Getting fired at least once in your career either makes or breaks you. For Jannie Mouton it turned out to be Life
Jannie Mouton, listed in Forbes as one of Africa’s 40 richest men, is a Warren Buffett man. However, the single book he says that has changed his life was Think and Grow Rich by Napolean Hill − particularly Hill’s philosophy that ‘Whatever the human mind can believe and conceive, it can achieve.’ The book turned out to be a why and how of the way Mouton clawed his way out of a midlife career abyss and re-invented himself. During his enforced ‘sabbatical’, he read every single one of Buffet’s books (as well as over 100 other business books) earning him the sobriquet of South Africa’s ‘Boere Buffett’. But there are limitations in the word alone. Buffet once said that, ‘If past history was all there was to the game, the richest people would be librarians’. Mouton read, then saw and conquered.
Mouton started the investment holding company, PSG, 16 years ago and the company’s exponential growth under his aggressive acquisition and identification programme increased the share price from 36c at formation to R69 in 2012. PSG now delivers profits of R4,3 billion and employs 38 000 people.
Things were different in1995 when Mouton, the maverick tycoon, was firing on all cylinders as MD of Senekal, Mouton and Kitshoff (SMK), the country’s then leading stockbroking firm, which he started in 1982.
Then he was fired. Unceremoniously. By colleagues and friends on his board.
Crippled by shock he said, ‘I took leave of my senses. I was drowning in confusion, so tortured by raw emotion that it took me a long time to even ask why.’ He says that first uncertainty hung around him like an unwelcome imaginary friend, then came its sidekicks − self-doubt and disappointment − both equally undermining and exhausting. ‘A dream had been shattered. Apart from his wife, Mouton told no-one.
So what do you do when you have lost your high flying position, friends, identity and colleagues? The high flier who admits he was perhaps ‘too big for his boots’ before this, says ‘you have a meltdown…’
He remembers being so ‘on the up’ before being fired that he phoned Kango Beach Buggies and enquired about colours in stock; then ordered one of each colour. He says to be ‘so self-confident and gearing to the point of bursting was asking for trouble’.
So why does he think he was canned? ‘I was perhaps too single-minded and too driven. I was born like that,’ says Mouton.
As a schoolboy living in Carnarvon, his sense of duty was developed from an early age while working in his father’s shop. ‘Initially I thought it unfair, having to work while everyone else was on school holidays, gallivanting on their wide-rimmed bicycles. But I worked my way up from the storeroom to the men’s department of the general dealer, then the groceries section and, finally, bookkeeping. Even in a holiday job, I aimed for the top. At school, at sport, at varsity I always wanted to be a leader and never failed. It is in my DNA…’
Success might be in Mouton’s genome but on 3 August 1995, as he packed up his desk at SMK, things were not looking good. So, Mouton started to think… Encouraged by Buffet’s pithy: ‘Most men would rather die than think. Many do,’ he sat and thought and read and thought and read. ‘I had to analyse myself. Your life is in your hands… no-one else can do it for. In retrospect it is the best thing that could have happened to me but, believe me, at the time I was gutted. It is a defining moment in your life when you think you are popular, successful and on an exponential curve of triumph one day; the next unemployed with nothing to do. So for eight hours a day I read and thought about inspiring people… I believe the more you read, the more streetwise you are; the more gut feel you develop. It gives you an edge. And of course it gave me something to do. I summarised Buffet’s books in Afrikaans and did my own painful and enlightening SWOT analysis. One of the inspirational quotes I remember during my darkest moments was another one of Hill’s: ‘No man is ever whipped until he quits in his own mind.’
Apart from motivational and business books, Mouton also read oriental military strategist Sun Tzu’s Art of War from where he says he drew his philosophy when starting PSG. Does he equate successful business to fighting and winning a war? ‘No, that is too simplistic. It is the strategy of war that fascinated me and how to harness this in a business venture. Without a strategic plan, enthusiasm is useless. It must have logic, a step-by-step plan, a to-do list. You need a business and personal action plan. Just as in war, to go in prepared you need to understand your own capabilities and limitations, your opponent and the circumstance in which they fight. After thoroughly contemplating this you then integrate it into a strategy that is applied in a disciplined way by a leader that inspires those under him. I love Sun Tzu’s wisdom. If you have your strategy in place, you hit fast and hard; then you win…’
In 1995 he gained control of Professional Alignment Group (PAG) – a personnel agency; an unusual buy but a company Mouton says had a good leadership and was making a profit. From there he started Professional Securities Group (PSG) in which PAG had a 50% stake. Mouton sold PAG two years later for a profit of R100 million. Since then PSG has grown – Jack’s beanstalk in the world of acquisitions – new ventures, purchasing stakes in existing companies or buying out entire companies. ‘We seldom start up. At PSG we have a saying that you should invest in a company already “making tea”,’ says Mouton. ‘Setting up a stockbroking firm with premises, telephones, offices, staff and licences is enormously complicated. We would rather buy even the smallest firm with all of this in place.
‘We are an investment company, not a financial services company. We acquire strategic stakes in established businesses with strong management, good corporate governance, a history of earnings, growth and positive cash flows and create innovative ideas at existing businesses. We invest in businesses with potential and start other businesses like manufacturers, retailers or service companies.’
The investments are always backed by a strategy. In May 1998 Mouton developed a Charter for Extraordinary Achievement for PSG. (He says his wife Dana chastised him for using the word ‘extraordinary’ because ‘you can’t pronounce it properly’). Nevertheless, the Charter is still something he sticks to today. And it’s simple: Have a vision or dream, goals and a strategy team, participate, be positive, have faith, be a stickler to corporate governance and communicate! He adds two further essentials: Assertiveness and decisiveness. Judging by the mock epitaph presented by friend and colleague, Chris Otto, at Mouton’s 60th birthday these attributes are pivotal to his success. It read: ‘Here lies an unreasonable man. He has great ability to think and work out strategies. He always has a plan, and then he can’t imagine that something can’t happen. He challenges us and eventually everyone starts thinking like that…’
‘One of my abilities,’ says Mouton ‘is to think or know what to think. One of my limitations remains not working gently with the people helping me apply them. I struggle with that even now.
‘My chances of getting a gold for diplomacy are slim, but I have mellowed with age… considerably.’
The PSG story is not all fairy-tale happiness and triumph. ‘We have had many setbacks and made spectacular mistakes in the first 16 years.’ Mouton cites the disastrous M-cubed acquisition where he blames himself for not learning enough about the company and who ran it. Mouton calls it the halo effect. ‘You think someone is a saint on the basis of a single trait. M-cubed was a failure we won’t and can’t hide.’ Then there was the ‘thorny problem of the Pioneer Foods scrap’ where Mouton had to sort out alleged price fixing within the company with the Competition Commission, and other ventures where perhaps due diligence was not exercised. Conflict and drama make for good reading… but everyone likes a happy ending to the tale, even if it’s not exactly the end of the book. PSG has a market capitalisation of R61 billion, and Mouton is particularly proud of one project – that is the development of Capitec Bank. It wasn’t always the hero of the piece though. It was started as a micro-lending business, which was frowned upon by many.
Although Capitec, of which PSG is a 37% shareholder, is now a thriving bank, giving access to capital for people who would not normally have it, its roots were seen by many as grubby. When Mouton started the micro-lending business, he was chastised for being a loan shark and exploiting the poor. PSG Smartfin Financial Services, as it was known, was immediately put in the same stable as the many unscrupulous and ruthless lenders in the industry. The process of collecting debt read like a third-rate thriller with an armed PSG employee at an autobank in the dead of night with a police escort. A simple process of taking bank cards, deducting the debts and returning the card to the debtor in the morning might have meant a 97% collection rate, but it took its toll on everyone. ‘Not quite how I pictured it when I read Nobel laureate Mohammad Yunus’s Banking on the Poor,’ says Mouton. ‘My aim was to relieve poverty to a certain degree by making capital available to people without collateral. People who are not helped by traditional banks.’ Capitec was recently distinguished by 3 000 analysts of the Swiss-based financial services group Credit Suisse along with Amazon, Apple and Mercedes Benz as one of the 27 outstanding brand names of tomorrow.
‘Choosing competent people and putting them in key positions, then trusting their judgement implicitly, is the way to ultimate empowerment,’ says Mouton.
He believes an owner-managed company with a passion for excellence, winning and a confidence that allows achievement at work should be balanced by having fun and enjoying life. A combination of purpose and freedom, he says. Such is Mouton’s passion for PSG that he confesses to never having sold a share in the company and, in fact, to borrowing money to buy more…
Borrow? ‘Yes,’ says Mouton, ‘if I’m not in debt I can’t sleep. Some of my colleagues are horrified at the fact that sometimes I don’t only put all my eggs in one basket and carry it myself, but overpack it by borrowing eggs as well!’
Why does he do it? ‘It’s the edge, the uncertainty, the adrenaline rush. But I never borrow more than the value of 10% of my assets.’
Mouton’s assets are purported to be over R300 million – do the maths. ‘It’s reckless if it’s too big…’ he adds.
Mouton’s enthusiasm for business and companies embraces the future of South Africa as well. Just like Richard Branson and Mark Shuttleworth he believes, ‘It’s a country full of opportunities. It would have been impossible to start Capitec Bank anywhere else.’
What about the risk? ‘There are people who say that South Africa is going the same way as Zimbabwe. I think there is less than a 5% chance of that. No-one can quote or measure, but if that happened or for some reason the Curro Schools – private schools we have started for disadvantaged children – were nationalised, I would emigrate. Then there would be no future here. There are opportunities in South Africa and Africa, you just have to see them and take them…’
Where to now? Considering he doesn’t do ‘stamp collecting’ or ‘pigeon racing’, there is little chance of his retiring completely and he will continue to drive the company together with his sons Piet and Jan to grow PSG even more. Mouton reads voraciously and so he is sure to have come across the last stanza from the poem Invictus.
‘Matters not how strait the gate,
How charged with punishments the scroll.
I am the master of my fate:
I am the captain of my soul.’
Mouton’s recommended reading includes:
- Napolean Hill – Think and Grow Rich
- Warren Buffett – The Snowball and 101 Reasons to Own the World’s Greatest Investment
- About Buffett:
- The Warren Buffet Way – RG Hagsrom
- How Buffett Does It – James Pardoe
- The Warren Buffet CEO – Robert P Miles
- Benjamin Graham – The Intelligent Investor
- Sun Tzu’s – Art of War for Traders and Investors
- Mohammad Yunus – Banker to the Poor
- Dr Brian Jude – Thirteen Attributes of Success
- John Kehoe – Mind Power
- Stephen Covey – The Seven Habits of Highly Effective People
- Phil Stone – The Ultimate Business Plan
- Mohnish Pabrai – The Dhandlo Investor
- John M Huntsman – Winners never Cheat (Mouton says it’s a must-read, especially for all corrupt political leaders)
- Ayn Rand – Atlas Shrugged