My career

My student career

I made my first two career switches before I graduated – not through changing my degree studied but through my choice of vacation work and post-graduate study.  Most of my chemical engineering classmates at UCT chose to spend vacations working on a mine, a refinery or some other industrial plant.  I chose a bank: Trust Bank in those days.  

At the end of my 1st year (1980) I attended a two-week training course at the headquarters of Trust Bank in Johannesburg to work as a teller.  For this effort I was paid R200 in cash!  Then I was posted to the main Trust Bank branch in Pretoria where I was paid R20 a day plus R20 for a Saturday morning: R120 a week!  To put this in perspective, the total amount I received from my AECI bursary for pocket money and books in that year was R800.  Apart from the money, the work at the bank offered many advantages.  Firstly, you did something useful, as in those days the teller was the coalface of the (retail) bank.  No sitting around in an office and try to look busy as most of my classmates ended up.  Secondly, I had flexibility as to when I could work.  The bank would typically be happy for me to work a week or two during short breaks and at short notice – there were always tellers that wanted to go on leave.  Thirdly, there were the girls!  The bank was teeming with them whereas in engineering school they were fairly rare….

Thus over a three year period I learnt quite a lot about banking, money (how dirty it is!) and some financial systems.  I was promoted twice (even as a casual worker) and at the end of my 3rd year I worked a few weeks as the chief teller in the bank when the incumbent official was arrested for fraud!

It was also around the end of my 3rd year that I decided that I wanted to study further towards an M.Sc. Engineering degree once I graduated.  This was the second change because I took a firm decision that I wanted to become a Control engineer although I would graduate as a Chemical engineer.  

In 1983 when I graduated, control systems were the exclusive domain of Electrical engineers.  Even on chemical and processing plants the control systems would be designed by Electrical engineers specialising as Instrument engineers.  However, with the emergence of the microprocessor and the development of computerised control equipment the control systems became more and more complex.  Designing such complex systems required greater understanding of the underlying system being controlled thus opening the door for a Chemical engineer to specialise as a Control engineer.  As a schoolboy, I was an avid electronics hobbyist.  At 16 years of age I passed the Post Office exam to obtain my radio amateur license, built my first tv game at 17 and when I matriculated I was fully conversant in programming in both the Fortran and Basic computer languages.  Thus for me the marriage of chemical engineering with computers and electronics was a great fit. 

In 1984, I enrolled for a Graduate Diploma in Engineering (GDE) in the Electrical Engineering faculty at WITS University.  For my GDE I completed a number of the 4th year electrical engineering courses offered in control theory to supplement my under-graduate exposure to control theory and completed a number of graduate subjects dealing with advanced control theory, industrial computer system design and computer communication theory and systems.  I also worked on a research project, which together with the GDE would qualify me for a masters degree.  For my research project I chose to build and test a dynamic simulation model of a chemical reactor.  Such a dynamic simulation model would form the basis of a more complex control system design and it would be the ability to build such models that would in future distinguish the chemical engineer as a control specialist over his electrical engineering colleagues.

My first real job: AECI

Early in 1985, armed with my post-graduate qualification, I joined AECI, my main sponsor for my full university career.  I was highly excited about the opportunities that this chemical giant offered for my unique blend of qualifications and of course the value I could add.  I was disillusioned pretty quickly!  As an “old and conservative” company set in its ways and procedures, they didn’t really know what to do with me.  I found myself floating around for two years trying to find a foothold – somewhat as my classmates experienced with their vacation work.  I was impatient and wanted to run – the world of computers and control systems was changing rapidly – but it was as if I was held back all the time.

Not that it was all negative.  I did spend roughly a year working as a technical officer on the No. 4 Ammonia plant.  This required me to solve day-to-day problems experienced on the plant and ironically most of these related to instrumentation and control.  I continued to write dynamic simulation computer models to enhance understanding of some of the processes on the plant.  These simulations I would link to the data logging and display computer system of the plant so that their data could be displayed as if they were real systems.  This also allowed a plant operator to interact (and control) the simulated systems – somewhat akin to the flight simulators that started to become available on the emerging personal computers.

My simulation activities got me seconded (in 1986) onto a project team for a new plant extension to the No. 4 Ammonia plant aimed at recovering hydrogen gas and increasing the overall efficiency of the plant.  My instructions were to build a simulation that could be used to train operators on the plant and its supervisory control system prior to commissioning.  For this purpose it had to be “realistic but not accurate” – I never informed them that in the world of simulations realistic and accurate is the same thing.

The training process using my simulation was highly successful.  Shortly after the plant was commissioned there was a catastrophic failure in one area of the plant and it was shut down.  The focus now shifted towards identifying the conditions leading to the failure and suddenly all the attention shifted to my dynamic simulation, which could do just that - gone was the notion of “realistic but not accurate”.

In spite of this paradigm shift, I had already decided that AECI was not the environment wherein I would make my mark as a control engineer.  My mind was made-up that I would move into my own business.

What lessons did I learn at AECI?  Frankly, I was too young and knew too little of corporate life to take any lessons from my short (two year) stay.  The experience would however assist me to put future experiences into context.  

Life in Nextep Systems Integrators

One of my biggest problems with writing dynamic simulation software in AECI was the “old technology” used.  In AECI everything was written in RTL/2 and ran on PDP11/73 machines – great but not nearly fast enough for the intense number crunching required by the simulations.  The solution was easy:  the IMB PC XT had been with use for a number of years already and there were a few C-compilers available on it.  Sure, it wasn’t as fast as the PDP 11/73 but it had a socket for an 8087 numerical co-processor, which made it ideal for number crunching.  My typical simulation ran 10x faster on the IBM XT than on the PDP 11.  Even better, in 1986 the PC AT was launched which was again significantly faster than the XT.

But in a giant like AECI things change slowly and that also went for embracing new technology.

At Nextep Systems Integrators everything would be programmed on the PC and in the C-language.  Thus in March ’87 I started off writing a dynamic simulation program for the PC.  One of my own key requirements for this program was that it should be easily configurable by the user.  Thus through a normal user-interface, the user had to be able to input all the relevant details of the processing plant to be simulated.  This was a mammoth task – remember we were running under PC-Dos and it was more than a decade before the emergence of the Windows operating system that made developing such user interfaces much easier.

To fund all this development work we developed custom 3rd party software – mainly communication drivers and we developed industrial control systems based on programmable logic controllers (PLC’s).  

The latter activity took me around the country to a host of plants ranging from paint factories, breweries, water treatment works, mines, concentrating plants and smelters.

At Nextep Systems Integrators I learnt a number of key lessons that would stay with me for life.  I learnt that there is no boss or employer in the world that can be as demanding on your time, efforts and dedication, as you yourself.  I learnt how difficult it is to “sell” new technology to a market, especially if it promises to revolutionise the way we do things – being set in its ways was not a trait unique to AECI.  I learnt that a business is so much more than simply offering a product or service to the market.  

Any romantic notions and delusions of grandeur I had about running my own business were quickly dispelled.  It was a hard and never-ending slog!  Weekends did not exist…

Nowadays, I look at the many young .com entrepreneurs that regularly burst onto the scene and take the world by storm and cannot but be amazed at how the world has changed since the 80’s when such young whippersnappers were viewed with suspicion more often than not.

By the end of 1991, Nextep Systems Integrators had sold a number of copies of my dynamic process simulation system.  Of these sales, three were foreign sales, including to the University of Mcmaster in Canada – this at the height of the sanctions years.  But, having achieved what many people and colleagues in 1985 deemed impossible, I had set my sights on a new horizon and a new challenge: the world of finance.  The road that would lead me there travelled through the Industrial Development Corporation of SA.

My IDC years

In February 1992, I joined the IDC and re-entered the corporate world.  But this was a world very different from what I’ve experienced at AECI.  Immediately, I was on a steep learning curve having to familiarise myself with and learn new concepts and techniques: business analysis, financial modelling, legal analysis, risk analysis, financial structuring etc. This was the kind of challenge I relished and I thrived in an environment of continuous improvement and continuous change.  Every week brought a new business or a new industry to study and to analyse.

The IDC was an environment where one’s negotiation – and presentation skills were constantly tested and applied.  One week you would represent the IDC at a company that applied for a loan and would be negotiating with the management of the company.  The next week you would present your “proposition” to IDC management and represent the company in negotiating with IDC management.  It was also an environment where your own progression and development was very visible.  My first proposition was a small start-up applying for a loan of R300 000.  Within two years I was managing deals of R20 million to R50 million for large companies and not only had to negotiate with the management of these companies but also their legal and financial advisors.  It was a learning school second to none!

When I look back, my five years at the IDC passed in a flash and are still the most enjoyable five years of my entire career.  Deep inside the development mandate of the IDC strongly resonated with me, but I also embraced the charge that such development must always be conducted on a commercially sound and sustainable basis.

Some of my colleagues at the IDC are still my closest friends and on a certain level I guess that is indicative of how positively I experienced the environment and its people.

Like so many before me and after me I left the IDC to enter the world of banking – merchant banking to be more precise.  In July 1997, I joined the Special Projects team at Rand Merchant Bank.   

Traditional values. Innovative ideas 

If the steep learning curve at the IDC challenged and excited me then it had nothing on the learning curve I entered at RMB.  If I associated with the development mandate of the IDC then at RMB it was the constant quest for innovation that resonated with me.  Once again I relished the challenge and I thrived in an environment that required constant change, adaptation and innovation.  I learnt about tax and structuring, I learnt about exotic financial instruments, I learnt about syndications and above all I learnt about the workings of a nasty thing called the Credit Committee!

My first two years at RMB can only be described as a rollercoaster ride fluctuating between hard work and the exhilaration of winning and concluding a deal.  If there were any negatives it was the singular focus in the pursuance of profit – nothing else much mattered, especially not any developmental ideals.  But for the time being this was masked by the necessity of innovation and creativity to remain competitive in an extreme environment.

In 1998, I met an individual that would have a major impact on my career for the next twenty years: Francois Swart, the CEO of Bigen Africa.  A civil engineer by training but the definitive entrepreneur by nature, Francois almost singlehandedly built Bigen Africa into one of the largest civil consulting engineering firms in the country in little more than fifteen years.  What differentiated Bigen Africa from other engineering firms was that it focussed very strongly on the municipal market rather than the private sector and specifically the mining sector.  But in the late 90’s the finances of municipalities literally dried up and thus very few new projects were embarked upon.  This impacted negatively on the construction industry as well as engineering firms such as Bigen Africa.

In typical entrepreneurial spirit and true to his own innovative nature, Francois set about to turn this crisis into a major opportunity.  His solution: to bring the financing with the projects to his (municipal) clients.  Francois believed that through project finance he could overcome the lack of finances within the municipal sector but to achieve that he needed a bank that was innovative, creative and hungry.  That bank was RMB.

Thus, Francois and I together started exploring opportunities for project finance in the municipal sector and thus started a unique partnership that would endure for fifteen years.

Shortly after Francois and I met for the first time there was an incident that I must recount.  Francois visited me at the bank and while waiting for me in the reception area noticed a large blue book lying on a coffee table.  The book was inscribed in golden letters:  “The RMB Book of Rules”.  Francois, grabbed the book and started paging through it, but to his amazement all the pages were blank.  When he walked into the meeting room the first thing he told me was if there was any doubt in his mind that RMB was the bank he should partner with, that book had dispelled it!

At the end of 1998 another landmark incident was the takeover (merger as it was dressed up in public) of FNB by RMB.  This was a euphoric time at the bank and everyone looked forward to a period of competing in the market as a “big bank”.  But as the takeover got implemented and RMB was swamped by personnel from the merchant-banking arm of FNB, it slowly dawned that things were changing in ways no one could ever imagine. 

Within a short period of time the words “big bank” became synonymous with more control, more committees to oversee deals, more bureaucracy and (sadly) less and less innovation.  The RMB culture as I got to know it was slowly being dismantled and by the turn of the century, that RMB Book of Rules that made such an impression on Francois was filled up completely – you wouldn’t find an empty square inch in it!

Most of my colleagues of the time believed that the FNB merger was an unqualified success and that the cultural price paid was worth it, given the luxury of being able to compete heads-on in the market for the mega deals.  For me, what remained was that unchecked pursuance of profit with nothing to balance it.  For the first time in nearly 10 years (since joining the IDC) I was frustrated in my job and lacked any sense of belonging.  When I came under pressure in the bank for the partnership with Bigen Africa which “did not fit in with banking business” and the slow progression of the deals we were pursuing in the municipal market, it was time to move on and there was only one destination I was interested in: Bigen Africa.

Back to my roots

My grandfather studied civil engineering at UCT and was the (first) town engineer of Worcester.  My farther also studied civil engineering at UCT and spent his career in the Department of Water Affairs – he retired as the director general in the eighties.  So, in my family it was quite a novelty when I decided to study chemical engineering at UCT.  But, in 2002, one can say I returned to my roots when I joined Bigen Africa.

The transformation from banker to consultant was not an easy one.  After more than ten years in the financing environment dealing with CEO’s and CFO’s, I believed that one of my best-developed skills was my negotiation skills.  I quickly learnt that negotiating with a chequebook in your pocket is no special art – take the chequebook away and see how it goes then!  As a banker I was always treated courteously and with respect – no wonder most of us walked with a bit of a swagger in those days.  As a consultant, I suddenly found myself at the bottom of the food chain having to kow-tow to the lowest of municipal officials with barely any qualifications but who of course “was always right”.  I also quickly learnt that it was easy to do a slick presentation around some financing structure to a CFO who happens to be a hotshot CA.  But try and explain a simple project finance transaction to a municipal official who doesn’t understand the difference between a loan and a grant?

For the twelve years that I stayed at Bigen Africa one of the most refreshing aspects of the business was the fact that civil engineering is by nature developmental.  Unlike the IDC where this mandate is explicit, in the civil engineering business it is implicit.  Moreover, in the civil engineering business any project will typically impact on the lives of thousands of people.  But, Bigen Africa was serious business and highly successful and it was driven by a leader that understands business like few people do.  Under Francois Swart, Bigen Africa was also widely recognised for its business innovations and creativity.  So for me, the business and its environment ticked three very important boxes.

At Bigen Africa, I learned how government works – government in all three its forms: local, provincial and national.  In infrastructure a lot of the action happens at local level – especially in fields such as water supply, sanitation, electricity supply and of course housing.  It is at local government level that we experienced the most changes since 1994.  I lived through the Local Government Transition Act.  I experienced the introduction of the Municipal Systems Act (as well as it later amendments), the Municipal Finance Management Act (“MFMA”), the Preferential Procurement Policy Framework Act and also the Supply Chain Management Regulations published in terms of the MFMA, to name but a few.  All this legislation had a dramatic impact on how one does business with local government.  I am often amazed about how little ‘business” in this country understands about the local sphere of government – how few people understand that in terms of our constitution, the three spheres of government are equal and not hierarchical – and the implications of that for each one of us.

It is hard to describe my role at Bigen Africa.  Whenever someone asked me what I do; my stock answer became: “I am a chemical engineer working as a banker in a civil engineering consulting business”.  That would more often than not end the conversation….But on a more serious note, I think the best description of my role is that I was a translator.  I had to translate between engineers, bankers, legal practitioners, project managers, consultants, community representatives and of course municipal and government officials.  

If one thinks about the business of putting together large infrastructure projects and financing those projects then this translation role is absolutely critical for success.  It is what I still do in my own business today….. © Tian Claassens 2015