Treasury Today Country Profiles in association with Citi

There are many ‘I’s in team

Team of rowers sailing on river

Team-playing is not for everyone but then if the nature of human expectation and motivation is really considered in depth, very few have the required skills to make it work en masse. For the rest of us, how can teamwork be improved, what happens when it goes wrong and how can we improve matters?

The worn out old cliché that ‘there is no I in team’ ought to be retired disgracefully. Of course there are: in fact, ‘team’ is entirely made up of ‘I’s – that is why building a well-functioning team is challenging. The key to building a strong team is to recognise that different people will take a different approach to a role, even within the same function. This seems obvious, but recognising that getting the best out of people is not about trying to force a square peg into a round hole, instead it is about seeing that real progress and creativity is driven by managing different outlooks, cultures and opinions and then steering these outlooks in the same direction.

Getting it right

Exemplifying this view is the digital development sector where companies can crash spectacularly but they can also succeed beyond most people’s wildest dreams: Apple, Google, Amazon and Microsoft are amongst the world’s mega-companies for good reason. They achieved great things by purposefully encouraging and exploiting teamwork and peoples’ differences to move far beyond the norm.

The principles that these firms – and many more like them – adopt are built upon a single, non-negotiable truth and Rikke Koblauch, a designer in the London studio of digital development firm, Ustwo, sums it all up when she says “good teams start with good people who trust each other to work toward a common purpose”. The company, which amongst other things develops digital interfaces for high profile clients such as Jaguar cars, does not pay lip service to the development of team culture. It is, states Koblauch, “much more than a football table and a Friday beer”. For her, and many others in this sector, “culture is a safe environment in which everyone can be themselves, ask questions, make mistakes and grow”.

It might be argued that the worlds of the bright young things in digital development and the cautious old-school professionals of treasury are so far removed that this notion falls flat on its face. But read the stories of the winners over the years of the Treasury Today Adam Smith Awards and it is clear that they didn’t get where they are today by standing still – these are all fully engaged, creative and responsive teams who, without exception, cite the imagination and commitment, skills, talent, experience and cultural outlooks of their co-workers as being vital to their success.

“I’ve learnt throughout my career that if you get the right people with you, you can do almost anything. Get the wrong people and you can do nothing.” The message from Gary Slawther, Financing Advisor to the CEO at Octal in Oman, could not be any clearer: it does not matter ultimately what the role of that team is, the need to properly consider the suitability of each individual member, as per Koblauch’s assertion above, is indeed non-negotiable.

But team building is not an exact science and there is no magic formula that works every time. “The problem is that nobody teaches you how to identify what you need in human resources, how to manage staff that aren’t performing – and how to manage those that are – and how to build good relationships with the banks,” says Slawther. It is, he determines, “something that only comes with experience”.

Soft skills

Of course, the core competencies of a treasurer are a given, but for those working in this space who are anticipating promotion, they also need to have a wide variety of business experience and expertise in the so-called ‘soft skills’. These include the ability to build relationships and to manage people and expectations. Building a team therefore means thinking carefully about what personal qualities each role needs to best fulfil it. Whilst it may be desirable to seek individuals who will question processes, display common sense and be able to “ruthlessly prioritise what needs to be done”, Slawther feels that companies which overlook the value of soft skills do so at great cost.

But it is not just an individual manager’s responsibility to create the right environment. Vivian Peng, Asia Treasurer and VP of Treasury, Flex Group, (and winner of the Adam Smith Awards Top Treasury Team Asia 2015) points to a further essential element of success. “We have strong support from our management and our culture allows the team to innovate in a complex environment,” she reports. That same culture fosters “a great team spirit”, informing her belief “their hard work, their ability to work as a team and also their willingness to learn” is the very key to success.

The point that Peng makes about being able to innovate in a complex environment is one that is taken up wholeheartedly by Christine McCarthy, Senior EVP and CFO, The Walt Disney Company. When it comes to working with her staff, McCarthy steers clear of micro-management. “I learnt a long time ago from one of my mentors in banking that when you find someone who has potential, you give them enough rope to hang themselves but hopefully they won’t.”

As part of her remit to develop talent, McCarthy believes it is essential to keep high-potential people motivated. To do that you have got to give them the ability to make decisions and earn acknowledgment for the work they do. “I want them to be out in front getting the recognition they deserve; the downside risk is that they must perform and succeed. It can be a high-risk strategy on my part so I can’t give everyone the same amount of rope; I have to discern who is ready for those challenges.”

She may be taking some “highly calculated” risks but her nurturing process is well managed as part of her belief in team spirit. “I don’t just put them out to pasture, I keep my eye on them,” she says. “The more they can do and the more they can achieve, the more they will grow as professionals.”

Keep talking

When it comes to developing skills and knowledge, it is important to keep in touch with the wider treasury peer group. Ingmar Bergmann, Corporate Treasurer and Head of Corporate Finance for Dutch real-estate firm, NSI, is a firm believer that the international community of treasurers can help each other to do a better job. “If you want to take treasury to a higher level then you definitely have to communicate and open up to others.”

Certain aspects of the role are naturally bound by the rules of competition; he is not advocating passing on ‘trade secrets’. But he argues that some facets of the job – such as the administration of a common project such as the recent SEPA demands – are not necessarily best served in the realm of secrecy. Here, treasurers can help each other by openly discussing project implementations, the pitfalls and the best expert contacts.

Uniting under a common cause creates a stronger voice too and for Bergmann “it’s time to make sure within the inner circle of treasurers that we maintain the clarity of our voice so that people keep listening”. The cornerstones of promoting the values (and value) of the treasury function are the Associations of Corporate Treasurers that exist in many countries. As a former chairman of the Dutch ACT and a member of the pan-European EACT, he notes that it is only a relatively recent experience for the voice of treasury to be heard with any real attentiveness in the discussions around setting international regulations. “Corporates, together with the EACT, have been able to raise their voices and show these bodies, especially the European Union, that they should listen to the ‘voice of the real economy’,” he states. “As treasurers we should be willing to help work towards well-balanced regulation.” For him, mutual support is an essential part of teamwork.

Why teams fail

The most effective teams combine significant diversity – of personality, background, outlook and skills – but with a shared set of values. This is important, notes Mark Loftus, a Chartered Clinical Psychologist, an Associate Fellow of the British Psychological Society and Managing Director of The Thinking Partnership. Just as shared values without diversity leads to stultifying group-think, so diversity without common values will lead to fragmentation.

Indeed, notes Loftus, teams often fail because they do not have a clear enough sense of the common purpose that defines their very existence. At a senior level, the reluctance or inability of people to ask each other questions is a major cause of frustration. Where an individual possesses a depth of technical expertise there is often an imbalance between the twin concepts of advocacy and enquiry (propounding your own views versus enquiring into someone else’s). “The evidence seems to be that a 50/50 balance is indicative of good team functioning, whereas most frequently we would see a 90/10 split in favour of advocacy,” he notes. This disparity tends to generate “furious agreement” amongst experts, instead of intelligent questioning of what is really meant by the other proponents.

A major key to progress as a team is thus the free-flow of conversation. However, common amongst teams of senior executives, Loftus observes a ‘hub and spoke’ model in action where “a kind of uneasy truce” exists between participants. Each will accept direction from their own boss but can be reluctant to accept influence from each other across the team. The reason why some executives choose to isolate themselves in this way may simply be down to the performance management structure imposed upon them, where accountabilities are made very specific and personal. This builds incentives around those accountabilities, tending to drive individualistic behaviour. But, notes Loftus, the typical psychology of individuals who rise to senior positions must also be taken into account. “Often they have got there because they are strong solo operators; they are very competent and are not used to relying on someone else,” he explains. Motivated by taking on major challenges, these are the people who always step up to the plate but then find it difficult to let the reins slip too far from their control.

Firmly believing that “teams become teams by working together on a common purpose”, Loftus comments that it is nonetheless rare for corporates to focus on helping people learn the skills of being in a team. Help is out there but, at his own admission, the team-building industry has not always covered itself in glory, prone as it is to “psycho-babble and mumbo jumbo”. Don’t dismiss it all though, he advises. “People are right to be sceptical but at the same time do look for the small percentage that is useful.”

Unfortunately, of the companies that are alert to the benefits of co-operative working, many are too keen to force team-play or decide merely to pay lip service to it. In trying to manipulate the right environment they see team-building exercises – often referred to as away-days – an ‘event’ in themselves. This, argues Loftus, frequently creates “toe-curling” bonding sessions that can ultimately create inattention to results as the realisation that the team exists to perform is lost amidst the thrill of connection. This, he hastens to add, has never been his experience when working with treasury teams.

The team-builder

As a practitioner of many years’ experience, James Koh, Group Treasurer of Vertu Corporation, has set up a number of global treasury teams from scratch giving him the opportunity to handpick and work with some of the best teams, having, as he says, “learned the hard way” as to what works and what doesn’t.

The mark of a great team for him is one that is “tightly knit and which gels well together”. By encouraging each member to be “competitive from start to finish, highly communicative and always striving to be the best in class”, Koh says it is possible to create a highly motivated team. When that team has a clear set of treasury objectives and is led by a hands-on treasurer, he feels the function can be a well-respected and integral part of finance, “in-step with the CFO and the company objectives”. Indeed, he adds, “the role performed by treasury is an integral part of the finance function; a good CFO knows that and relies upon the utmost professionalism from the treasury team”.

Having been at the sharp end of treasury for a variety of businesses and sectors Koh has built up an impressive CV but has seen on his journey a number of instances where teams have failed to perform. Lack of direction and no clear set of KPIs and no monitoring, mentoring nor specific training often play a role in the underperforming treasury. But Koh digs deeper, recognising the damage that can be inflicted by a treasurer lacking in motivation. This can be exacerbated where there is no close working relationship with CFO or little support from them, and communication within the team itself team or between the treasurer and CFO fails.

When creating an effective team there are a number of elements that need to be taken into account to achieve best results says Koh and for him it all starts with a group of people who are “loud and communicative”, even about the problems. “Shout so the whole team and the treasurer know what’s going on,” he advises. “It’s all about communication. It’s vital: no quiet team please!” Not being afraid to make “noise” is a good way of airing any mistakes at the earliest possible time “so they are easier to deal with”. It is, after all, a team effort “and we stand or fall as one”.

“The role performed by treasury is an integral part of the finance function; a good CFO knows that and relies upon the utmost professionalism from the treasury team.”

James Koh, Group Treasurer, Vertu Corporation

Picking the “right crew for the right results” is his goal but he admits that setting up a treasury from scratch is not easy. “The best drivers and KPIs, the correct motivation and ongoing tracking, all require constant attention,” he states. “All I might add without compromise and strictly as per group treasury policy as mandated by the board.”

A great treasury team comes in all shapes and sizes, notes Koh. “The greater the diversity, the richer the team is. But it takes a good treasurer to recognise these talents, to grow and nurture them – not cushion them but to stretch them beyond their comfort zone but still within their capabilities.” The methods he uses to spot and develop potential amongst staff include challenging KPIs and individual objectives. The team has to be motivated to achieve these hard but achievable goals and targets. “I personally take on board key members of my team for special hands-on mentoring,” explains Koh. “It is always such a pleasure when they pass their letters, excel in their delivery and move on to greater and better things. I am glad I had the opportunity to be part of and help shape their greater career in treasury.”

Of course, personnel issues can arise and as an experienced treasurer, Koh says he tends to be able to “pick the good ones from the bad” quickly. “It helps to have an instinct for spotting potential problems; it’s part of my job and my employers expect no less,” he says. When dealing with negativity in addition to ensuring a “tight and constant working relationship” with the CFO and the Board of Directors, Koh suggest “lots and lots of clear and precise communication” is required between the treasurer and treasury team. This must be backed up by setting clear and precise KPIs and objectives to ensure each member knows what is expected of them. “And if and when they achieve or exceed their KPIs, they then get rewarded,” states Koh. “When the treasury team performs well, I also perform well. That is my motivation for wanting my team to succeed. Simple!”

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