Bravura Alumni Society
February 2019 Spotlight
Neil Grobbelaar – Group CEO of Real People
Neil Grobbelaar is the Group Chief Executive Officer of Real People, a micro-finance company that provides home improvement finance through short- to medium-term unsecured loans for individuals and SMEs, as well as undertaking debt collection by facilitating an affordable yet reasonable resolution to problem debt.
Neil worked for Bravura Corporate Finance for about 5 years from 1999 to 2004, before leaving to take up a position as Head of Strategy at Real People. A couple of years later he was promoted to deputy Managing Director and thereafter joint Managing Director at Real People. Neil has been the Group CEO since 2013.
Bravura interviewed Neil as part of our twenty year celebrations. We transcribed the interview below – enjoy the read.
- What drives you?
I think having a sense of purpose. That, and sheer panic and terror at times.
A business such as Real People undoubtedly gives you energy and drive. But operating in a high-risk environment is not for the faint-of-heart. You’ve got to be at ease with uncertainty. The market that we play in is vulnerable and when the economy goes south our target market is hurt first. We’ve seen it in the past. People in the lower income market don’t have significant financial reserves to fall back on, so they are vulnerable to unexpected change.
Also, we raise capital intensively so as a business we are very dependent on investor sentiment.
Let’s say that there is a healthy level of idealism as well as stress!
- Describe your most compelling qualities?
I would say that I perform well under pressure and that I am a good communicator.
- How would staff, colleagues and stakeholders describe you?
I can be pedantic, I’m quite fussy and detail-oriented. I don’t suffer fools gladly and I can be impatient.
How do I know this? At Real People we made a conscious decision to invest time and effort into extensive anonymous 360-type assessments so that no one can ever plead ignorance as to how they’re viewed in the work environment. We live in a nice, uncomfortable “development space”.
What I’ve had to learn (but have by no means perfected) is to manage my approach and to connect with people at their level of comfort in order to enable constructive communication and a positive environment.
- Can you expand on the notion of the “development space”?
As a company, we embarked on a values journey around eight years ago and this had a major impact on our business. Once we started self-assessing our strategy, our business and ourselves, we made significant changes.
An example of this is that we used to offer unsecured personal loans in addition to our home improvement products. Personal loans are often used by the borrower for the wrong reasons and they find themselves sucked into a cycle of debt from which they cannot escape. The decision to close the personal loan offering had a massive impact on the business at first, and in retrospect, the decision to close it could have taken us out of business completely. However, as we continued on the values journey, we could no longer reconcile our values and vision with this product line.
- Do you live the values of Real People?
Very much so. We went through a comprehensive and scientific process to find and articulate our values. It was a bottom up process. We surveyed our employees and customers to find and crystallise a set of values that would cover the desired state for both those groups.
Our fundamental philosophy, especially given the industry that we are in, is in sustainably improving lives. Our industry can be classified as a frontier-type industry as we take relatively high risk and we bring products, services and solutions to markets that are not traditionally serviced.
To compensate for high risk you could simply price for it and pass the cost on to the consumer, but this doesn’t take into account the customer who has few options or is unfamiliar with the product and unable to assess unreasonable cost or what is best suited to them. We have to be conservative in the way that we operate. Our aim is to provide value enhancement rather than a destruction of value.
- When did you work at Bravura?
I was actually employee number one or two. Twenty years ago, I met Soria Hay through a very old friend of mine. Soria mentioned that she was starting up a corporate finance firm and as I no longer wanted to remain in legal practice, I grasped the opportunity to join the new firm. In those days Bravura consisted of Soria, the personal assistant Liz Lowe and me. Soria sub-let one office in the offices of one of our major clients and Liz and I shared a desk outside her office. Ian Matthews, Soria’s other co-founder, joined a few months later.
- Any professional memories or milestones that occurred during your time at Bravura?
Although I had studied accounting, I initially went into politics after university in order to work in the 1994 parliament and play my part in the political transformation that was taking place. I also studied law part-time.
I would say that I was a complete novice when it came to corporate finance. I was tremendously fortunate to have been mentored in those early days by both Soria Hay and Ian Matthews, co-founders of Bravura. I was like a sponge; I learnt so much from them. They had a huge impact on me, both personally and in the development of my professional skills.
- Congratulations, you’ve just been elected the new president of South Africa. What is the first order of business?
In no particular order, I would flush politics out of education. The fundamental challenge that South Africa faces to achieve some form of sustainability is to reduce the inequality gap. If we don’t make progress and people lose hope in the gap ever closing, then we are truly lost. When people lose hope and believe that the future is darker than the past, their behaviours are very different.
If someone has no capital with which to grow wealth and reduce poverty the only option available to them is to acquire skills. If we don’t reform our education system, we will be unable to provide people with that critical opportunity to acquire skills.
The second thing is that I would try to get rid of the credit burden that lower income South Africans are facing. Expensive credit taken for the wrong reason is probably the worst life decision a person could take. Too many South Africans are over-indebted, causing daily hardship which adds to the hopelessness.
As the global financial crisis showed us, this is not typical to a particular demographic or country. But in South Africa we have some unique issues. A significant proportion of our population never grew up with credit in their homes or the benefit of an embedded credit ethos. Responsible lending combined with thoughtful debt collection that provides fair and reasonable resolution for all parties can help ease the burden of debt.