinions on the two entities that they had; 25 different things had been disclaimed on from an accounting basis, whether it was payables, commitments or such. By the time I left, one of the entities had a clean audit. The other one had one issue of qualification. That issue was related to the valuation of the properties, because obviously public works owns all the properties, and it’s a costly exercise to try and get all those properties valued. I think they had about 32 000 properties. So the valuation was the only item that was remaining from one of those entities. That’s been my career.
And from there I went the NMISA and it’s a very exciting place – a place of science that I’d never thought I would end up in. Bit if you let me talk, I can talk the whole day about what metrology is, how lovely it is and why it is important.
CIARAN RYAN: Right. What drew you to the world of accounting? You said you were kind of inspired by your teacher at school, and your family was involved in business. So I guess numbers were always part of your table discussion.
CALVIN SEHLAPELO: Yes. As I say, it’s something that you fall into. It’s something that I was not aware of. So the affinity for numbers I would honestly put down to my high school teacher, who said: “Look, there’s this profession that is called the CA route. This is what you do. You are good at this accounting thing, have a look at it.” It was from there. We didn’t have mentors and people who would actually explain what this whole thing was [about]. But I looked at it, found it interesting. At varsity I really loved it. I was torn between engineering and accounting, but my drawing skills were not that great. So I decided let’s look at the CA route. And it was just from there.
CIARAN RYAN: Did you find you had a natural gift for accounting?
CALVIN SEHLAPELO: It was just a natural gift that I had. I did very well in matric in accounting; that was my best subject. So from that natural gift she steered me towards the CA route.
CIARAN RYAN: Let’s talk about the role of the CFO and senior financial executives generally. Their role is changing, would you not agree – the things that you’re having to learn that you don’t necessarily get taught in accounting schools. By that I mean strategy. You’ve got to be a good communicator, you’ve got to be able to take a complex subject and communicate it to people who don’t have the same background as you, maybe people on the factory floor, everybody. It really is the storytelling side of the business when you’re trying to push a strategy. Maybe just elaborate from your point of view what changes you’ve seen in this role over the years.
‘One of the most underrated interpersonal skills is listening’
CALVIN SEHLAPELO: I think one of the most underrated skills – we talk about strategy and all of those things – one of the most underrated of the interpersonal skills is listening. When you are in that position, you get a lot of people who talk to you. You get people from different levels; some people will say what’s on their mind and others will try to nudge you toward a certain area that they don’t want to clearly come out of. If you’ve learned to be a good listener, you then are able to understand what the organisation is going through at the floor level, and able to communicate and develop a strategy that talks to what your organisation really requires because, sometimes when you’re sitting at the top, you forget to go down to the bottom and truly listen to what is happening.
From my perspective, that’s one of the things that we need to keep bringing up – to say “be able to listen; that will allow you to then be a better strategist, a better leader, and a better communicator”– because you are not pushing things that are just in your own understanding, but things that the organisation really needs. So listening for me is one of those things that I take as a main skill that sometimes is underappreciated and needs to be brought to a lot of senior executives.
CIARAN RYAN: Is that something that you learnt out of necessity through experience? Or were you just naturally that way – that you would listen and try to understand the other person’s point of view?
CALVIN SEHLAPELO: From an accountant’s perspective our minds are always risk-based, numbers are clicking in your head, and you’re already trying to figure out how to solve the next problem. I don’t think it comes naturally to us. It’s something that you recognise as you go along. But, if you actually listen to what the people are saying, you would get more done. You would understand where the issues lie. Some of that I’ve had to truly work on as a person, to say “calm yourself and listen with listening”. Sometimes we think listening is just being quiet and allowing the person to talk, but it’s truly listening and trying to understand what’s being said.
CIARAN RYAN: And then, just following on from that, are there some things in your career journey that you are only going to learn through experience, things you’re not going to learn in accounting schools? What would those things typically be?
CALVIN SEHLAPELO: My friend, I’ve been in the public sector for a while, and one of the things is organisation politics. As much as there’s not supposed to be politics, in a political environment it’s navigating through politics. There I also think a good mentor becomes critical. Those are the things that you learn with experience, you learn how to navigate, when to navigate, when not to navigate, and whether you are moving in the same direction or not.
So for me, organisational politics becomes critical. There are things that you learn through trial and error, there are things that you don’t get taught and things that are critical. I always say, as much as people say we’re not taught HR and all the other disciplines, those disciplines you pick up pretty quickly. Politics is something that you learn as you embed yourself into an organisation.
CIARAN RYAN: And it’s sometimes like a street fight, right?
CALVIN SEHLAPELO: Definitely. [Chuckling] You have to know when to be a street [fighter] and when to be calm about it and deal with it in a negotiated manner.
CIARAN RYAN: I bring that up because the South African Institute of Business Accountants introduced this designation Certified Financial Officer, or CFO SA, which is basically in recognition of these competencies that you’re not going to learn in school, so you have a certain amount of experience. Things like this political issue that you’ve been talking about – some people can get crushed by that. You also have to learn to deal with people, and this is not anything to do, apparently, with technical accounting, but it is really whether you advance in your career or not is going to be determined by how you navigate your way through all of these challenges which you’re not going to learn in school. Would you agree with that particular viewpoint?
CALVIN SEHLAPELO: Most definitely. I think we sometimes forget that with all the technical matters and all of that there are people at the end of the line, and people have different understandings of where you might be thinking this is the right route or not. And learning and dealing with those kind of issues is what makes you come out unscathed, if I can put it that way. And sometimes you take the knocks with the good and understand and try to say we’re moving in the right direction. That’s how you deal with some of these things.
Like I said, having a mentor also settles you down a little bit, somebody who you can vent to and cry, and somebody who can say, but have you thought of this, have you thought of that? That’s part of learning through experience. One of the things that I got from one of my mentors was “if you think somebody doesn’t know anything, you’ve probably missed something”.
And when you deal with numbers and you know numbers inside out, you sometimes think but how can somebody not see this, and you forget that it’s sometimes not just about the numbers.
CIARAN RYAN: it reminds me of Warren Buffett saying, “If I can’t understand the financial statements, then somebody’s trying to make it so that I don’t understand it.”
CALVIN SEHLAPELO: Definitely.
CIARAN RYAN: Okay. You’ve obviously had several mentors along your career journey, right?
CALVIN SEHLAPELO: Yes.
The Association for the Advancement of Black Accountants in Southern Africa
CIARAN RYAN: You’re involved with the Association for the Advancement of Black Accountants in Southern Africa. What is that body, what is it trying to do?
CALVIN SEHLAPELO: At the basic level as we started there were very few of us in this space. I remember my first day of doing my articles, there were probably four of us in the whole unit. So it’s trying to build a community, to build a support structure. So in terms of when you’re writing your board exams, it’s somebody to say, you know what, it can be done. At that point we also had a lot of people who were not passing the CTA. We support them in terms of quality training, emotional support, that kind of stuff to ensure that as a community we grow and just support each other.
CIARAN RYAN: Right. Okay. Certainly the South African Institute of Business Accountants there is a majority of black accountants in that body. It’s very encouraging to see this, and a younger generation that is really quite entrepreneurial. They’ve grabbed IT and understood it, and are applying it to the accounting profession in ways that you weren’t seeing sort of three or four years ago. That’s my own personal experience with it.
But it is encouraging to see the number of people who are coming out of the school system who are choosing the accounting profession for a variety of different reasons. Some want to go entrepreneurial, some want to work in the corporate space. But it is definitely happening. Is that your experience as well?
CALVIN SEHLAPELO: I’m glad that there are more and more coming out – there are more and more. We look at the entrepreneurs, and my gripe would be that we say these guys don’t understand finance, don’t understand that. And I’m glad to see that the numbers that are coming out are encouraging, the numbers who are writing your CTAs or your board exams or your management accounting exams. It’s encouraging, it’s coming up. Nowadays you’ve got all this social media support, and it’s really encouraging to see the numbers that are coming up and the numbers that are saying, – well, we can have entrepreneurial ventures, let’s go out and do those kinds of things – and those that say, we are going to maintain the corporate side of it. So it’s become very, very encouraging. I think when ABASA was first flighting, it was looking bleak, but the numbers really have come up and supported these initiatives.
CIARAN RYAN: Okay. Just a couple of quick questions before we wrap up. What do you do in your downtime? What is your weekend activity or evening activity?
CALVIN SEHLAPELO: Oh, I got myself a little old 4X4. I enjoy being outdoors, taking the boys out to a 4X4 trail and just being out in nature. I’ve tried my hand at fishing, and hopefully I get better at that. But I just enjoy being in a 4X4 and going up and down mountains.
CIARAN RYAN: You’re a family man. You mentioned your boys – how many boys?
CALVIN SEHLAPELO: I’ve got two boys.
CIARAN RYAN: Two boys – 14 and?
CALVIN SEHLAPELO: Six.
CIARAN RYAN: Okay. And any books that you would recommend?
CALVIN SEHLAPELO: Oh, books. One book is called Fortune at the Bottom of the Pyramid. I think that book talks about how you can service the bottom of the pyramid – which is basically the lower LSMs, which is where we find ourselves – by also giving them a service, a product or a unit that they themselves require; and that as businesses we shouldn’t just assume that because it’s a lower LSM they do not have the capacity to support our business. I enjoyed that book. It’s probably something that is, as I look at retirement, about things that one starts to think about.
The other book is Non-BS Innovation by David Rowan. It also talks about types of innovation that can be done without having to develop the next iPhone or that type of thing – but a simple innovation that impacts on the lives of people.
Those are the books that I have enjoyed. Fortune at the Bottom of the Pyramid was quite a while ago, and Non-BS Innovation is quite a new book that I really enjoyed and couldn’t put down.
CIARAN RYAN: Wow. Calvin, we are going to leave it there. What a great discussion. I really appreciate you coming on and sharing your story and your insights into the role of finance executives and how that is changing – some great little insights there. I really appreciated the fact that you come from a world where your family was involved in business and you were encouraged to become an accountant – and how you took that and just applied it to the very, very highest level that there is in the accounting profession I think is an inspiring story. And I think the work that you’re doing with the Black Management Forum and the Association for the Advancement of Black Accountants as well is kind of laying a path for others to follow. That is so vital and often can be neglected.
So I really want to thank you for coming on and I’d like to stay in touch and follow up with you, because I think the other big story that we really need to keep on top of is what is going to happen with this Africa Free Trade Agreement, and your role as the National Metrology Institute in that. So please let’s stay in touch.
CALVIN SEHLAPELO: Thanks for having me. Let’s stay in touch. The African Free Continental Trade Agreement doesn’t just talk to Africa. It talks to other countries, your Eastern countries, your South American countries. So it’s part of opening up new markets and new players outside your traditional, if I could call them that, G20 countries. It will be a very interesting thing. And thanks for having me. Let’s do keep in touch.
CIARAN RYAN: We will absolutely do that. Thank you so much. That was Calvin Sehlapelo. Thank you, Calvin. Have a good day.
CALVIN SEHLAPELO: Cheers.