For almost 20 years, Dheeraj ‘Raj’ Chadha has overseen the financial activities of UK-based global connectivity solutions group, TeleAdapt. With the business having secured approved supplier status with some of the world’s best-known hotel brands, his approach is clearly paying off. Treasury Today learns the secret of his success.
Founded in 1992, UK-headquartered TeleAdapt has under its belt a quarter of a century of experience in designing, manufacturing and supplying connectivity products to the global hospitality industry. From the smallest boutique hotels to the largest multinational groups, the firm has delivered high-speed internet, power, docking and multi-media products to over four million hotel rooms worldwide. It has operations in the UK, USA, China, Hong Kong, Singapore, UAE and South Korea.
In almost two decades in the finance function of TeleAdapt, CFO Dheeraj ‘Raj’ Chadha has seen his role “change dramatically”. But then that is hardly surprising. Despite its global outlook, the business retains its compactness, which tends to expose Chadha to a lot of different and rapidly evolving areas within the business, way beyond the usual finance remit. Close involvement in manufacturing, operations and sales and marketing, for example, brings the kind of perspective, understanding and connection that finance professionals in much larger companies are only now actively seeking.
Indeed, the degree of diversity experienced by Chadha in his working life leads him to suggest his daily routine is “similar to running a business by yourself”. Not that it is routine. “It’s a good challenge,” he states, “every day is different so it can be like firefighting”.
With Brexit looming, there is no shortage of fuel. “When you do most of your buying and selling in US dollars but you are headquartered and consolidated in the UK, and your biggest expenses – director and executive salaries – are paid out of the UK, that referendum has painted a whole new picture for us in terms of currency management.”
It is as well that Chadha has the drive to keep ahead of the game. He arrived in the UK in 1994 via Malaysia, where he worked for the former Coopers Lybrand (now PwC). His initial goal was to complete his Association of Chartered Certified Accountants (ACCA) qualifications (he is now a Fellow Member) before embarking on an MSc in Finance.
He gained practical accountancy experience with a number of firms in different sectors before spotting an opening for UK financial controller at TeleAdapt in late 1999. He has since taken on the roles of Group Financial Controller and Group Financial Director, alighting on his current position of CFO in 2007.
Today, as a key player in a global concern, Chadha’s morning activities are principally around core cash management. This flurry of activity is always preceded by a wave of emails. With up to 300 a day, “it’s the bane of my life”, he says.
Many are relatively simple, merely seeking approvals for expenditure. There is an opportunity for the adoption of new technology here, admits Chadha. He envisions some kind of automation, exploiting the connectivity of his predominantly Microsoft-based global unified finance architecture. It is far from a done deal though.
“I could spend thousands developing a new system to avoid a few emails, or I could spend it developing a new product which will generate new revenues,” he muses. “When you are a small company, you have to make decisions like that – and the product is almost always more important and eventually we hope we can make enough from that to afford new systems.”
In the meantime, whilst he accepts everybody is distracted by emails and other electronic communications, he is on a mission to persuade people to ‘cut to the chase’, making their point clearly and quickly. It’s a simple request that would benefit most time-poor CFOs and treasurers.
Involvement in other everyday financial processes is kept to a minimum for Chadha. “I don’t even look at the accounts, except when I’m presenting to the board,” he says. To assist with day-to-day processes, he has a trusted team of nine, with some additional operational support, in locations throughout the world, one of its most noteworthy outposts today being China.
The nature of TeleAdapt’s business has seen most of its manufacturing shifted to Dongguan, an industrial city in China’s Pearl River Delta. Despite the significant sales opportunity that TeleAdapt China presents, the all-too-common issue of product copying needs an experienced hand to keep matters on track. Chadha spends a lot of time here.
Much of the copying is carried out not by competitors but by local customers and resellers of TeleAdapt’s products. “There is a level of trust when a contract is signed with a reseller in any country, that they possess a high level of integrity and won’t take your product and copy it,” says Chadha. “But sometimes that trust is abused.”
Counterfeit products use the cheapest components and lack any kind of certification so can be sold at a fraction of the price. This has been an issue for a long time and certainly since the early 2000s when China started opening up. Whilst more stringently applied legislation on copyright and patent has been introduced, taking on a lawyer and going through what will be a long drawn out process risks “exorbitant costs”. For this reason, Chadha resignedly says that “if someone wants to steal a little bit of your market share, let them”.
It is not possible to stop people copying products anywhere, and certainly not in China. But Chadha is naturally more upset by those who choose to abuse the relationship. “They will sell it to customers [hotels] to which we have done all the marketing, they will use our resources and contacts, taking away our bread and butter.”
Somewhat sanguine about the affair, he understands that the costs in legal fees and management time can usually be made up by new sales elsewhere. With China likely to become the biggest hospitality market in the world in the next decade, TeleAdapt directs its effort towards this more positive approach, keeping ahead of the crooks.
It’s not entirely a free play though, says Chadha. China is a difficult market to penetrate because away from the large international chains, its hospitality communications sector is driven largely by price and ‘who you know, not what you know’.
Indeed, the peculiarities and cultural mores of the Chinese market are something that must be learnt and cannot be easily side-stepped by foreign businesses. “Having worked in China for so long, I have come to the conclusion that you just go with the flow,” he says. “It has evolved a lot over the years and it still has a long way to go. But the money is there.”
Cash management in China comes with its own concerns too, not least around fraud, admits Chadha. “We have to be very wary of suppliers changing their bank details and telling us to pay somewhere else; it happens quite frequently.”
To try to mitigate the risk, TeleAdapt carries out a lot of research on everyone it deals with. Information is available through its contacts in the international banking system. Working mainly with HSBC and, to a lesser extent, Bank of China, these institutions actually expect a high level of due diligence and a co-operative approach from clients when seeking to legitimise transactions.
But as highly regulated institutions, they offer a high degree of transparency in a sometimes-cloudy market, Chadha saying he tries not to use the smaller domestic Chinese banks. He also steers clear of cash transactions wherever possible. This too is not always easy, as China is “a lot more cash-based than anywhere else we operate”.
With an operational base in Dubai, Chadha says the Middle East region can also be “tough”, especially when sending monies from abroad. In Saudi Arabia, for example, the legislative approach to fraud and corruption has been re-invigorated with the passing of a Royal Decree on 4th November 2017. “If you send a commercial payment in the Western world, the banks will generally not ask questions. In the Middle East, you now have to state the purpose of payment or it will just bounce.”
With the assessment that the region’s banking system is “a bit outdated”, Chadha explains that many banks have “a different view on time management”. The expectation that something will be done quickly will often lead to disappointment, he says. For a small company this can be a problem.
It would not be unreasonable to expect that a bank guarantee, for example, should be turned around in a few days by a Western bank. “In a UAE bank, it might take three weeks. If it is for a sizeable amount that delay could affect your cash flow position and the health of the business.” In trying to avoid the risk, some companies in the region still use post-dated cheques or partial deposits. TeleAdapt has learnt that it is best not to offer credit to any business outside of UAE. “It’s hard to turn away business but you have to protect yourself.”
As with China, the business opportunities in the Middle East are plentiful, says Chadha. But in a tough economic environment, where margins are squeezed, it is essential to go into every deal with your eyes wide open. “You might never recover your money. We have been bitten across the years; unless you want to spend a long time in the courts, throwing good money after bad, there is no point chasing it so we don’t let it get that far.”
The demanding nature of the CFO role requires dynamism and creativity. To be truly effective, it also requires the incumbent “to get out there as much as possible”, says Chadha. This means a lot of networking and membership of relevant associations. He regularly goes to seminars and conferences because by meeting and talking with new people, the possibility of learning new ideas and ways of working increases exponentially.
In fact, Chadha believes that everything you do, both personally and professionally, can have an impact on the way you approach your work. Creating an industry presence attracts invites to events, from which more experiences and learning may be gained. “It’s entirely possible to creatively integrate ideas from other sectors and industries into my work, helping me to think through problems and to evolve the business,” he says. “Getting out and about enhances your creativity; staying in the office will not give you the exposure and the opportunity to learn.”
Formal education has an important role to play for all financial professionals. “It gives you a reliable structure and a first foothold in your career that you can always come back to,” Chadha says. But he feels that education should never stop and is an advocate of Continuing Professional Development. This uses skills, knowledge and experience, gained both formally and informally, to help evolve a career path, even for those at the most senior levels.
“Getting out and about enhances your creativity; staying in the office will not give you the exposure and the opportunity to learn.”
Topics such as regulation and legislation, technology and treasury practice should be regularly updated anyway, but for senior finance executives keeping the team up to speed is also important. “I like them to keep an open mind, to go to events and to get out there too,” says Chadha. “It helps build confidence; if you are confident in what you say and do, people are more likely to buy into it.”
With a firm belief that people should have recognition for a job well done, he keeps the TeleAdapt finance team in regular contact, with a call at least once a week. “And I make sure I listen to what they say and not just bark at them,” he reports.
As a global business there are many language and cultural hurdles to overcome. Although he speaks English, Cantonese, Mandarin, Hindi and Malay, he feels that well-developed ‘soft skills’ are essential to keep staff motivated and happy. “As CFO, I rely heavily on them. I want them to feel responsible and be part of the business because if it grows and does well, we all grow and do well!” But he is adamant that the ability to read people and make good judgements does not come from sitting behind a desk: “it comes from travelling and meeting people”.
Having been nominated for the UK FD of the Year 2016, Growing Business Category, Chadha feels that formal awards such as this – and Treasury Today’s own Adam Smith Awards – offer the kind of industry recognition that further builds confidence and adds to overall satisfaction.
With almost 20 years in the same company, some people may stagnate. But Chadha still has a thirst for knowledge and driving ambition, feeling that he is in the perfect training ground to one day run the entire business.
For those just starting out, the advice from one who knows is to always be honest and retain your integrity. “Actions will always speak louder than words so if you promise something, you do it.” Feeling that so-called millennials are often too absorbed with technology, he argues that it will be “your presence and personality” that will win through in the end.
Beyond the world of work, Chadha is a serious tennis fan, a movie buff (with an aversion to the horror genre) and, as a hospitality professional with regular trips to Vegas and Macau, likes the occasional visit to the tables. But he is first and foremost the bon viveur. He enjoys good food, fine wine and meeting people from all walks of life.
For the past 20 years he has been a principal player in a business that helps people keep in touch when they are far from home. With Chadha’s obvious vision and energy to keep things moving forward, there is clearly room for another 20 years at the helm.