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When you study for an MBA, as Ramab-ulana did at Nyenrode University just outside Amsterdam, the leadership values of Daimler AG are frequent topics in case studies. In fact, by joining the company, Ramabulana and Mercedes-Benz proved to be a perfect match. Ramabulana brings with him not only wide experience in the vehicle finance industry but he also has direct experience acquired at Mercedes-Benz Financial Ser-vices.
Apart from a yearning to drive a Mercedes, Ramabulana's early background wouldn't suggest a career in fleet management. With strength in mathematics and science at school he saw his natural future in engineering and won a scholarship to study chemical engineering at Oregon State University in 1991.
Though Ramabulana is far from being the only qualified engineer to make a career outside that profession, his first postuniversity job in SA was working in the mining industry. "I felt the technical environment a bit limiting. I felt a stronger calling to the world of business," he says. To effect the transition, he enrolled for an MBA and received another scholarship to study in the Netherlands.
His first scholarship was a US one, from the Institute of International Education, whose mandate was to target young, black South Africans pre-1994 to ensure that after the transition the country would have an educated black class.
The MBA scholarship was provided by a fund set up by various SA-based multinationals and administered by the Netherlands' Nyenrode University. The degree is a highly international one, set in English and catering to 25 different nationalities in one class. "That really enhanced my global orientation, whereas the Oregon experience was far more Americentric," says Ramab-ulana.
After completing his MBA he rounded off his international experience by working in Geneva for a multinational pharm-aceutical company. He subsequently returned to SA, where he joined a start-up consulting firm involved in strategic business consulting. "Shortly thereafter I decided to get into finance and joined Nedbank in the corporate banking side."
That was but a short hop to Absa's asset-backed financing three years later (in 2005), with his position as national manager introducing him to the vehicle finance industry. His role involved striking alliances with truck manufacturers, competitors to Mercedes-Benz and Freightliner trucks.
Ramabulana still dreamed of Mercedes and in 2006 he responded to a recruitment advertisement and soon after began discussions with Mercedes-Benz Financial Services.
"When I found there was an opening there I knew it was meant for me - the feeling was mutual. It was a perfect fit," says Ramabulana. "My first impressions confirmed that. All I'd been led to expect of the company was there. The leadership culture met - in fact, exceeded - my expectations. This is an organisation where performance and talent management are lived and practised. In a lot of companies it's in theory only but at Mercedes-Benz it's taken seriously. We spend a lot of time on people development - it's a huge focus."
Ramabulana was destined to make his mark in financial services. His major achievement, and the one he's most proud of, is the development of a unique product that facilitates buying vehicles by aspirant black-owned SME truck operators. It's not the owner-driver market: it's one level up from that, where an entrepreneur wants to establish a fleet of 10 trucks or more. They suffer all the challenges of a small business - the lack of business and financial skills, plus the additional challenge of finding the necessary money to invest in a capital-intensive business.
Ramabulana decided to do something about that. "We developed an emerging market financial product targeting black truck operators. I looked at the market and what I saw was a shift in favour of com-panies awarding transport contracts to black economic empowerment companies but a shortage of such companies because they lacked finance. This product offers not just asset-backed finance but also the fleet management aspect and operational support."
The R330m fund is a joint venture bet-ween Mercedes-Benz Financial Services, the National Empowerment Fund (NEF) and the Industrial Development Corporation (IDC). The product forms a complete solution: Mercedes-Benz Financial Services provides the finance and will finance any make of commercial vehicle, not just Mercedes; the IDC is involved in providing risk guarantees on the funding, providing a 50% guarantee on financial losses, thereby spreading the risk for Mercedes-Benz; and the NEF is involved on the funding side, offering working capital (typically around 10% of the capital amount) to primarily start-up truck operators.
Daimler Fleet Management is also actively involved with Mercedes, as the product is geared to support emerging contractors who should ideally outsource their fleet management and maintenance to focus on the core business. It makes sense, particularly for SMEs, to outsource fleet management in SA, especially if conditions get tougher, as many economists predict.
"The product's been highly successful, with R100m in capital loaned in its first four months. And well over half of the fund has by now been disbursed. It's something to be proud of: we've created a lot of new entrepreneurs through this product, as well as a lot of new jobs. What we achieved was to bring the private and public sectors together in a highly effective public-private partnership. It proves that when you bring both sectors together you can achieve something special. This is something meaningful in the market that I aim to replicate on the fleet management side," says Ramabulana.
His two years at Mercedes-Benz Financial Services formed a natural progression to the post of CEO of Daimler Fleet Management, plus it helped that both companies were closely aligned. Daimler Fleet Management is 65% owned by Mercedes-Benz Financial Services and 35% owned by Kagiso Financial Services.
"While it wasn't a planned succession I was prepared for the job and believe it was a natural selection. Even before my appointment there was a process of getting the two organisations to work more closely together and I was therefore familiar with all the issues. The three companies within the Mercedes-Benz group in SA have common forums on which I sat and we all have an understanding of the issues facing each of the operations."
For example, there's a common culture - one that's moulded Ramabulana's personal leadership style, where people are crossfunctional and free to interact.
"I believe that's the only way to get people to realise their full potential. We have common values across the group and that's the culture I aim to reinforce at Daimler Fleet Management."
The new leadership will therefore not involve any abrupt changes within the organ-isation. In fact, it's aimed at maintaining operational efficiency, quality of customer service and operational performance.
Ramabulana's specific focus will be to grow the business through the acquisition of new fleet management contracts, with the public sector as a specific target for that growth. "We're in acquisition mode, looking to acquire new contracts - especially from Government. There are huge growth opportunities there to create operating efficiencies in the public sector. Some 40% of economic activity is in the public sector and we can't afford to ignore it. There's a debate in the public sector about outsourcing work and they'll require some education on what we offer and the benefits of fleet management. On our side, we need to understand how Government functions. We'll have a very specific Government strategy," says Ramabulana.
The private sector business unit is also being revamped and will now involve broadening the group's revenue stream by more cross-selling of products and services throughout the business solos, primarily between Financial Services and Fleet Management - which was one of the strategic aims of the closer alignment being brought about.
"We previously operated in silos. Daimler Fleet Management is still relatively new and has been focused on establishing itself and maintaining its market position in a compet-itive sector. But we're now at a stable point of being more aggressively growth-orientated and extracting the obvious synergies from our relationship with Financial Services.
"The intention to do so was always there but circumstances mean it can now be done with greater emphasis. Over the past 12 months both Mercedes-Benz Financial Services and Daimler Fleet Management have come to market with many new, innovative products that have a natural synergy and that's positioned us to take the next step," he says.
While heading its growth strategy, Ramabulana's role will also be to provide the strategic leadership expected of a CEO. "I'll be providing the vision of growth to the leadership team while establishing an enabling environment." Part of his challenge will be to mould its leadership team, because it's largely a new one, as part of the company's growth strategy has required expanding its leadership capacity. A new transformation and supply chain manager, commercial director and human resources manager now supplement the team.
However, operational continuity is maintained through the highly experienced COO, while all the appointments are internal promotions. The guidance that Ramabulana will be offering his leadership team - and the rest of the staff - will be that success is about "commitment, hard work and dedication".
"Culturally, as black people we tend to be more passive. The message I'll be sending is that they need to stop holding back - be more assertive, speak out and, most of all, voice their ideas. Success sometimes demands taking a bit of a risk."
Taking the helm of an already successful organisation has both advantages and disadvantages. No dramatic actions are required, he says. During his first few months in office Ramabulana aims to get the growth strategy understood and everyone aligned with it. "I want everybody to get the focus on growth - from executives to each clerk. That requires a mind shift from just maintaining clients to increasing their business. It's the person on the ground dealing with clients daily who is the main cog in that. He's in a position to identify the little things that bring in new clients and the potential to sell them new products and services."
This expansion of capacity will stand the business in good stead. Fleet management is an extremely competitive industry, one that seems to become almost a victim of its own success. When a new contract is won an initial benefit to the client is that the size of his fleet can be reduced through improved maintenance. That has the effect of reducing the downtime of vehicles - more time on the road means fewer vehicles needed.
That means the industry grows at a rate slower than the rate of growth of the national fleet. "It's a self-defeating industry in a way," says Ramabulana. MERCEDEZ-BENZ FINANCIAL SER-VICES stands to benefit significantly from Government's commitment to small business development by providing affordable back-up and replacement facilities for small to medium-sized enterprises (SMEs) that can't finance their own fleets.
Emerging transport operators who need finance for assets and working capital stand to benefit from a finance package offered by Mercedes-Benz, the Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF), which collectively have committed R330m to the fund.
The product was developed after Mercedes-Benz Financial Services found there was a funding gap for emerging transport entrepreneurs.
Many operators had a lack of working capital, inadequate skills and knowledge of transport and logistics issues and were unable to raise asset finance.
Easier access to finance became a deciding factor when buying a vehicle. Although large companies attempt to close the gap with owner-driver schemes there remains a need to develop entrepreneurs in the sector.
Mercedes-Benz Financial Services piloted the product before approaching the IDC and NEF to participate.
During that phase it finalised owner-driver contracts worth more than R120m and concluded broad-based black economic empowerment contracts in excess of R50m to emerging SME operators - even before they commenced a sales drive with dealers.
Aluwani Ramabulana, Daimler Fleet Management's new CEO, was instrumental in that initiative. "While similar products have been developed by other financial institutions, we're offering an integrated solution for our clients." This means that a client:
* Buys the vehicle from one of the Mercedes-Benz brands, for example a Mercedes-Benz commercial vehicle, a Freightliner truck tractor or a Mitsub-ishi FUSO.
* The vehicle is financed and insured by Mercedes-Benz Financial Services.
* The IDC provides a 50% guarantee on potential losses.
* The NEF provides working capital valued at 10% of the finance transaction.
* Daimler Fleet Management offers services, such as tracking and/or fuel and maintenance management. DAIMLER FLEET MANAGEMENT (DFM) has recognised that in order to grow South Africa's economy programmes to develop small, medium and micro-sized enterprises (SMMEs) are critical. Project Imbhewu - which means "seeding" - is an initiative of its transformation and procurement department aimed at providing advice and assistance to DFM suppliers that will ensure their businesses are sustainable.
After consultative assistance from the Small Enterprise Development Agency and Telkom, plus extensive research on all possible approaches, DFM identified a core group of suppliers and one client that required basic training in business management, tax-ation, entrepreneurship and DFM's procurement policies and procedures. The businesses range from cleaning services, security and number plate manufacturing to driver services, car washing and sub-frame supply.
The next step is to compile a needs analysis for identified SMMEs to understand their specific requirements and establish how DFM - together with consulting company Management Development Consultants & Advisors, who provide the training - can assist.
SMMEs identified to become part of the project will remain on the programme for two years to hopefully evolve into healthy, sustainable businesses with realistic growth opportunities for future markets and thus create jobs with more individuals contributing to SA's economy.
