“Money, Crisis, Success, Corporations, and You” with South Africa’s Ben Kodisang

 

Ever experienced a money crisis? Money can move mountains. However, it is our relationship with money that determines how well we do on a sustainable basis and how much impact we make. There is a circular power to money. Doing well and doing good is a sustainable money model and moves mountains over time. For Ben Kodisang, a well respected investment money man, capital returns and social returns are not mutually exclusive. In this episode, he joins Anne Pratt to talk about how, in this world of money, power, and investments, future leaders need to develop ‘a good head and a good heart’ to achieve sustainable success. Ben is the Founder and CEO of ALT Capital Partners, a Pan Africa impact investment management business that focuses on private markets. Doing Social Impact Property Investments, he dives deep into the role of business that extends beyond making profits. From his own big investment failure to multi-million investment successes, Ben generously shares his experiences and the hard-won lessons he learned that transformed his relationship with money and investments. Tune in and also discover his ‘Mandela Moment’ that forever changed his relationship with money and his life!

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“Money, Crisis, Success, Corporations, and You” with South Africa’s Ben Kodisang

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Our bold leader joins us from the leafy northern suburbs of Bryanston in Johannesburg, South Africa. He is a results-orientated, dynamic global corporate investment executive and entrepreneurial impact investor. A chartered accountant (CA) by training, he has led some of the largest investment companies in South Africa and Africa with worldwide investments in India, Saudi Arabia, and around the African continent.

He is the Chief Executive Officer of ALT Capital Partners, an impact investor committed to the high standards of excellence in ESG (Environment, Social, and Governance) standards. To date, he has delivered around $0.3 billion in US dollars in the investment pipeline. He co-founded a transformational Infrastructure fund and is focused on renewable energies and real estate.

You won’t want to miss this as we explore and uncover how after multi-decades and multimillion investment successes, his big investment failure was his own, how his “Mandela Moment” forever changed his relationship with money and investments, and why in this world of money, power, and investments, future leaders will need to develop ‘a good head and a good heart’ to achieve sustainable success. We warmly welcome the international traveler, investor, and change maker, Ben Kodisang. Welcome to the show.

LBF 45 | Money

Ben, thank you. It’s always wonderful to connect with you. Thank you for joining this international conversation.

Thank you. It’s always a pleasure to see you. I’m looking forward to spending some time together.

Ben, you’ve had such a wonderful career. You’ve been in the world of money and making successful investments with a number of firsts. The role of the corporate sector is important in how we lead boldly and make the systemic changes we need in the world. What is your view on the role of money and the role of business in the world now?

It does start with money because money is an enabler. If you’re starting a business, you need working and investment capital. I’ve made it my business to understand capital formation, savings, and investments; and how that whole system works to catalyze economic growth and development, which comes from the capital that goes into the companies. The companies employ people. They create a proposition. The cycle goes around from investments to employment and back to returns. It closes the capital loop. Businesses have an important role to play in terms of catalyzing economic growth and development. It is an important term.

In terms of the role of business, we’ve seen discussions about how the role of business has changed over time. Traditionally, it’s always been viewed as the purpose of businesses is to make a profit and create returns for shareholders. In your mind, what is that role? Is it just about profits and shareholders? Is it something more? If so, what?

The current times are interesting. Several years ago, our (global) population was less than 2 billion. It is a different world now. As an impact investor, I’m finding that capital allocators, if you don’t talk impact, like ESG, (Environmental, Social, and Governance), you are effectively relegating yourself to not getting any capital allocation. Finally the investment community is starting to play a far more proactive role with holding leadership to account to provide a balance between capital returns and social returns.

The investment community is now starting to play a far more creative role by holding leadership to account to provide a balance between capital returns and social returns. Click To Tweet

I believe that they’re not mutually exclusive to making good money. You can do that while you do good by leaving the planet in a better shape for our grandkids and making sure that you don’t just look after shareholders. You look at the communities you are operating in and government in terms of the broader stakeholder equation. It’s the future. Those businesses that are still only obsessed with one-dimensional calls and (only) shareholder returns are going to be left behind.

If I hear you correctly, you’re talking about this being the future and the future of investments, but also the future of leadership. Do you have a practical example for us where either a company you went into, or even from your own working life where there was a dark moment, and one had to reassess one’s values and the way one was approaching the investment, or another company you were considering investing in, or a company you were working in? Can you take us back in time to a specific dark moment and challenge and set the scene? How did you feel at the time?

Warren Buffett says, “You must always invest in something that you know and like.” As I was building my thesis around impact investing and alternative assets, prior to that, I had done a bit of work in terms of setting up infrastructure funds that would address the energy crisis or the thermal coal crisis by doing more renewable energy and water.

At the same time, I was thinking about food security in the context of Africa’s growth and population. I decided to learn. Learning was putting my money where my mouth is. I bought two farms in Wellington. This goes back to 2017. We farmed guava (fruit). From 2017 until we hit the crisis, I suppose the crisis materialized for me in 2018. The farms were greatly located. There was no problem with the location of the farms.

Was that Wellington in the Western Cape (South Africa)?

Yes. I didn’t know anything about farming. I employed a farm manager who owned one of the farms. I was in partnership with two ladies. I had 60% and they were 20% each. We bought at the height of the guava cycle because the buying cycle for guava went south. I needed to say, “Operationally, we took a bath.” Besides that, I had some moral issues with the farm manager. Our farm manager started stealing from us, but we couldn’t prove it. On top of that, we ran out of working capital.

By the last quarter of 2018, I was in a dark place. We hadn’t repaid the bank. Operationally, we were making a loss, and the working capital ran out. Families, rely on farm workers. The whole livelihood is based on the operations. At that stage, our partners had to make a call on the farm manager. It was a catch-22 situation, whether to release him or not. We issued him a warning. In hindsight, because we were in Johannesburg and the farms were in the Western Cape, (the physical) distance was an issue. The whole thing was a nightmare.

It was one of those things where I had to roll up my sleeves and crash-course myself into farming. To secure the arrangements operationally, I worked with the manager, even though the trust was effectively broken. I was ready to invest some additional working capital into the business. I learned a lot about stakeholder management because I needed to work closely with the bank to prevent foreclosure. It is what they call it in the USA.

The only thing I was concerned about was that all my income-earning ability was affected. I’m a chartered accountant (CA), a director of companies, and a key man in relation to the Financial Sector Conduct Authority, which is a regulator for financial services in South Africa. Liquidation would’ve meant I lose my income earning ability because I can’t be liquidated (to perform my roles).

I found myself in a dark space. I draw a lot from inside. One of our famous Mandela quotes is, “It always seems impossible until it’s done.” That’s when you roll up your sleeves. You look at your whole persona, and you pick up the courage. You do the analysis of what needs to be done. You get the emotional support. I had a hard conversation with my wife, who, at that stage, was not aware that I had waged so much of our family balance sheet on these two farms.

That’s a difficult conversation. What was your ‘a-ha’ moment in realizing you needed to continue and roll up your sleeves? How did you approach the conversation with your wife?

It was a crisis when I got a letter from my bank to effectively bring awareness to the loan payments, which also made it clear that unless I rectified the situation in 30 days, there would be unintended consequences. That was my bidding platform. I needed to do the responsible thing, which was to own up to my dear wife and explain what was a good investment idea which, all of a sudden, went sour. Besides going sour, it put the family’s balance sheet at risk.

It was a tough conversation. I thought about it. I premeditated and framed the conversation, but I made time to have the conversation. When the time came, all my plans went away. I’m always transparent and honest. I put it ‘like it is.’ There was a huge emotional reaction to that. I’ve always been an astute investor. I made one mistake in my life, but it was a big mistake. I’ll said it to my wife, in her moment of anger, she went through all those various emotions of change.

First, it was anger. She told me what a useless investor I am because I moved away from my investment principles. She was not happy with my lack of honesty because I did tell her about the investment, but maybe not in the same level of detail or granularity that she would’ve appreciated at the time of investment. She wasn’t happy about that. Divorce was also threatened there because of the lack of trust and confidence. I had to start there and give her the space to process. I took it and owned up to it, until I felt, “Enough is enough for me now to do what I need to do. I need your absolute support now.” I needed to be focused. The emotional support was there (for me) from there. I’ve always been good analytically. IQ-wise, I knew what needed to be done. 

Daily Disciplines

Because my (internal) system was haywire, I decided to do the Comrades Marathon in 2019. It’s one of the largest marathons in the world. It is a 90-kilometer race between Durban to Petersburg. It was amazing, from the discipline and the routine of having to train, and when the day arrives, execution is a whole mind shift.

When you cross that finish line, it’s amazing what happens to you spiritually. You find God. 60 kilometers is a big (long) distance. After that, it is the mind, and you become spiritual. It’s an active conversation with God. In the end, you believe in the song ‘Impossible is Nothing.’ All that, gave me the endorphins, energy, and resolve to do what needed to be done. At the end of that year, I sold the farms. I managed to survive an extra year of 2019 with capital constraints. It’s created a lot of innovation and ‘thinking out of the box,’ to get out of there. It was my executive MBA moment.

Congratulations on finishing the Comrades Marathon, Ben. That is a feat in anybody’s book. It takes remarkable courage, daily discipline, and a mindset shift, as you have pointed out. In terms of the farms, if we go back there, I get the a-ha moment. How did you pivot out? What were the key steps that you saw? What was the final resolution in terms of turning around this unfortunate bad investment, which was contrary to your stellar investment career?

The Pivot

It was a series of tough and courageous conversations. One was with the bank. I needed to get the bank to understand the guava cycle being what it was. We had a few years of drought in the Western Cape, which impacted yield, and a farm manager who was lacking in terms of moral judgment.

1. I have to be honest and vulnerable with the bank. The consequences could be left or right. The process helped me fine-tune my stakeholder management because I had to manage through my Relationship Manager, an Ex Co member, and the Chairman of the Credit committee. I went out to build relationships, which meant that stakeholders got to be on-site with me. That was the first thing.

2. The second thing is I had to have a tough conversation with the farm manager. It was an acknowledgment that trust and confidence was lost. Because his family also lived on the farm site, had I chosen to kick him out, he would’ve been homeless. At the same time, I needed to survive this season. I still needed him to still do his job because I was incompetent in terms of farming, and all the relationships with the workers were with him.

We needed to then come up with a pact. I agreed to a profit share of some sort. I forgo a certain percentage of the profits to give him an incentive, in lieu of him effectively taking the majority of the working capital risk, vs. ourselves, effectively relinquishing us as the guarantor. The one line of sight was that at all times, the workers must be paid because a quick way to foreclosure or liquidation is not paying the workers and them going to the courts. That will trigger an event that carries catastrophic consequences for me. It was having a courageous conversation.

At all times, the workers must be paid because a quick way to foreclosure or liquidation is not paying the workers. Click To Tweet

3. Thirdly, it was effectively being active. I needed to find an exit to the assets. I needed to invest time in the Wellington community, the farming and business community of the Western Cape, and try to find the buyer who was looking for these farms, (the same size and the capital), and do the deal. I managed to sell the wine farm early on in 2019. That farm had informal settlers in it. The ‘poison pill’ in the agreement was we had the responsibility to sort out the informal settlers.

I never realized how difficult it is in South Africa to get rid of informal settlers. I had to learn the law, make relationships with the municipality, and find programs available to execute. Long story short, we ended up having to build seven homes for seven families. The families fared well because that was the only way of meeting that condition.

Were those homes built on this farm or built on a different farm?

I had to find another piece of land where farm workers could build homes, and a developer was working on a scheme with a whole lot of elevation and energy saving. It tested me at many different levels, but I’m grateful came out of it with many business lessons and my integrity intact.

You exited the one farm. Did you finally exit the second farm?

With the second farm, we managed to do the second transaction with the same buyer. In the last quarter of 2019, I managed to convince him to buy the second farm. He saw me coming. He got such a nice discount. It was also a hard lesson. Sometimes when your investment thesis does not work, pride should be put aside because loss is an ego thing.

You need to do a new investment case at that point and make a decision irrespective of how much money was thrown in to support the operations and how much you had acquired the asset for. It was the best decision. We needed to make it because I was also buying my sanity. I lost a year of not doing what I was supposed to do in terms of building my business, instead putting out fires in these farming operations, which was not a good investment of my time vs. other opportunities.

That is being distracted in terms of trying to resolve these big issues that have bigger consequences. That’s a powerful lesson. Where are you now? How do you feel now, Ben?

I feel good. We only learn in positions of discomfort. We become stronger by cutting through some personal adversity because that’s when growth emerges. I’ve learned a lot about people. I’ve learned and revisited a lot of what I learned at university, which was academic and now needed to be put into practice. I learned that doing the right thing is something to be done now. It’s not to be postponed because if I become fearful and delay doing what I need to do, it will have huge financial consequences. The value of courageous conversations.

It brings brings me to another question. We know there’ve been a number of corporate failures in the world. There’s a lot of research around the low trust of executive leadership and whether corporate leaders have the courage and conviction to do the right thing for the right reason in the moment, and then the whole issue of accountability. What happens to them when they make mistakes?

We’ve seen in multiple countries around the world where there’s the golden handshake. Are these leaders held to account? What are your thoughts on the issue of what accountability is? Is it being enforced at all? What do we need to do perhaps differently in the corporate boardrooms and corridors around the world?

The Accountability Crisis

As an investor, I blame the shareholders and investment analysts because what’s crept into the system over the last several years is this thing called ‘short termism.’  Before, CEOs were judged, compensated, and rewarded based on the business plans, the vision, and border-approved strategies they put in place, which was normally a 5, 6, 7-year plan, to all that being undone and now a focus on what your numbers are for the next quarter.

The difference between a change of duration from quarterly results to driving a long-term vision is how to survive based on quarterly results. It forces you to make decisions that, most of the time, are to the detriment of the long-term sustainability of these companies because you have to fire employees if your cost line is under pressure. Most of the time, that’s easier to manage because it’s far harder to grow the top line and far easier to remove or reduce costs.

It is far harder to grow the top line; it's far easier to remove or reduce cost. Click To Tweet

In the process, you lose the trust and confidence of your employees because we always say, “Business is about people.” An important stakeholder is unsettled because they don’t know whether they’ll survive for several months, or whatever the case might be. It results in a deteriorating series of decisions that are made by the executives and endorsed by the board. Boards used to play a far more important role.

Unfortunately, in this world of volatility or the type of world that we exist in, these big personalities in terms of CEOs, tend to carry far more influence over the board. The board’s independence, in some cases, has been proven to be questionable by allowing the CEOs to get away with a lot. Because of this fear of losing the superstars or the obsession with retention, a lot of money (through stock options) is designed to retain Chief Executives, and they’re misaligned with achieving the long-term plan.

When you say this obsession with retention, can you explain? Are you saying boards have become more obsessed with not losing the Chief Executive, irrespective of the conduct of the Chief Executive and whether they’re truly representing the values, strategic goals, and mission of the organization?

I’m saying it because retention is a big factor in the board’s dialogue. I suppose too much turnover at the CEO level is also negative for the share price and the organization. A lot of money does get thrown via stock options to keep the CEOs there. I’m not necessarily saying that boards will necessarily condone bad behavior, but boards are not achieving results if the CEO can still provide a compelling case to say it is all part of the long-term plan. I’m finding a lot of inconsistencies in terms of how the board generally has been behaving, relative to some of the CEOs of companies that have done some not-so-kosher things.

What could the impact community be doing differently? What could and should boards be doing differently?

The good thing is I’m seeing a bit of activism, which is coming from all spheres. From the investors, I see a few strategic policy decisions or choices that have been made. Some of the asset managers are committed to net zero by 2030 to force an outcome. I’m seeing the analysts also reviewing their stewardship pillar in how they analyze companies. It’s not about the balance sheet income statement and cashflow. It’s also asking a whole lot of harder questions around governance, succession, pay, and remuneration.

I’m seeing shareholders declining a lot of the remuneration proposals that go to the general meetings. I’m seeing the investor community being a little bit more proactive. Also at the board level, I sit on the board of the biggest thermal coal mine in South Africa. This last quarter of 2023, we spent so much time thinking about the principles of responsible investing. We are looking at the transition from thermal coal to renewable energy. We are looking at demand and supply.

My other boards I sit on, one of our boards is a bank where a lot of policy decisions have been taken. Firstly, in terms of how you fund companies based on their ESG score, how you are able to select, and how we adjust the risk models to better fund companies that are doing good in terms of renewable energy, waste management or water management practices. At the board, it is happening. The boards are playing far more proactive roles.

I’m seeing, for the first time in a long time, the social and ethics committee because boards used to be mainly about the investment committee and the audits and risk committee. I’m seeing the Dow growing up in terms of social sustainability and the ethics committee. It shows that balance is occupying a lot of the board agenda in terms of how to work.

The profile of those committees, the people on them, and their time spent on issues of social and ethics are shifting and balanced in terms of focus, energy, and resources. That’s encouraging, Ben. With this issue of accountability and moral courage, we know that it’s not good for stock prices. If there is a loss of a CEO, there’s a lack of retention.

The other question is, when boards and companies do take firm action, if there’s been some question around the CEO’s performance or executive management performance and do take bold action and are transparent with that, and the appointment of a new chief executive who represents a different set of not only values but behaviors. There’s a short term. What does that do from an investment point of view in terms of the short-term pain versus the long-term gain? How’s that perceived by the markets?

A Furniture Retailer: Zero Consequence

I’ll talk about two big things that have been in South Africa without naming the companies. One was a furniture company, a retailer. The previous CEO, in hindsight, defrauded the business. It blew up the share price and it declined a lot. Lots of poor people lost a lot of their savings and investment in that company. There was an immediate change of the CEO because it ‘blew up.’

It took a little bit of time for the board to take accountability for the action because this took a couple of years in the making. It put into question what the Audit and Risk committee were reviewing. The CEO was a strong personality, a smart man who carried the board, because he was a smart and charismatic fellow, believed him at the expense of doing their job. Over time, there have been changes to that board.

If I say there’s been zero consequence, I’m talking billions of investments that were lost from this company. Until now, there’s no legal case or criminal case against him. He’s still walking around free, except one jurisdiction is doing something about it. This is several years down the line. It is now going full circle. The changes are taking place. I’m seeing a little bit of confidence coming back into that company.

Industrial Conglomerate: Decisive Action

Another company was a big conglomerate industrial in South Africa, where the previous CEO was effectively creating fictitious profits to maximize his own back pockets. The board was decisive in terms of getting rid of him and getting a new CEO. I’ve been impressed with the decisive actions to clean up. As a consequence, the share price dipped deep on the news and has gone better from prior to the disaster hitting.

It took a lot of public discourse because there were many players that were in collusion, and you could argue, turn a blind eye from doing their jobs. Through public discourse, there’s been pressure to focus on the Auditing regulatory body because all those bodies took time to react. The good thing is they did get up, and they’re doing the right things to restore confidence.

The market is rewarding them.

The market is rewarding the good action that seems to be taken.

In your mind, Ben, if we look at this corporate behavior, is it sustainable? If not, are there three key thoughts you have about how corporates can shift the culture that’s operating? Is it sustainable around this condemnation where people walk away without any consequence?

The world has woken up. There’s far more activism now from all spheres of society than there was previously. A lot of people were passive activists. Activism is high now. That behavior won’t be condoned. It’ll be addressed, and the perpetrators will be punished. It’s my view of it because all stakeholders, as I said, I’m seeing them effectively taking a far more proactive role. I’ll give you one example.

In my business, as an impact investor, we are saying that our investment activities (we are into property development, convenience, retail, and shopping centers),  we know what we didn’t know. We decided to partner with the ESG consulting business because we wanted someone to help us think around policy that we can translate to our processes, help focus measurement areas, and help us with the reporting to complete the cycle. We are going to address the energy needs by doing solar as opposed to thermal, or we are going to address water waste. There’s something else if you measure it and you hold yourself to your account.

ESG: A Balanced Scorecard

The example I’m citing is that investors have insisted on contracting and performance. I carry on what our measurement areas are. If we say we are going to create employment, save water, or utilize energy, we are contracting on those things. At the end of the ten-year period, if we haven’t achieved some or all of them, it carries a financial consequence. I‘m also seeing in the boardroom a lot in terms of the KPIs that we set. A lot of those are CEOs and the businesses I’m involved with, it’s a far more balanced scorecard. It’s not about profits. It also includes a lot of the environmental, social, and governance issues.

The key performance indicators for the Chief Executive Officers need to include these other measurements that go beyond finance and profits. It’s also about delivery in terms of people and environmental issues. That is directly linked to remuneration, performance bonuses, and share allocations. Ben, to clarify in terms of your business, are you saying that when you provide the investments, you are setting those contracts in place with the companies you’re investing in? If they don’t deliver, there is a financial consequence to the company?

LBF 45 | Money

I’m saying that my investor is holding me to account, because I’m being held to account. It’s a shared burden with the board. Our boards need to understand the sustainable development goals, the South Africa National Development Plan, and the African Union Development Plan. They need to integrate that in terms of our “epic thesis.” We came up with the top ten policy prioritization from rural development to gender equity and decisive policy. It’s needed to translate into our investment process.

When we evaluate what to buy, sell, or develop, it’s part and parcel of their decision. This also holds consequences for achievement. The point is it’s integrated into the process. It’s not ideal to say, “I believe in shared value, or I’m a sustainable investor.” Show me the evidence. Hold your account. The whole system is being held accountable on a bigger scale.

Perhaps you can share with the audience briefly what your business is and how it works.

As an impact investor, we raise capital from institutional savings funds, which are pension funds, high net worth, development finance institutions, and banks. We raise capital. We pool it into a fund. In our investment activities, we do Greenfield Developments and Convenience Shopping Centers. They’re closer to where their communities live. They’re quite small in terms of size. They’re less than 12,000 square meters.

In the context of South Africa, where we are sitting with a lot of spatial planning legacy from apartheid, the impact that we are making is bringing the economy closer to the people because the people have to travel 50 kilometers to get to the places of work, which carries other social ills from not spending time with family. A huge part of their salary is going to transportation as opposed to their well-being.

By bringing these public places closer to where they live and integrating them into the community, that’s how then we hope to make an impact. We encourage community ownership because we co-create with them. It hold us to account in terms of the jobs that we create, energy plans, and social agenda, as well as completing the lead from the governance, which is the reporting element to stakeholders.

These contracts are in place with your institutional investors that are part of your capital fundraising campaign. That’s where the contracts sit between them and your organization in terms of the conditional use of the funds and being able to demonstrate performance against the investments you make.

(And) in turn with us and our service providers because our service providers also need to be aligned with quality and sustainable development goals that we are hoping to achieve. The whole ecosystem is aligned philosophically and otherwise. If they abuse females from a pay parity because gender equality is a big sustainable development goal of ours, we can get rid of them because then they’ll be falling foul of a key thing.

You’re making these investments directly, Ben, I wanted to check I understood that correctly. Do you have any summary examples of how those investments and contracts are going?

I’ll tell you the story of the past, but it’s an important story to illustrate the point. In the city of Cape Town, the tourist building in Cape Town is called Portside. We did that development. Before it became the skyscraper, it was an old filling station or (gas) petrol station. It belonged to the city of Cape Town. My conversation with the Mayor at the time was that we were trying to buy that piece of land. Because of the city’s transformation agenda, where they were also trying to address an inequity that exists between the haves and the have-nots in the City of Cape Town, we had to do an offset. In Khayelitsha (a township or housing location for poor people), we had a piece of land. The two transactions were related to achieving a settlement.

Khayelitsha is what we call a township. It’s about 10 kilometers from the CBD of Cape Town itself. The demographics are mainly the workers. It’s a middle-class environment compared to the city, which is a bit more integrated and balanced. We did a mixed-use development. This meant a portion of that scheme, we did a residential development because there were a lot of informal settlements in Khayelitsha. We wanted to restore dignity and also help with the density of human settlement. One part was that, and the other part was a shopping center. They have to drive quite far to buy food, clothing, and entertainment. We wanted to bring it closer to where they were.

Community Co-creation

The trick comes into the co-creation process. As a developer, an asset owner, or an investor, historical practice is, “It’s my land. It’s my idea. I can do what I want.” For sustainable development, you have to work with those communities. In this case, because the City of Cape Town was involved with the offset, it went all the way to the provincial government. We had a partnership between the private sector, the provincial government, as well as the City of Cape Town in relation to managing both these two developments.

The benefit that I got from the City of Cape Town and the province was it introduced me to the dynamics of the leadership of Khayelitsha because the community has its own leadership structures. Every Saturday for a few months, I had to spend three hours in the community forums to introduce ourselves, get to know everyone, communicate our plans, and go through a process of co-creation where they said, “They don’t like this. They don’t like that.”

The outcome of that was there was a huge piece of land that we gave to the community to decide what to do with it. That piece between the residential piece and the retail piece. They wanted ‘green space.’ The legacy that we left behind there is we co-created ‘green space,’ which was a park that we developed quite nicely in terms of lawn and where families could have a space to have ‘an element of normality’ during the weekend living. That development clearly created a lot of value for the community. At the same time, it offers us an opportunity to come up with ‘A Trophy Development’, the Portside development itself, which still stands as the tallest building in Cape Town. It is a ‘Green Star accredited.’ It’s ‘a green building.’

I’m curious to know. What are your three key measurements of success with your project? Firstly, in terms of the return on the investment from an investment point of view. Secondly, in terms of uplifting the community, and thirdly, in terms of creating dignified home dwellings for more impoverished members of the Khayelitsha community.

It started with the co-creation process. It was important that the product found resonance with the community of visitors intended to serve. The aesthetics of the built environment itself was important. Secondly, it was important that the visibilities made investment sense because the primary custodian money is that we manage on behalf of others. Investment return and parameters were quite important.

It is important that the product finds resonance with their community. Click To Tweet

How well did you do?

We did well. At the time, we managed to get a design and a feasibility that was above the cost of capital. Investment returns were good. What excited me was the impact that we had in that community of Khayelitsha, the jobs that we created, the dignity that we provided to people’s well-being, and seeing those smiles. When people have pride in public space, bricks and mortar, is quite exciting because it brings spirit and humanity to it. It was about the jobs that we created. The general well-being of the community was immensely satisfying.

It is delivering good financial returns.

It goes without saying.

We’ve all been touched by our global Icon in some way, Nelson Mandela. Could you take us back to a particular moment in time? Mandela always said, “A good head and a good heart are a formidable combination.” This remarkable initiative you’ve described is a formidable combination. Can you take us back to a Mandela Moment or a specific moment? Where were you? What was the situation? How did you feel at the time?

An Awakening

When I got inspired, I did this fellowship with Duke University and the Graduate School of Business in Cape Town. It was called ‘The Emerging Leaders Program,’ but it was about value-based leadership. Ironically, part of the lessons were around ‘servant leadership.’ When the cohorts from all over the world arrived in Cape Town, one of the things that we did was visit Robben Island. We saw where Mandela spent a lot of his time. We came back into the classroom to reflect a lot of that.

What was a dark moment or realization for me at the time? This was around 2004. I was about 34 years old then. I had achieved most of what my parents expected me to achieve in life. What stood out was how ‘anti’ I was. I was 1 of 2 people from business in South Africa because I’m the cohort representing our (South African) society at large. Even though I was a subject mentor expert in terms of what I studied, I found that I was disconnected from life. As people were contributing, I felt I had no voice. I had nothing to give.

Ben, can you clarify? When you say you felt you had no voice, why did you feel you had no voice?

At that time, I did not value what was inside. On reflection, I had been living someone else’s dreams and aspirations. I did not know who I was, what my purpose in life was, and what my individual dreams and aspirations were. That event catalyzed a journey of self-awareness that effectively started. I’ve been going deeper into it.

Along the journey, there are two quotes that resonated a lot from what Mandela had expressed in life. One is that ‘Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure.’ Those words resonated a lot. As I was trying to make my way up the corporate ladder, I was in conflict with the leadership expectations viz-a-viz my authenticity at the time. I was in this personal conflict and discourse between Ben and the organizational ideals. Another (Mandela) statement that resonated a lot is, “There is no passion to be found playing small – in setting for a life that is less than the one you are capable of living.”

Those two statements were incredibly informative in providing clarity to my life purpose. My purpose in life or my mission statement is as clear as saying, “I co-create a world of joy and fulfillment. I do that by caring.” The inverse is also true that I contributed to the chaos in the world by not being accountable and not caring. I’ve seen how it has become true over time as my level of graciousness has improved. Those are my ‘Mandela Moments’ that took me from darkness to self-awareness and self-appreciation. Leadership starts with knowing ourselves because leadership is about bringing who you are to the party and not allowing yourself to be molded into other people’s expectations of what is authentically you.

Was it at various stages during your fellowship? Was there a moment on Robben Island where Mandela was incarcerated for eighteen years? Do you recall a specific moment that stands out?

It was a whole week of immersion because our whole week was about reading a lot, experiencing and leading from Mandela’s leadership from a servant perspective, and a whole lot of dialogue in our group. That week was the awakening for me and what catalyzed the journey. A lot of these teachings, learnings, and inspirational words came in handy as I embarked on my journey.

Ben, you’re in the tough technical world of finance. What do you think Mandela would say now to the investors in the world, the corporate boardrooms, and directors?

I guess it is, “Evolve yourself so that you serve others as opposed to your own individual needs.” All of us utilize our God-given talents to serve, do better, and problem-solve the ills. The world will emerge as a better society going forward and into the future. Be the light that is required. Have the courage to speak out for those without voices. Use your position to do good.

Evolve yourself, so that you serve others as opposed to your individual needs. Click To Tweet

Moving into a couple of fun, fast facts, you had a wonderful farm in the Western Cape, often the home of great wines in the world. What is your favorite wine?

My favorite is De Toren Fusion V. (Editor’s note: a Stellenbosch wine estate in the Western Cape in South Africa, https://de-toren.com/estate/, uniquely situated on a hilltop to capture and blend cool ocean breezes, ancient soils, and terroir perfectly situated to grow some of the finest French Bordeaux-style wines. An iconic Left-Bank five blends and unexpected flavor combinations of dark sour cherry, a tobacco spice, and a touch of aniseed. A sophisticated departure from the daily fermented grape. A soft, smooth tantalizing taste  which seduces the senses and ages well with refined maturity.)  

Why that one?

It’s an amazing story. If you appreciate wine, in the older days, purity is the wine rule. Although you had Cabernet Sauvignon or Chardonnay and blended was a mistake. Fusion was a mistake because it’s a blend that came out well to the point that they engineered it into the beautiful concoction of taste, texture, and smell, which defines the Fusion V. It’s five blends that make up the Fusion.

I look forward to trying that one day. What was the key catalyst moment that led you into the world of finance and investments?

As I was qualifying for being a chartered accountant and I was doing my articles, the only thing that emerged for me was that I didn’t have the personality of an accountant, an auditor, or a tax expert. I did not spend a day longer in my accounting profession. As I was grappling and thinking about what I wanted to do (as a process of elimination), I didn’t want anything to do with mining because I thought it was depleting resources.

I didn’t like industrial manufacturing and retail. The world of finance is what appealed. I did fellowship work to find out about investment banking and asset management. Asset management is what appealed. At the time, there was a song by Whitney Houston. There is something about “whatever they take away, they can’t take away your dignity.”

It was called “The Greatest Love of All.”

I became obsessed with learning a skill that would be uniquely me. I can leverage it into whatever else I want to do in the future. The truth is I admit I had never invested a cent on the Johannesburg stock exchange, but I was fascinated by the capital, the world of finance, money, and how they can make companies and finance grow. I was more intrigued by it. We found fulfillment once I started going down the rabbit hole in the world of finance. Now, I’m almost cracking a few decades into it.

How would you define your relationship with money, Ben?

I did Deepak Chopra’s 21-day meditation course. On day twelve, there is a dedication to your relationship with money. My relationship with money is informed by that. I believe money is good. It enables nourishment. It enables me to support my family and my loved ones. It allows me to enjoy the pleasures of life. It allows me to give and help others less fortunate than me. I embrace money. I believe in the abundance of money. Before then, I used to think ‘it was a sin to have lots of money.’ It was something to be ashamed about, but no more. Money is my friend. It’s like oxygen that we breathe. I’ve got a healthy relationship with money from that point of view.

Money is good. It enables nourishment, to support our family and loved ones, to enjoy the pleasures of life, and to give and help others who are less fortunate. Click To Tweet

The other question I’m curious about is this. You went through this crucible moment in your relationship with money when you’ve had this amazing corporate career of having done multimillion deals and countless deals for large corporates and successful deals. You had your own personal investment crucible around your farms in the Western Cape, and having to extricate out of that in such a way to manage a high risk for you because, as you said, you could have lost your own ability to make money, earn an income, and pursue your career if you were placed into liquidation. My last fun fact question is, how did that experience change your approach to investments?

I’ll go back to Warren Buffett to say, “Learn and don’t invest in anything that you do not know anything about.” It starts there. I’ve been in capital raising, and it is hard to raise money, but when you are successful, and you close out in terms of your funds or whatever you’re raising money for, never forget how hard it was, which means that you apply so much rigor to how you invest it.

There are many opportunities, but you need to do the research. Go to level 1, level 2, and level 3, and be certain that your money is going to work well for you. Even though the experience also could have taught me a little bit of cynicism about people, it defined my private equity investment philosophy. My partners and I believe that intellectual capital is now a community. There are a lot of clever people.

What we look out for are ‘people with hearts because we want people with good manners and hearts.’ The combination of hearts and minds is what we believe differentiates us in terms of what we do. It’s another big lesson. I look for hearts, and I’m a collector of hearts. It’s important to invest in the well-being and what we do. I do not deal with people that were like, “I’m trustworthy,” but they don’t give me good energy, I don’t trust them. I invest to make sure that, inherently, people have good hearts, and those are the people I want to do business with.

LBF 45 | Money

 

What do you think are the biggest challenges facing leaders going forward in the world?

There is so much that’s changing at the moment. I’m disturbed by the greed that I see. It seems to be about accumulating as if there’s a price when we die to say, “He or she with the biggest balance sheet is a winner.” When I look at the levels of inequality in the world, poverty is still dire in most parts of the world. In South Africa, there’s a case in point where half of our population is still in a state of poverty and rising unemployment.

Leaders who are not deliberate, purposeful, and cautious towards addressing those environmental issues of energy, water, and wastage materials and addressing those social ills of poverty, inequality, and gender discrimination will find themselves wanting. I hope and pray that as we engage in discourse, we do more dialogues like we are having, we catalyze and inspire people to think a little bit more beyond money or capital returns and also effect other social returns into the equation to create a sense of harmony in the world.

Ben Kodisang, you are truly a man of head and heart. As Madiba said, “A formidable combination.” Thank you so much for sharing your insights, vulnerability, and consciousness with the world. Thank you for this conversation.

Thank you. It was a pleasure to speak to you.

Take care.

My conversation with my good friend Ben Kodisang reveals and evokes a number of compelling insights like the importance of money, the changing role of business, new metrics for business performance, and the rising tide of impact investing. 

Perhaps the most significant takeaway, seldom discussed, is: What is your relationship with money in your professional and personal life?      What does money mean to you? Is money simply a practical, tangible means of acquiring practical and beautiful things in this material world?    Is it that and an energy force of force for good and an enabler?

John Kehoe once said, “If you want to test a person’s commitment, ask them to put a buck on the table.” The corollary to that is if you want to test the level of commitment, ask them to put more money on the table. Commitment is important, but there is a deeper question. Do you manage your money, or does money manage you? Is money the God that directs you and your behavior in your professional and personal life in ways that you’re not always proud of, or is money an enabler, a force for good, a force for change?

I leave you with the story.                                                                                                                                                                                                 As a young child growing up in an apartheid era in South Africa, my late mother worked pro bono for a well-respected rural mission hospital in KwaZulu-Natal called Nqutu. The hospital was run by two medical doctors, a British husband and wife team, the late doctors Anthony and Maggie Barker. It was a happy and successful place. It served the community well and was well respected nationwide, perhaps ‘The Gold Standard’ for rural mission hospitals in the country.

I recall asking my late mother why Anthony and Maggie did not work in a city hospital or in a private practice where they could and would live like our wealthy medical doctor friends in the city. She paused and said, “Anne, making money is good, and making a lot of money can do a lot of good. Aspiring to acquire nice things and live a good lifestyle is commendable, but the amount of money you make is only one measurement of your success in life.”

She went on, she said, “Anthony and Maggie love what they do. They serve their community with medical and social excellence. Remember that the amount of money you make, (and I have no doubt that you will do well), is not what you’re going to be remembered for. When all is said and done, and you are dead and gone, people will not publish your bank balance or your balance sheet on your tombstone. Instead, it is the difference you’ve made and the lives that you have touched that will be celebrated.”

I have two critical questions. 1. What is your relationship with money? 2. Do you manage your money, or does your money manage you?                  

Until next time, remember that leading boldly is about making thoughtful, clear choices, and bold leadership is about taking bold action one small step at a time, one step for you, but together, a giant step for humanity. Come back soon and join this global Mandela leadership movement for change, because if not you, who? If not now, then when? Take care and take thoughtful, bold action.

 

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