124: Khaya Gcobo

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From Raw Survival to Success

Orphaned and the sole breadwinner at the age of 14, Khaya Gcobo has risen above every challenge to successfully work his way up to Financial Director at CirroConnect, he shares his remarkable journey with CFO Talks.

 

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 corporations. CFO Talks is a brand of the South African Institute of Business Accountants. What a pleasure it is today to welcome Khaya Gcobo, he’s part of a younger generation of finance executives taking a non-traditional route to the C-suite. He’s also currently Finance Director at CirroConnect, which is a company using cloud computing, automated processes and web solutions to improve business delivery and efficiency. Now, prior to this, he worked at Volvo Southern Africa as a Financial Controller and before that, he was at Absa Barclays as a Financial Advisor. These are highly competitive multinational organisations and that’s given him an exposure to working in high-performance businesses, both locally and internationally. He has an MBA with a strong focus on financial disciplines, and he sees the modern finance executive as someone who must, above all, be a creative thinker, this is a subject we want to get into with Khaya in a couple of minutes. So welcome, Khaya, perhaps let’s start off with a little bit of an introduction to CirroConnect and what it does and tell us about that, the business itself.

KHAYA GCOBO: Thank you for that, Ciaran. As we know, we are living in a digital age and everything is digital now, so CirroConnect is in that space. We use cloud computing, automated processes and webs solutions that can provide business solutions. Even currently we are using cloud, so everything is moving to cloud, CirroConnect focuses on that. Even with storage as well, we are moving away from having papers and lots of documents, so cloud storage, accounting services, that’s what CirroConnect focuses on, and also e-commerce, websites, so basically cloud business.

CIARAN RYAN: Okay, so you’ve come from the corporate world, you were with Volvo Southern Africa and before that you were with Absa Barclays, what made you make the move CirroConnect?

KHAYA GCOBO: As I said, we are living in a digital age, so the traditional methods of doing businesses are slowly fading away. So now if you are not involved with tech, unfortunately you are going to be left behind. When I saw how CirroConnect does business and how the future is looking for them as well, it made me interested, as currently technology [unclear 3:00] now, so everyone in the company needs to be on board.

CIARAN RYAN: Tell us a little bit about yourself and your career journey. Where did you grow up and go to school? You’re from the Eastern Cape, judging by your name, but maybe you didn’t grow up there. Tell us about that.

KHAYA GCOBO: Yes, my parents are from the Eastern Cape, but I didn’t grow up in the Eastern Cape, I grew up in Vosloorus, which is the east of Johannesburg, I was born and bred there. I have got two siblings but unfortunately, in the year 2000 I lost my parents and I had to be a breadwinner for my younger brother, there is a three-year difference between us. So at school I had to take breaks and, for example, on the weekends I had to go and work somewhere so that I could provide for my family, and it went throughout high school as well. For tertiary I got a scholarship to study for a BBA and I took it. It was an American scholarship, they came here, with Bakerville University. They provided scholarships for African kids, so I took it and I went with it. After that I completed my MBA in 2014 with Bakerville University.

CIARAN RYAN: So the BBA is Bachelor of Business Administration, then you followed that up with an MBA, also with Bakerville, is that the United States?

KHAYA GCOBO: Yes, in California.

CIARAN RYAN: Just talk about that for a minute because you obviously have an affinity for numbers and accounting, but you did go the MBA route, why did you do that?

KHAYA GCOBO: I didn’t want to be only exposed to the technical side of accounting because I wanted to get deep into the whole business spectrum. With accounting you only focus on numbers but with the MBA side of things you look at the whole business spectrum. For example, how the business works, how sales are generated, the marketing and you become a business partner, so you are able to wear different hats.

CIARAN RYAN: Finance executives, that whole role and the discipline around finance executives has changed over the years, and we’re beginning to see a lot of people like yourself who are taking a non-traditional route into senior financial positions. I might just want to bring in Nicolaas van Wyk, the Chief Executive Officer of the South African Institute of Business Accountants here just to talk about that. Nicolaas, can you just give us a little bit of background, are you also seeing this kind of non-traditional approach towards senior financial positions in the marketplace?

NICOLAAS VAN WYK: Yes, it’s been an interesting development over the last couple of years. This last week I saw an article that said nine out of ten CFOs in Europe do not have an accounting background. That to me is really revealing, I think it reflects the changing nature of the role of the CFO. In certain countries like South Africa, where we still have very much a UK influence in our education model, we still follow the BCom route and that is what’s very familiar to most of us, if you want to enter the finance section or finance department. But what we find is that most CFOs then add to their BCom or to their BCOm Honours, an MBA, and that shows how involved they now are in business. They are more than just number crunchers, they need to sit on boards, and they need to be able to interpret those financial figures and connect them with the business, so that the business runs more efficiently. This pace has just increased due to the lockdown and Covid and globalisation. So we see this trend happening more and more.

CIARAN RYAN: Khaya, would you agree with that, that there is a demand, the accounting route is quite limited, it’s quite technical. Maybe some people would disagree with me on that, but in order to get a bigger exposure to business and the different disciplines that there are, the MBA route is becoming more popular.

KHAYA GCOBO: Most definitely, Ciaran. As Nicolaas said now but unfortunately in South Africa our education system is UK-based but now lately a lot of people are going through the MBA route so that they can understand the business in general as well, not just the technicalities of accountancy because you need to wear different hats when you’re running a business. You need to know what marketing is doing, what the sales department is doing, and you’re not just looking at the numbers, you need to understand where the numbers are coming from and how you can influence the numbers to make good decisions for the business.

CIARAN RYAN: Nicolaas, just bringing you back in again. There’s been quite a lot of research that’s been done internationally about the evolving role of the CFO. There’s a study out of Queen’s University in Canada about from CA to CFO, talking about these new disciplines that are expected of the CFO. For example, strategy, team leadership and communications because you’re not going to go very far if you cannot communicate the strategy in business. Tell us a little bit about that and what are these disciplines and how the South African Institute of Business Accountants has adapted to that?

NICOLAAS VAN WYK: Yes, Queen’s University wanted to understand what competencies are required of the modern CFO and then they compiled a research paper entitled Moving from CA to CFO. After interviewing and analysing the job function of various CFOs and from different industries, manufacturing and services and so on, they came up with a list of 34 competencies, which they split into four parts, from [unclear], an operator to strategist and communication expert, and underneath them there are different sub-categories. So what we did was to say, if this is the case with the CFOs, how can we as a professional body adjust our designation to reflect that. So we registered the designation with SAQA, the South African Qualifications Authority, for CFOs. We are the first in the world to have done so and we are very proud of that, it’s called CFO (SA). But it’s mainly just to reflect what business is already doing so that we one, standardise the competencies across industries for CFOs, so that if a CFO moves from one business to another, the employer is assured about what he’s getting. Then also for movement of CFOs in Africa because a lot of CFOs are obviously expats, with globalisation and working with international companies, it’s important that there’s a skills transfer. So we’ve signed up with a global body called the International Association for Finance Executives globally, and we’re working with them to see if we can make this designation a global initiative. But what I would be interested to hear from Khaya is I see on LinkedIn you started off as a financial advisor, moved into a business controller function and then into a financial director function. In your first year of being an FD, what was the biggest adjustment you had to make with your thinking and approach to your CFO role?

KHAYA GCOBO: Yes, when you’re a financial controller you compile the data and you give it to the CFO, and they make the decisions. So now with the new role I have to make decisions, I need to think about the results and how we can grow the business, so I needed to dig deeper. So with the pervious role, I didn’t do that, just giving the finance to the CFO or to the FD so that they can make decisions with an MD. But right now [unclear 11:54] and also communication to the staff as well, so I needed to dig deeper and also do my due diligence as well before providing the material to the group as well, so that they can make a decision.

‘Being creative is a vital part of the new role of a finance executive.’

CIARAN RYAN: Khaya, just talk about this issue of creative thinking, it seems to be something that is becoming expected of a senior finance executive these days, and you already touched upon it, you’re having to look at ways that you can find new sources of revenue in the business. I guess this is very much part of what you’re doing at CirroConnect, how does that creative thinking come into your role as a senior finance executive?

KHAYA GCOBO: It plays a very vital part because, as I said earlier on, the traditional methods of doing business are slowly fading away. So now you need to be agile, you need to flexible, you need to be creative. With the business MBA route, you’re able to focus on all those elements, not just on the finance side of things. Being creative is a vital part of the new role of a finance executive.

CIARAN RYAN: How is CirroConnect, I guess it’s quite a new company, is that correct, is it a new company?

KHAYA GCOBO: Yes, it’s a new company that started in 2015.

CIARAN RYAN: Okay, so it’s been going for a few years. How are you approaching the market, how are you marketing yourself?

KHAYA GCOBO: We’ve got agencies that are currently doing the marketing for us, there’s word of mouth, there’s LinkedIn and there are also advertisements that we are currently running throughout all social media.

CIARAN RYAN: How has business be going, particularly during this last year of Covid?

KHAYA GCOBO: Covid has really had a very negative impact on us. However, with the way we are doing business it’s mostly cloud-based, it’s mostly on the internet, so it picked up and so far we are doing well because companies are adapting to new ways of doing things right now.

CIARAN RYAN: What I was interested about when you talked about your history and maybe we can just pick up from there, it sounds like you had a rough time with your parents and you ending up having to look after your siblings. That makes it extremely difficult. I think people listening overseas might find this quite interesting. It’s one of the challenges that we have here in South Africa is people are having to not only look after family members, extended family members, but also take themselves through the whole educational process. I think you said that you did get a bursary but that was an extra challenge, right, to become a finance executive. Yes, talk about that.

KHAYA GCOBO: Growing up was totally not easy. As I said, I had to grow up at a very early age, it was just my brother and I, with family members dying, there were five of us in the house and then three left us, then it was only my younger brother and I. He was in primary school and I was in high school at the time, but when I came back from school, I had to do piece jobs just to provide for us, so that we could go to school and have something to eat. So it was extremely challenging and very stressful as well.

CIARAN RYAN: What kind of piece jobs are you talking about?

KHAYA GCOBO: Running a spaza shop, helping in a spaza shop or our neighbours sending me to get things for them but mostly in the townships they have spaza shops, so I used to assist them there.

CIARAN RYAN: Was it your own spaza shop or somebody else’s?

KHAYA GCOBO: No, no, no, I was 14 at the time, so I was in high school. When I started high school at age 14 is when it happened, so I had to find some way of income to support myself and my little brother. So I had to do what was needed at that time to survive.

CIARAN RYAN: So you had no other network that you could call on, aunts, uncles, grandparents or anyone like that? You were basically on your own at the age of 14 and having to support your younger brother.

KHAYA GCOBO: Yes, I was.

CIARAN RYAN: And then studying, I guess, trying to fit in school somewhere.

KHAYA GCOBO: Exactly, it was all challenging because now you need to fit in school, you need to work and now you need to look after your younger brother, so it was all challenging, it was not easy. But fortunately, everything worked out very well until today.

CIARAN RYAN: In a way that may be the best learning experience that you could ever possibly have. That you were thrown into this circumstance at a very young age of raw survival, and you pulled through that. I think a lot of people have to go much later in life before they experience that kind of thing. Has that helped you in your career, having been through these challenges early on?

KHAYA GCOBO: Yes, my background has a lot of influence, especially now in terms of making decisions and thinking, but also having empathy towards other people as well. So it helped me and it helped me to be stronger as well, and not to be a yes man, and to have very strong values in terms of what I want to do and how I want to see myself going, or the business going for that matter.

An entrepreneurial background is a valuable addition to an accountant’s toolkit.

CIARAN RYAN: Are there some things that you’re only going to learn through experience and hard knocks, as you’ve already experienced yourself, things that are not taught in accounting schools?

KHAYA GCOBO: Yes, most definitely. As I said, with my background, I have learnt a whole lot of things. While I was in high school and while I was helping, I was doing accounting for them because the tuck shop owners didn’t know anything about accounting or saving money or putting money in the bank. So I had to do all of those things for them, so that helped me as well. So when I got the roles that helped me to go forward and also not to look back at all the negative things that I have had in the past.

CIARAN RYAN: Having a bit of an entrepreneurial background is something I think is quite a fascinating addition to the toolkit of an accountant. Nicolaas, maybe you can jump in here, we’ve interviewed a lot of people on CFO Talks who have a pure accounting background, other people have a bit of an entrepreneurial background as well. In other words, they’ve been in business for themselves, and that seems to have a huge influence in the way that they see their role as senior financial executives. What is your take on that? It really does help, doesn’t it, to have an entrepreneurial background.

NICOLAAS VAN WYK: Definitely, I have met – and I say it with the greatest respect – many auditors, but they are in a certain mould of thinking and that is much more to compliance, policing, looking for fraud and every possibility. Although that has an important place in business, as a check on business, that mindset really doesn’t work at a CFO level. What we have seen from all the CFOs who we have interviewed and the ones I have visited at their corporates, they love teaching and they love setting up a finance team and they love empowering people and allowing them to make decisions. That’s the one element and the other is they’re not afraid to roll up their sleeves and walk into the factory or go down the mine to actually see how the product is being manufactured or mined. So they’re very practical people, unlike the image that we have of a guy in a suit sitting in a corporate glass building, although that element is also there. So they are very much multifaceted and if you break down the façade and you get past that image that we have, then you really see the true human being. I think that’s why they are the unsung heroes of society. They have this ability of understanding business, gathering them into a set of financial statements and making them understandable for a wide set of users, which I think that’s why we started CFO Talks to put more emphasis on this role that they play.

CIARAN RYAN: Khaya, let’s bring you back in here and just talk about that. Some of these lessons that you learn as an entrepreneur are like how am I going to make payroll at the end of the year, how am I going to pay my rent. These things are serious challenges that if you’re working for a large corporation and you’ve never had to face that yourself as a personal responsibility, you’re losing out a little bit just in terms of experience. Would you agree with that?

KHAYA GCOBO: Yes, it’s true, because now when you’re a finance executive, especially when you have gone the MBA route, you want to get your hands dirty, you want to go there and find out what is happening, why aren’t you making sales, instead of sitting in the office and just busy looking at the numbers. So it’s very important to be agile and also getting your hands dirty when it comes to that because at the end of the day, the financial situation of the company is going to affect all of us, not only the people who work with [unclear 23:00].

 

‘I like getting my hands dirty and trying to understand the whole business spectrum.’

 

CIARAN RYAN: Maybe just talk for a minute about the vision that you have for CirroConnect and where do you see yourself in five years or ten years from now. You’re still young, you’re in your thirties, I think you’re in your early thirties. So this is a very interesting space that you’re in at the moment, but just projecting forward, where do you see the company and where do you see yourself five, ten years from now?

KHAYA GCOBO: As I said, I like getting my hands dirty and trying to understand the whole business spectrum. So exploring other avenues for the business is where I would like to take it in the future, seeing the company grow on its own and also being there, seeing the end product, like this is me, I’ve tried to help get the company to where it is at the moment. Also, as I said, trying to understand the whole business. It’s kind of useless sitting and just waiting for the numbers to be presented, while we don’t know where the numbers are coming from, you need to be able to influence the sales [unclear 24:15] the way that needs to go.

CIARAN RYAN: I imagine that CirroConnect has got some differentiating aspects, so you’re not offering the same as what everybody else is. What is your key point of differentiation from others in this space?

KHAYA GCOBO: We do a whole number of things in the company, for example, e-commerce and digital marketing but it’s the turnaround time that we have in providing those solutions to the customers, so the customer doesn’t have to wait for a month for that to be implemented on the system. So it’s just efficiency because with the methodologies that we’re using, our technology, it’s very efficient for us to…we’re using the latest technologies as well. So it makes it easier for us to cater to the needs of our clients.

CIARAN RYAN: And going into the cloud, of course, has its advantages because you don’t have to be location specific. So you could be operating in Europe or the United States or Asia or Australia anywhere, right?

KHAYA GCOBO: Yes, correct and we have clients in Washington D.C. who we are currently servicing as well.

CIARAN RYAN: How did you come across that?

KHAYA GCOBO: One of our clients, our team member was situated [unclear 26:05] Washington D.C., so he saw the need for the service that we’re currently providing here. So he came to us and said this is the need, maybe we can service his client. So we gave the go-ahead to them and it’s currently going well so far.

CIARAN RYAN: Okay, good and does that open the door do you think to other clients in the United States?

KHAYA GCOBO: Yes, correct, it does. We’re just pushing efficiency [unclear 26:35], when they’re running a business, everything has to run seamlessly.

CIARAN RYAN: It has the advantage that you have a South African cost base, but you have a dollar source of revenue. But I guess one of the challenges is that you also have to be very familiar with the regulations in the United States and not in, just in the United States, but in the particular state that you’re in, it sounds like you’re in Washington D.C., which has its own particular set of regulations. Does that pose a challenge?

KHAYA GCOBO: Yes, so with the guy who is currently there in Washington D.C., he’s been there for quite some time, he’s worked there as well, so he’s familiar with the state’s regulations. So it’s not the same as us here in South Africa, so sometimes we need to adjust here and there to meet the client’s needs that side.

CIARAN RYAN: Okay so the United States is definitely an expansion market for you. What about elsewhere in the world?

KHAYA GCOBO: There are also opportunities coming up in London, the UK. We’re just currently in talks, but we’ll see how that goes.

CIARAN RYAN: Interesting. Talk about what do you do in your downtime? Are you athletic or are you a reader? What do you do?

KHAYA GCOBO: I’m a tennis player, I started playing at a very early age. While growing up and before facing those challenges at such a young age, I decided it will help me and my brother because there was an old man who stayed in our neighbourhood and he used to teach tennis. So we asked him, can we come and join you. I was nine at the time and my brother was six. He said, it’s fine, come. So we started playing tennis from that age. We have advanced so much when it comes to tennis but now, we just play for fun. On Fridays we meet up with the guys and just play for fun.

CIARAN RYAN: And were you playing competitively at one point?

KHAYA GCOBO: Yes, we were, my younger brother even made it to the national under 16 team for South Africa. With me, I only qualified for the regionals, for the Gauteng team.

CIARAN RYAN: Your brother made it to the nationals, okay. You must have had a good teacher?

KHAYA GCOBO: Yes, he was very good, he was old and didn’t live for long after that. So then it was a matter of getting sponsorship on our side to carry on, so if it wasn’t a matter of sponsorship, my brother would have been far by now.

CIARAN RYAN: Okay, so tennis on Fridays, and then what do you do on the weekends?

KHAYA GCOBO: I’ve got a family, so I just stay with my family, play with my daughter and go to church.

CIARAN RYAN: How old is your daughter?

KHAYA GCOBO: She’s nine.

CIARAN RYAN: Nine, okay, one child?

KHAYA GCOBO: Yes, there’s one on the way, coming in June.

CIARAN RYAN: That’s lovely, well done.

KHAYA GCOBO: Thank you.

‘When you have got faith, you will try to stay far away from all of those things and do things by the book.’

CIARAN RYAN: And you’re a person of faith?

KHAYA GCOBO: Yes, I am very much.

CIARAN RYAN: Does that help you in your role as an accountant? It’s an important question because accountants need an ethical grounding, right?

KHAYA GCOBO: Yes, exactly, when it comes to accuracy and being faithful in everything that you do, you wouldn’t try to do anything…maybe to avoid SARS or trying to do tax evasions. When you have got faith, you will try to stay far away from all of those things and do things by the book.

CIARAN RYAN: Right, and that just comes naturally, it’s not something that you have to think about and wrestle with your conscience about.

KHAYA GCOBO: No, no, no, it’s really natural.

CIARAN RYAN: We’re just winding up here, but I do have one or two more questions quickly for you. What books would you recommend, something that really inspired you?

KHAYA GCOBO: With the youngsters, especially when they are getting their first jobs, they become so excited and they want to show off, and by doing that they end up getting into more debt. So there’s a book called The Total Money Makeover by Dave Ramsey, it puts things into perspective. Even though you are in debt already, it provides steps get out of debt. I think that’s a very good book for everyone.

CIARAN RYAN: Just talk about that, what does he recommend, apart from just paying it back, I’m sure there’s a bit more to it?

KHAYA GCOBO: Yes, no matter how secure we can feel right now about our financial state but at any time it can change, especially now we have seen with Covid, people think they are fine but with the pandemic, it hit everyone. So it highlights, for example, we need to create an emergency saving [account], so if things happen, you can fall back on that. You need to pay off your debts, use the snowball effect, where you start with the small debts and pay those and once you’ve finished with that one, you go to the next one. When you’ve got money left, you continue growing your emergency fund. Again, investing 15% of your income for retirement is very important, and also plan for the future for the kids’ education, so that when they go to school, they don’t have to take loans and they can be debt-free. So paving a good way into the future for them as well. Mostly importantly, pay your bond as quickly as possible. Lastly, you need to follow up on all the steps to make sure that you achieve your financial freedom.

CIARAN RYAN: Right, I guess this is something that you’ve applied in your life?

KHAYA GCOBO: Yes, I wish that I had got this book earlier on in life but yes, now I have implemented it.

CIARAN RYAN: It reminds me a little bit of the Napoleon Hill book, where he basically says, the first 10% you put away is into your savings, it’s the most important bill that you’ve got to pay and it’s to yourself. The book is called The Richest Man on Earth.

KHAYA GCOBO: Oh, yes, I know that one.

CIARAN RYAN: That is extremely sound advice. The Robert Kiyosaki book, Rich Dad, Poor Dad as well, he really breaks it down into great simplicity and it’s very applicable. If you follow that, you’re going to come out of debt pretty quick and you’re going to build up assets. Nicolaas, are there any final words you want to say here? What I found fascinating about Khaya’s story was the challenges that he faced growing up and how he managed to make it, and these vital lessons that he learned along the way that really put him where he is today. Just a wonderful story. What do you think?

NICOLAAS VAN WYK: I agree with you, it’s quite an inspiring story. We heard similar stories from our Springbok rugby team, and we were just amazed that they could end up winning the World Cup. I suppose a similar thing is true here, somebody from very difficult circumstances can rise above the fray, I don’t know how he did it, but let’s assume it’s hard work, commitment and a few miracles, I suppose, along the way, somebody willing to help. I think that is what SAIBA also wants to do, in our small way we want to assist accountants and people aspiring to be accountants, whether it’s from bookkeepers to the pinnacle of the profession, CFOs, we want to help people get there and uplift their potential. I think there’s so much potential in South Africa and if we unlock that properly, we can really make a difference. I just heard, and this is a side issue about new tax measures. They want to increase the taxes and so forth. But I would rather invest in talent because if we can unlock our potential, then you will get economic growth without increasing taxes. That is what SAIBA wants to do and this is the story that Khaya has been sharing with us.

CIARAN RYAN: I totally agree with you. I think SAIBA has got so many stories like this. Khaya’s is unique in his own way but what is lovely to see is that people are overcoming these obstacles that they have early on in life and making it in the accounting world, and then becoming part of the SAIBA family or getting approved for the CFO (SA) designation, it’s just a wonderful career journey. I just love hearing these stories. So I want to thank you, Khaya, for coming on and sharing that, some wonderful insights there, I really do appreciate it.

KHAYA GCOBO: Thank you, guys, for having me.

CIARAN RYAN: And thank you, Nicolaas, for joining us.

NICOLAAS VAN WYK: Thank you, Ciaran, thank you, Khaya, I appreciate it.

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