CEO of W. Consulting Bruce Mackenzie CA(SA) shares his experiences establishing and growing his own small business into a global consultancy. By Eamonn Ryan
While many of today’s school leavers cite money as their major inspiration for wanting to become a CA(SA), that novelty soon wanes. In the case of W. Consulting CEO Bruce Mackenzie it wasn’t a motivation at all. Working in an investment bank in London, having earlier been posted there to join Deloitte’s technical division, he decided he wanted to add value in more ways, he says.
Pining for South Africa, he returned only to realise that a BEE fuel-injected corporate environment was not conducive to the ambitions of a young white male, so he opted to establish his own business operating initially from home. ‘I’d spotted a niche for an IFRS-advisory business operating in the space between the auditors and client. The large firms can no longer offer certain advice, due to regulations monitoring the independence of auditors – while their clients are increasingly in need of advice on how to structure their deals. Our niche is to look at what companies want to achieve in their transactions, and advise them on how to get to that point. Auditors would like to offer the advice themselves but can’t and would rather their clients come to an independent adviser rather than one of their Big Four competitors,’ explains Bruce.
This business soon expanded to include training (CPD) and e-learning product development, today covering 20 countries. W. Consulting has offices outside South Africa in Mauritius and London, and Bruce spends much of his time in London ‘plus a huge amount of time in planes’.
Though he lauds the CA qualification as ‘opening doors all over the world, with the CA(SA) qualification being particularly highly regarded’, he believes the CA(SA) ‘should not define one’s career’.
Bruce admits it was a nerve-wracking decision to go on his own, as CAs(SA) are taught to be risk-averse. ‘It’s very tough to throw away a CV,’ but rather than spend a life regretting not taking a chance, he advises those with thoughts of running their own business to do so sooner rather than later, as the decision only gets tougher with each passing year. He admits the decision is somewhat easier for a CA(SA) to make than for many other people — ‘after all, the worst that could happen is you go back to your day job as a CA!’
BEING THE BOSS REQUIRES SELLING
One point seldom emphasised enough when talking of entrepreneurs is that it is very hard work and requires a great deal of energy and perseverance. Bruce attributes his eventual success in large measure to a high energy level. ‘You need that. It’s exhausting – long days, early flights to London to deliver training, and sometimes back again the same day. I still spend a lot of time in the UK, and in the early days it was more. So, yes, you need a surplus of energy.’
You also need a predisposition towards selling, as any business requires sales in order to expand. Selling, says Bruce, is something that’s in his DNA. ‘Especially when selling advice, it requires persistence because I know that a potential client will at some point need services like ours, so I make sure W. Consulting is top of mind when that day comes. I achieve this by keeping up the relationship, sending new ideas with no sales angle connected, mailing interesting books, checking on how things are with the client. It’s a matter of having genuine interest.
‘The biggest challenge in our industry is awareness. The most frequent comment I receive from new clients is “If only I’d known I’d have come to you earlier”. So we work at raising their awareness of our service offerings. We don’t need a big marketing budget, and we don’t often lose clients,’ he says.
There are many risks in establishing your own business, says Bruce, and one of the first challenges stems from the need to expand beyond a one-man operation. ‘There’s a certain comfort in doing all the work and seeing all the cash in the business as yours, but it puts a fairly low ceiling on the business’s prospects and potential income.
‘The decision to expand and hire your first employee is both a big decision in itself and important as to the individual you select. It’s the biggest single decision most entrepreneurs have to make – and one that most don’t make early enough. You need to scale up a business to release resources at the top. That process never really ends – whatever you’re currently doing, you have to continually ask yourself: “Could this be done down the line?” ‘
EMPLOY LIKE-MINDED PEOPLE
‘In a small business each hire, but especially your first, has to be somebody you can trust, someone with the same objectives as you. You can’t have 9–5 people, but rather someone who will do whatever is necessary. My philosophy is to hire people with passion and who preferably know what they’re doing, and then pay well to get them.’
He believes that with ‘good hires’ many issues regarding values such as integrity and ethical behaviour become resolved. ‘Because we’re in a phase of building momentum to grow the business, we are aware of the need to always deliver value for money and will not bill any client if he’s dissatisfied. We want repeat business, not one-offs,’ explains Bruce.
The senior leadership team, and a large portion of the other 22 staff and some part-timers, are CAs(SA), making for a particularly strong leadership team, says Bruce. A big challenge for him in the early days of the business was surrendering authority, but having taken that step a large part of his role is empowering others and driving responsibility down the organisation (made a bit easier by the fact it’s an especially flat structure). His fellow partners are each owners in the business.
‘We encourage all staff to innovate and share ideas, and the flat structure facilitates this. We realise we have to be the best at what we do, which is advising large corporates, such as JSE-listed companies and banks, so we make a substantial investment in learning, as well as sharing that learning. As a management team, we spend a lot of time on various SAICA committees.’
Bruce himself has been appointed to the IFRS Interpretations Committee, an international honour which he describes as ‘the highlight of my career’ and an endorsement of the business’ achievements.
With a flat structure and high-quality team, mentoring is in one sense all important and in another unnecessary. ‘It tends to happen informally as a function of our open-door policy, and all the time. It’s in every conversation, even with the tea lady.’
As CEO, Bruce is the focal point of expanding the business. In the last two years he’s opened an office in Mauritius and a ‘virtual’ office in London (despite a staffed office, the bulk of the work is done digitally by staff based elsewhere). ‘International work is important to us, because it’s the same amount of work as if it were local, and the exchange rate makes it more meaningful to our bottom line.’
Having surrounded himself with top accounting brains, Bruce’s management style is inevitably a consultative one, ‘or why have them?’ He endorses the often-expressed entrepreneurial philosophy of never being the brightest person in the room. The culture means the business is wired for quick decision-making — quick, but not reckless, because a wrong decision will hit their individual pockets dearly.
Even though he’s the only white male out of four directors, Bruce calls black economic empowerment (BEE) one of the firm’s biggest challenges, because none of the other partners qualify under the restrictive BEE legislation. ‘Local black CAs(SA) are priced out of the market for a business such as ours. And with them receiving such high salaries in the corporate world, why would they take the risk of becoming an entrepreneur?
‘BEE is a big challenge for us, as clients require it. But BEE legislation doesn’t take account of a small business like ours, and limits our growth in certain respects. I worry about the skills shortage in South Africa, and that the scarce skills we have will consequently leave the country for greater and equal opportunity. We need those skills – I need those skills!’
INTEGRITY IS THE WATCHWORD
Bruce is always watchful for mediocrity. He realises that not all staff can be highly motivated, and that in fact there is a place in all businesses for those to whom a job is just a job – ‘but the danger I watch for is when a culture of mediocrity creeps into middle and upper management’.
Integrity is core to what the business does, because it forms an everyday core of their advice. ‘Clients typically want us to look at helping them achieve a certain goal, and while we’re innovative and creative we sometimes reach a certain point beyond which a structure cannot go. Unlike auditors, we can easily be fired if we do not satisfy what a client wants, yet we stick to what is permissible.’
With his experience at W. Consulting, and in his training, Bruce believes CAs(SA) make some of the best entrepreneurs and that more should follow that route – ‘though they need to become more comfortable with risk-taking’.
Being an entrepreneur and taking risks inevitably raises the potential for failure, and Bruce believes South Africa needs to embrace failure as part of the learning curve of entrepreneurism.
‘In the US, for example, a business failure is regarded in the same light as an MBA – a priceless learning risk-experience from which you can bounce back. In South Africa, you’re blacklisted in a very negative sense, with everyone seeing just the failure not the learning. This discourages entrepreneurs from trying again and building on their experience.
‘Most businesses fail not for want of an entrepreneurial idea, but they fail because of management and accounting basics like cash flow. CAs(SA) already understand these basics and so arguably can concentrate on the actual operations of the business. However, because CAs(SA) can earn good money in the corporate world, most opt for the easy route in the corporate environment.
‘South Africa does not have a great culture for small business – there is not a lot of support for them outside the micro-business environment. It frustrates me that a lot of funding for black business and black industrialists misses the bigger picture of entrepreneurism.
‘To open your own small business is never a waste of your CA(SA) training. However, we should all follow our passion wherever it lies –whether it’s in business, the corporate world or auditing.’
The future of is to keep on doing what it’s doing well. He attributes the success of the business to its culture of continuous innovation: ‘It’s easier to sell something new.’
FIVE TIPS FOR NEWLY QUALIFIED CAS(SA)
- Take risks and chances
- Travel – the more experiences you have, the better. If you return with international skills, you’re worth more
- Keep learning, even if you feel you’ve had enough learning after seven years of qualifying
- Don’t settle for a 9–5 job or mediocrity
- Have fun, and if you’re not having fun, change jobs. Too many people hate what they’re doing
Author: Eamonn Ryan