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ctc guide Leadership in Treasury: Attracting and Retaining Talent

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ctc guide Leadership in Treasury: Attracting and Retaining Talent

By Nilly Essaides

ContentsExecutive Summary Page 1

Recruiting Talent Page 5

Sidebar: AFP Global Career Center Page 6

Sidebar: Developing Soft Skills Page 9

Retaining and Developing Talent Page 10

Conclusion and Best Practices Page 15

Sidebar: Best Practices Page 16

www.AFPonline.org ©2014 Association for Financial Professionals, Inc. All Rights Reserved 1

CTC GUIDE: Leadership in Treasury: Attracting and Retaining Talent

Recruiting and Developing Treasury Talent

Executive SummaryRecruiting and developing top talent has never been more important. Globalization

and changing demographics have created a talent gap across industries and geogra-

phies—a gap which grows exponentially with the complexity of the job. Never before

have employers had to face the challenge that, despite a growing population, they must

now recruit from an ever-shrinking pool of talent. As skilled professionals continue

to age out of the workforce, the supply of fresh talent has failed to keep pace, leading

to global competition over skilled workers. Even if a company is fortunate enough to

recruit top talent, its ability to retain that person is continuously challenged.

Within treasury, this challenge is magnified for two reasons. First, treasuries are

typically so lean that finding top talent is even more critical as there is no organiza-

tional slack. Second, the role of treasury has grown more strategic, thus altering the

skill set, competencies and career paths of treasury professionals. Technical skills may

have mattered most in the past, but today’s treasury groups increasingly seek candidates

skilled in collaboration, leadership and persuasion. “Managers of treasury professionals

often hire competent staff only to have them mired in manual tasks for a good part of

their working day, said Jason Torgler, Vice President, Reval.

“Companies that place an emphasis on leveraging technology have happier employees

and less turnover, and those employees add more value to the firm.”

Treasury executives today spend more time on the recruitment and selection of

talent than ever before. Unfortunately, most managers are not trained to identify top

performers, further increasing the recruitment challenge.

However, successful recruitment is not where the story ends. In order to retain top

performers—and thereby compete in the global market—companies must engage

in professional development, such as leadership training. Treasury executives are

increasingly concerned with identifying their top performers, and working to engage,

develop and retain them.

As the role of treasurer continues to evolve and develop in its complexity, finding

and retaining the right people with the right competencies becomes an even big-

ger challenge. Dozens of conversations with finance experts and practitioners make

evident that the finance industry is feeling the pressure of the talent gap, leading

treasurers to become more creative in their methods to source and retain talent.

2 ©2014 Association for Financial Professionals, Inc. All Rights Reserved www.AFPonline.org


There are three basic themes to this report:

1. No matter the effort or approach, it is simply hard to find good people.

2. Most managers are not trained to identify the right people for the job.

3. Once hired, talent must be developed to achieve maximum team performance.

We spoke with experts and eight senior treasury executives from North American companies, across industry lines, to learn about their hiring and reten-tion processes. Their stories are woven into the fabric of this report. The recurrent theme of which is: that the quality of people who comprise the treasury staff is considered a competitive advantage in a profession in which many manual processes are fast becoming automated and commoditized.

Choosing the right people for the right roles is the key to organizational success, according to Claudio Fernandez-Araoz, a senior adviser at global search firm, Egon Zehnder, and author of “Great People Decisions.” His new book, “It’s Not the How or the What but the Who,” is due out in June. In a conversation with AFP, Fernandez-Araoz listed three key reasons that the right people are key:

1. “Regardless of what business or geography the company is in, once you are a senior manager, everything will depend on the

people you’ve chosen.”

2. “Few people are aware that we live in a world in which the difference between an average and an outstanding candidate is huge and growing with the complexity of the job. In the old days of assembly lines, the difference between an average and a great performer may have been around 40 percent. Today, the difference between a good and an excellent computer programmer is 1,200 percent.”

3. “We are entering a time in which there are three unprecedented forces that will dramati-cally increase the demand for talent. First,

Introductionglobalization means more players are competing for the same ‘purse’ of talent. Next is changing de-mographics, as the number of young versus older talent is dramatically reduced. Finally, not enough talent is being developed. The pipeline is drying up. Therefore it’s key to identify your best people, and properly retain, develop and engage them.”

During the first era of human development, physi-cal strength was the critical success factor. After the Industrial Revolution, the focus turned to specific, job-related experience. “The focus today is not as much on directly relevant experience as on the key competencies required for the leadership role,” said Fernandez-Araoz. “As these roles have become more complex, companies need to ask: ‘what are the skills, knowledge, and abili-ties to be successful in a particular role?’” he said.

The Evolving Role of Treasury The daily decisions made by treasury can greatly

affect a company’s value. “Increasing the return on cash balance by 100 basis points can mean significant incremental income,” said Honeywell Treasurer John Tus. “I’m looking for people who are engaged and focused on wanting to do a good job and are not afraid to make mistakes and learn from them. I look for staff with strong intellect, judgment, and a relevant aca-demic background.”

At many companies, treasury has become a “high-value, problem-solving organization,” said Liz Ewing, partner, Financial Officer Practice and Legal, Risk & Compli-ance Practice at Heidrick & Struggles. “If a company’s strategy is X, the question for treasury is: what can we do with respect to capital structure, cash management, risk management, etc. to support execution of the strat-egy? A company can have a great strategy, but without a strong foundation in finance it may not be successful. It’s not just strategy, it’s the foundation underneath that comes from functional areas such as treasury.”

While some companies continue to look for individuals with deep treasury expertise, others are showing growing interest in candidates with experience beyond treasury. “Organizations are thinking more broadly with respect to



the finance organization and developing people who are multi-disciplined as opposed to silo oriented with one area of expertise,” Ewing said. “They are recruiting tal-ent with the ability to go beyond treasury. Core treasury skills are necessary. But they’re looking for people who can grab a seat at the table and bring something with them right away.”

In effect, this change in perspective is happening on both ends of the hiring equation. “Candidates express a strong interest in joining companies where they’re not just going to be in a treasury silo,” Ewing added. “They’re looking for organizations where they can leverage good leadership, strategy and treasury skills into other areas of finance such as operational finance or investor relations.”

Ewing is not alone in noticing these developments. “One of the trends that we’ve seen is moving away from only focusing on technical skills and putting a greater emphasis on candidates’ ability to collaborate and influence others in the organization. Whereas, historically, the emphasis was on technical skills, at-tention to details, and the candidates’ ability to follow policy,” said Dr. Michael Hepperlen, a senior consul-tant with MDA, a leadership assessment and develop-ment consultancy that works with treasury groups.

In addition, treasurers need to develop a succes-sion plan, and focus on their key talent, “making sure they’re giving them an opportunity to develop technical skills, as well as people skills and a collab-orative approach to getting the results,” Hepperlen said. “To be truly successful as senior leaders in treasury, candidates need to understand the business and look for creative solutions for both regulatory and business requirements.”

Example: HoneywellTreasury has always been a strategic player at Honeywell. “We start with: how does the busi-ness create economic value and what are the key drivers?” Treasurer John Tus said. The big-gest value drivers are strategies that increase revenue and return on invested capital. Next, companies need to define how treasury fits into

the economic model. “Here are our business objectives; how does treasury facilitate the execution of those objectives?” said Tus. “What we’re trying to do in treasury is optimize the deployment of cash to maximize the creation of economic value while managing financial risks. We need to know where that cash is being generated and the frictional cost (tax, regula-tory and foreign exchange impact) of moving that cash to investments that earn a return in excess of our cost of capital.”

Treasury’s success is derived from under-standing its role within the organization, Tus added. “So when we get those senior executive-level questions—e.g., we’re thinking of doing an acquisition, how would we finance the transac-tion and what would the affect be on our balance sheet and credit rating?—we can provide an immediate answer. The worst thing I can do is tell that executive that I’ll get back to them two weeks later with a PowerPoint presentation.”

Honeywell’s treasury is routinely engaged in the deployment of capital through M&A, stock buybacks and dividends, and the implication on liquidity and financial flexibility, Tus said. So, like management, “treasury needs to look at the company from an investor perspective. One of the weaknesses I see among some finance professionals is their preoccupation with accounting versus economic metrics. As a result, some may be willing to make short-term decisions that destroy opportunities to create long-term value.”

“In finance, we see very much the same leadership skills that we’re seeing in many executive leadership positions,” said Arun Dhingra, financial leader expert at Egon Zehnder. “Those are: communication, critical thinking, and a strong strategic orientation. The tech-nical skills are the price of admission. What makes a candidate stand out is his or her strategic orientation and the ability to communicate internally, across the organization and to external stakeholders.”



The same skills apply to treasurers. “Companies want a treasurer who understands not just capital markets but what are the cash flows needs of the business and how it generates money, because they will ultimately have tax and liquidity consequences,” Dhingra said. “They want a treasurer who can think big picture, understand the market, and understand the business and how it generates revenue.”

Of course, not everyone in treasury wants to be CFO. Some people prefer staying in the function, ac-cording to Ewing. “However, that can become limiting for them and their companies. While they’re tremen-dous subject matter experts, they can make themselves too narrow in terms of expertise,” she said. “To the extent there are peers or subordinates who would bene-fit from rotational opportunities, that can’t happen, because those who choose to stay in their positions may be blocking that vertical role for others.”

In fact, “it takes all kinds to run a successful treasury,” said Dennis Sweeney, treasury solutions executive at Bank of America Merrill Lynch and a 20-year veteran of GE’s treasury team, most recently as deputy treasurer. “Having diverse backgrounds is very important,” he said. “You want people who think independently and have different perspectives. The ideal treasury has a blend of experienced professionals and more general talent that rotates through.”

“A lot of treasuries are increasingly sophisticated, leveraging management systems, technology, and out-sourcing business processes through banking partners,” Sweeney explained. “What’s left is the high-end skill set; that’s critical thinking and analysis with a global perspective, which takes a different kind of person.”

Example: Mosaic Company“Mosaic is going through a lot of changes, and we need to change along with it to serve the needs of the company,” said Treasurer Cris Barros, CTP. “What we need are people who can think strategically, who can antici-pate the needs of the company and serve our internal and external customers. We need leaders, people who can recruit, train, devel-op and motivate their staff to deliver the best

results. All companies have roughly the same systems. What differentiates one treasury organization from the others is the people and all the intangible value they create through leadership, motivation and strategies.”

This sort of agenda has an impact on the skill set Barros is looking for. “We’re not looking at somebody to do mechanical tasks; frankly, that’s easy to find,” he said. “We need people who can develop partnerships, as we’re striv-ing to partner more with both internal and ex-ternal customers. We need people who would be sought after when key decisions are being made and can earn a seat at the table.”

According to Phil Murphy, consultant in Spencer Stuart’s Financial Officer Practice, “treasurer-plus” roles are increasingly common within organizations. Companies are looking for individuals “who can oversee other functional areas—such as investor rela-tions, FP&A, insurance, risk management, tax and corporate development—either immediately or in time,” Murphy said.

“The role of treasurer is not necessarily a destina-tion job anymore. Very often it’s a springboard for a broader job in the organization,” Murphy added. “That means treasurers must possess a broader port-folio of experiences. What differentiates the great candidates is their influencing skills, ability to build partnerships with the business, and skill in present-ing in front of senior management and the board.”

What’s telling, according to Murphy, is that when it’s time for the final phase of reference checks, com-panies are becoming more interested in speaking to operational leaders and other stakeholders outside of finance. “It speaks to the expectation that treasurers can drive change and influence business leaders,” he said. It also speaks to the candidates’ own expecta-tions. “The best candidates conduct a lot of due diligence during the search process to make sure that treasury plays a strategic role within the organization and has a real seat at the table. They want to have a platform to affect meaningful change and lead a



function that has an opportunity to create value.”These issues apply to both senior- and junior-level

positions in treasury, according to Murphy. “Younger treasury professionals need to spend enough time in a certain discipline to gain recognition as a subject matter expert,” he said.

The question more junior professionals face is how much time to spend in a particular function to gain expertise and when to broaden that horizon. “Breadth of skills is valued regardless of where one is in his or her career,” Murphy said. “The good news and the bad news is that, because treasury organiza-tions are typically very lean, this creates opportuni-ties for younger professionals to do a lot and take on as much responsibility as they can handle, which accelerates their development.”

Recruiting TalentThe first place most companies look when recruiting talent is inside their own company. At least at large companies, there are fairly common internal systems that help rotate high potential individuals through management programs.

Another source of top candidates is a trusted exter-nal recruiting firm. Less formal, but just as help-ful, are relationships with bankers. “A lot of bank sales and credit officers are good leads on potential employees,” said Bank of America’s Sweeney. “I also paid attention to people in the company who sub-mitted entries to external competitions. I wanted to recruit from where people are innovative.”

Example: MosaicBefore seeking candidates, management should take a step back to evaluate the position. “We really look at this as an opportunity to perhaps redesign the position or even make changes in the organizational structure,” Barros said. “Is there a different way, a better way? Should some-one else perform this role? We spend a lot of time trying to understand what the key activities are and what’s the required skill set, education and experience.”

Right off the bat, Barros added, “We may have some internal candidates with the potential and who’d make a good fit, not just in terms of their skills but also as a developmental opportunity to further their career.” If not, treasury works with HR to widen the search. “They [HR] have contacts with local and national search firms that often specialize in recruiting for finance and treasury,” he said.

The challenges are different when recruiting internationally, especially in Brazil, which is a large growth market for Mosaic. “It’s a hot market and is very competitive, and frankly we find it very difficult to retain good people or attract new people,” Barros said. “Sometimes they are priced out of our expectations.”

Mosaic interviews internal and external candi-dates differently. “With internal candidates, we really take a lot of care to provide that candidate exposure to different folks in the treasury group so we can learn more about them, and they can learn about what we do,” Barros said.

With external candidates, Mosaic relies on HR to do the first screening. “We try to give them exposure to different people,” Barros said. “We also want to give that person a view of other areas within treasury or of their peers. Or, if that person has direct reports, those direct reports would also interview the candidates. The hiring manager has the final say, and the multiple per-spectives are very helpful in getting a complete picture of the candidate.”

“I think the challenge is finding people who are broad and deep,” Sweeney explained. “You need staff with the experience to perform multiple functions. They should also be technically savvy to be able to handle complex technology. It’s also important to hire staff with a global perspective who are adaptable, i.e., comfortable with an environment of rapid change.”

“The other challenge is finding people that have more than just superficial knowledge,” Sweeney added. “I’m not big on job posting to websites. That’s not going to get you the kind of talent you



need.” Besides relying on networking and profes-sional recruiters, Sweeney suggested speaking with bankers. “They can point you in the direction of someone they’ve run across with the right skills and growth potential,” he said.

Example: Polaris“I don’t view treasury as a support function or shared service,” said Sean Bagan, treasurer of Polaris, the American manufacturer of snowmo-biles, ATV, and neighborhood electric vehicles. “I view it as a part of the business that can add strategic value and competitive advantage.”

Historically, Polaris has looked internally for candidates but the company recently became more open to outside candidates. Not long ago, Bagan hired a treasury manager from another organization in order to gain someone with more tangible treasury experience, as opposed to just hiring a smart finance person. “This person came in and added value imme-diately,” he said.

Additionally, a new head of HR came on board three years ago and brought to the company several useful tools and resources to help the Polaris finance division handle recruit-ment. For example, networking: “I rely on my bankers and on the local and national AFP net-work,” Bagan said. “We’re no longer looking for people who are just good with numbers. They also need the interpersonal skills and business acumen to be able to show the business how we can add value.”

Before Polaris makes an offer to a manager-level candidate, the organization puts them through an assessment run by MDA Lead-ership. “Their testing allows us to identify strengths and weaknesses and the candidates’ competencies, along with an unbiased opin-ion,” Bagan said. “We identify those compe-tencies and success factors internally as we scope the job description.”

AFP Global Career CenterHow would you characterize your previous searches

for a treasury manager or senior treasury analyst?

A common complaint among employers and

recruiters who have tried to fill specialized

treasury positions is that it’s not as easy as it

sounds. There are two hurdles to jump over before

finding the most qualified jobseeker. Generic job

boards usually garner mediocre results when hiring

treasury talent. HR and hiring managers oftentimes

get bombarded with résumés from less-than-stellar

candidates who don’t quite have the right credentials.

However, weeding through to find the perfect match

doesn’t have to be so painful.

The AFP Global Career Center makes hiring

talent in the financial field an easy and seamless

process. To locate a well-qualified talent pool of

jobseekers who have achieved a Certified Treasury

Professional (CTP) credential or have proper work

experience in the treasury, finance and FP&A fields,

then visit www.AFPonline.org/Career. The AFP

Global Career Center is an online niche job board

that attracts top talent and job postings.

Employers should post jobs to the AFP Global

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weekly online newsletter, Treasury and Finance Week,

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Get started today at www.AFPonline.org/Career.

>



meets with HR to discuss next steps, which vary between manager and staff positions. For staff, the interview is performed solely within the department and is relatively informal. “I’m interested in seeing credentials and commu-nication skills, and I’m just as interested in the kind of questions the candidates are asking me, what interest they’re showing, and how much work they’ve done in advance to get to know our business,” he said.

“Clearly, people are as important to me as [they are] to any organization,” added Culotta. “Because we have a limited number of people, it’s important that we hire and retain people who can produce, be effective and efficient, and get on board pretty quickly.”

Unfortunately, many managers are not trained to select the right candidates. At a recent World Business Forum, only 20 of 4,000 participants—0.5 percent—admitted to Fernandez-Araoz that they’d studied the science and literature available regarding how to select the right people. He calls this phenom-enon “Russian Roulette at the top.”

In fact, many board members have no real educa-tion and background in how to identify the right candidates. That reality is even starker a few layers down. However, by reading books about talent, emerging behavioral economics, and the science of decision-making, senior managers can become aware of all the unconscious traps that drive hiring decisions and learn how to avoid them, Fernandez-Araoz said. “You need to practice,” he said. That means asking the right questions during interviews, going through the right sort of reference checks, and learning to define key competencies before bringing in a candidate.

“If you’re looking to hire a project manager with a tight deadline and a strict budget, don’t ask them to tell you about their strengths and weaknesses,” Fernandez-Araoz said. “The right questions in that scenario are: Have you had to manage a project with

Example: WawaOver the past couple of years, Wawa has man-aged to promote from within with the excep-tion of certain skilled positions. “In the case of external hires, we recruit primarily through online postings,” said Jay Culotta, treasurer at Wawa, Inc., the $10-billion East Coast chain of convenience stores/gas stations. “There’s enough interest and exposure that we’ve been able to hire through that medium.”

“What Wawa looks for in a candidate de-pends on the level within treasury,” Culotta said. “Our treasury resource requirements range from higher-level administrative and day-to-day operational expertise to director-level management and all levels in between,” he said. “If it’s a manager, we need project man-agement leadership skills. If it’s more highly-skilled staff, we turn more toward analytical skills. At the same time, through the interview process, we’re assessing the individual’s ability to interact with others and whether they have proven analytical skills based on their experi-ence. We believe that we can develop project management skills though participation in projects. They can learn on the job, as long as they have the interpersonal skills.”

When Wawa hires entry-level staff positions, Culotta anticipates that the new hire will hold the position for 1-2 years. “We’re looking for someone who can move within our treasury organization or within Wawa,” he said. “One promising associate whom we recently hired was only in the job for a year-and-a-half when he moved on to a higher-level position in our corporate facilities group. That’s by design. We weren’t disappointed. The goal is to move high potential associates up within the organization. That is our goal for all of our associates.”

When Wawa zeroes in on a handful of candi-dates, the interview process is a combination of structured and unstructured interactions. HR does the initial phone screening. Culotta then



a strict budget and tight deadline? What was your role? What were the circumstances? How did you do it? What was the outcome?”

Even the best MBA programs fail to teach students how to develop the skills to hire the right people, despite the fact that human capital is argu-ably the most important determinant of a compa-ny’s future success. A few years back, Fernandez-Araoz gave a talk at a life sciences company. Using electronic polling, he asked the managers whether they’d rehire their direct reports. Fifty percent said they wouldn’t. That’s a staggering number that speaks to the difficulty of choosing the right candidates for a job—and the costs of replacing existing non-performers.

1. Define competencies. Experts and treasurers alike agree that before making a hiring deci-sion, the hiring manager needs to figure out exactly what competencies the role requires in order to ensure that the right candidates are being identified. For example, will that role involve interaction with external and internal stakeholders? Another is the ability to influ-ence others. “If you want to check influence skills, ask the candidate: Have you ever been in a position when you had to influence others who are not reporting directly to you? What was the situation? What were the conse-quences and circumstances, and how did you approach it?” Fernando-Araoz said.

2. Check references. When checking refer-ences, it’s important to find objective sources. “People lie,” Fernando-Araoz said bluntly. Humans also have an optimistic bias. “We all think we are much better than we are,”

he said. One potential source of objective input: outsid-

ers and vendors who worked with the candidates. Indeed, Bank of America’s Sweeney gets a lot of reference calls. “People shouldn’t only call the references a candidate provides but try to iden-tify people who may know that person,” he said. “Through tools like LinkedIn, it’s not hard to find someone you know who knows the candidate.”

Example: Allianz Life Insurance Company of North America

When seeking to attract new talent to the fi-nance division of Allianz Life, Assistant Treasurer and AVP Sarah Schaus relies on the Minne-apolis AFP to post job offerings. Allianz Life is also a strong believer in promoting internally, but only if it means getting the right skill set. “If we don’t have the skills internally, our HR area does research and post job announcements on LinkedIn,” she said. “And I use my networking through the AFP’s Corporate Treasurer Council and broader AFP; it’s a great resource.”

For higher-level positions, Schaus conducts two rounds of interviews with the hiring manager and draws from a larger pool. In the second round of interviews, candidates meet some of the people who will report to them. She also tends to take potential senior leaders out to lunch, which often helps people let down their guard, making for a better dialogue. “It’s helped me with both definite yes’s and definite no’s,” she said. “We’ll dig pretty deeply in the interview process. The challenge is not finding candidates, it’s weeding them out.”

In addition to providing the immediate and necessary competencies, Schaus looks at the candidate “runway,” i.e., do they have the po-tential to develop and grow? With a team of 32 professionals, she said, “I do need some who are steady and willing to do the same job day in and day out,” but she’s also looking for people who can move around and rotate through different areas of treasury and beyond.

Example: EnbridgeAt Enbridge, a Canadian Energy company based in Calgary, recruitment is primarily internal. “We’ve been really fortunate to rotate folks from within Enbridge, at least within finance and certainly other teams that work with our treasury teams,” said Se-nior Treasury Director Jana Jordan. “The treasury department is considered number one on most finance employees’ lists for rotational opportunities. Employees know they have an opportunity to grow



and develop finance skills in areas from financial planning to capital markets because the company is so active. And treasury affords a great place to understand the company’s strategy.”

For some functions, Enbridge has had less success finding internal candidates, specifically those with more technical, capital markets skills. “Those positions generally involve background and experience in banking or capital markets, including, for example, project finance, for which exposure is generally afforded in the banking industry,” Jordan said.

An active HR team helps with the recruitment process. “They’re generally our first line of de-fense. For external positions, we’ll post in the general venues but also hit other sites like the Ca-nadian accounting sites, CFA sites, AFP, and So-ciety of Canadian Treasurers (SCT) roundtables,” Jordan said. “We leverage any connection within the community. We have more success hiring from within the city.”

The interview process is relatively homogenized through a process developed by HR. “Depend-ing on the specific role we’re looking for, we’ll run through more tailored questions,” Jordan said. The company also utilizes a standard personality test to help assess competencies and weaknesses, mainly for external hires.

Providing its employees access to development is important to Enbridge; so much so that the compa-ny created an in-house education center: Enbridge University. The university provides “probably 70 per-cent” of team training. “We have wonderful courses available,” said Jordan.

Leadership development has recently become a strategic focus at Enbridge, brought on by a new CEO and president. “We realized that we needed to evaluate talent consistently using predefined leader-ship competency screens,” said Jordan. “There was a recognition that we’ve grown significantly as a company over the past 20 years, and, over time, we have not really recognized the importance of having one leadership development training—having all of our leadership speaking the same language.”

>Developing Soft Skills“The need for soft skills is critical,” said Heidrick

& Struggles’ Ewing. “When you think about

evolution in corporate America, in senior lead-

ership and leadership models within different

companies, the themes have evolved to really

focus and emphasize people who, regardless of

function, understand how to build strong, critical

relationships throughout the organization, and

who understand how to be business partners.

For finance people the need is not just how you

report the numbers or provide the financing and

manage the cash,” she said. “It’s also creating

measures and analytics that help the businesses

gain a window into what they do, how they’re

performing, and how to enhance their perfor-

mance. Next, finance professionals need to act

as facilitators in helping the business accomplish

its goals.”

For example, treasury can work with sales

teams to talk about credit limits and payment

terms that protect the organization while also

offering smart ways to make the sales, not just

say no. “The question for treasury is: How can

we help the business commercially through

what we do in finance?” Ewing said. Instead

of just being gatekeepers, “the role of treasury

should be to help the business accomplish its

goals in order to increase shareholder value.”

That’s where soft skills come in. “The key is to

be good business partners,” Ewing said. “There

are a lot of things that we’re doing in finance

that can have a great impact on business.

However, areas where they can be impactful

may not be under their direct span of control.

We need to build those business partnerships.”



Retaining and Developing TalentAlthough finding talent is critical, keeping that tal-ent engaged is just as crucial. A recent AFP survey, conducted in collaboration with VitalSmarts, shows that offering a career path is a finance organization’s most pressing challenge – and its best option for retaining top talent.

Study after study shows that top performers typi-cally leave first. With every turnover, the company loses a valuable investment. Companies utilize dif-ferent approaches to developing and retaining their talent, from rotational assignment to special projects, recognition or rewards.

Career paths

Continuing education

Engagement

Developing staff soft skills for presentations to senior management

Cross training

Recruiting

Retention

Other

Organization biggest staff development challenge in finance

0% 5% 10% 15% 20% 25% 30% 35%

33%

9%

13%

13%

16%

5%

5%

6%

Mentoring program

Skip-level meetings

Internship program

College recruiting/hiring

Job rotations

Selection of “high potentials” for career development

Individual development plans (IDPs) Financial support for continuing education/certifications

Department or company rewards/recognition

Flexible work arrangements Skill development through competency testing/training

Other

Programs an organization regularly use or maintain to keep its finance staff performing at a high level

0% 10% 20% 30% 40% 50% 60% 70%

26%

9%

45%

57%

40%

50%

25%

3%

29%

11%

11%

23%

Source AFP/Vital Smarts

Source AFP/Vital Smarts



Developing Leadership SkillsJoe Folkman and Jack Zenger of Zenger Folkman

leadership consultancy, designed the 360-degree as-sessment a dozen years ago. The 360-degree assess-ment provides employees with anonymous feedback from their managers, peers and direct reports. “The process was to measure people and figure out their strengths and weakness. Initially, we used to focus on what people could improve,” Folkman said. “That was pretty depressing.”

Over time, the two figured out that what people really care about is helping others become great at a few key competences. “The best leaders have some profound strengths and most have some weaknesses,” Folkman said. “The one thing you can’t have in a leader is a fatal flaw. But in 70-80 percent of the leaders, we focus on their strength. It’s a very different metric.”

In Folkman’s experience, when hiring for finance, the assumption going in is that the successful candi-date understands how to do the technical aspects of the job. “But we see a lot of people who need to be led, and that requires expertise in other competen-cies,” he said. “What we’ve identified are the key competencies to help a leader differentiate his or herself. You’d love to have a very talented treasurer. What people also want is a treasurer that is honest and has high integrity. In treasury, that’s a key issue. If you’ve got somebody really smart but unethical, that could be the downfall of the organization.”

Folkman found, by studying various competen-cies—such as honesty, integrity, technical expertise, drive, the ability to set and meet targets, initiative, and problem-solving skills—that while some people are book smart, they’re not “street smart.” What that means, he said, is that “they understand the theory, but they don’t know how to apply that theory. We find that there’s clear correlation between self-devel-opment and opening yourself up to feedback, and the ability to develop leadership skills. Over time people tend to tell you what you want to hear. The key is to find a way to get at the truth. How did things really go, how you can do better? Those leaders that want to hear the truth are good at self-development.”

It’s also crucial for leaders to inspire and motivate others. “This is about push and pull,” Folkman said. “Push is the drive for results. Pushing is easier. We know how to do it. Pulling is harder; it’s the abil-ity to inspire people to get them to do more, to be excited and passionate about their work. That’s a dif-ferent behavior. That includes high-level communi-cation skills, developing your team, and encouraging teamwork. These are key competencies when dealing with people, helping people feel valuable.”

The last major dimension, according to Folkman, is “where we’re headed—a strategic perspective and vision. That’s true across functions.”

Folkman advises treasurers to have their own personal development plan. “It is important to walk out of a ‘360 review’ with a development plan. They usually have a performance review and development process [for staff ] but many leaders don’t have their own active development plan. When I meet with groups of leaders I usually ask, ‘How many of you have a development plan you are actively working on?’ Only a few hands go up. The problem is that most people don’t know what they need to do to move from a good leader to a great leader.”

Example: Allianz Life Insurance “Several years ago we looked for people who could do daily processing. Now we’re looking for process improvements and out-of-the-box thinking,” Schaus said. “You have to get good talent and retain it, then everybody wins. To this end, we use continuous process improvement and continue to motivate people.”

While Allianz places an emphasis on continuing education, they make time for fun, too. Schaus has an annual budget for the trea-sury team to spend on doing fun group activi-ties. This gives people who typically don’t have a budget to plan an event a chance to do so. Throughout the year, each of the six teams also receives funding to spend on a team lunch or happy hour. “We have to keep that work-life



balance,” she said. “You learn about people, things that you wouldn’t normally see.”

Allianz Life also offers broader recognition through weekly White Board Meetings. These weekly meetings give managers a chance to highlight the accomplishment of a team or individual in front of a wider audience.

The finance department also manages a mentoring program that’s very well received. About 35 percent of employees participate either as mentors or mentees. “It gives people an opportunity to work on particular skills or career planning with someone other than their immediate manager,” Schaus said. “We also give out ‘employee of the quarter’ and ‘employee of the year’ awards within finance. Anybody can nominate anyone for those awards. The winners are recognized in a town hall meeting. We try to do non-monetary com-pensation. We all like a ‘thank you’ from time to time. We make a concerted effort to make it natural to thank people.”

Example: MosaicAt Mosaic, each employee is encouraged to create a career development plan, or CDP. “We ask them to tell us their aspirational position, list what skills and experiences they believe are required to get there, and how they intend to acquire those competencies,” Barros said. Once identified, that information is taken into account when there’s a project that needs to be staffed, an open position, or even suggestions of job shadowing to meet those development objectives.

Employees own and manage their career development process. “We encourage people to go through the process and provide us input when we consider candidates or project staffing,” Barros said. “Some companies are more directive on the next step, or the next one after that. We tend to let our employees drive their career path.”

Do some employees put Barros’ job as their aspirational position? “Absolutely,” Barros said. “And if I move on, I need to have some-one to replace me. What that means is that if someone wants to be treasurer, that person would need to have exposure to different areas, so we encourage them to move to dif-ferent exposures.”

Mosaic also emphasizes team engagement and runs an engagement survey every 18 months. “We take the outcome of that survey very seriously, and develop action plans fol-lowing up on that,” Barros said. “In the last survey, career development ranked as the number one issue for treasury.”

According to Barros, positive engagement is created with these three actions:

1. Develop a compelling and exciting vision.

The vision needs to be one that’s aligned with the company’s strategy and is well communicated. “People need to under-stand where they fit in that vision. You can’t be motivated if you don’t have a sense that your job matters and you can have an impact,” Barros said.

2. Reward performance. Good performance should be rewarded, and there are dif-ferent ways to do so. It may be a bonus or a raise, but there are non-monetary opportunities as well, such as inclusion in interesting projects or giving people new responsibilities. Just the same, “poor per-formance cannot be tolerated. It can be a huge demoralizer for the team,”

Barros said.

3. Listen. “Everyone’s heard the saying ‘treat others as you want to be treated,’” Barros said. “My motto is: ‘Treat others as they want to be treated.’” That’s what the en-gagement survey is all about. “It highlights the key areas that, if we improve, would have significant impact on our engage-ment score,” he said. “Plus, it shows us the



key areas that if we don’t continue to pur-sue would have a detrimental impact on engagement. There’s plenty of evidence that shows that companies with engaged employees perform better and deliver higher shareholder value.”

Example: Large MultinationalKeeping staff engaged is very much a func-tion of open communication, according to the two assistant treasurers at this large com-pany. The two maintain an open door policy so anyone at any level can walk in to discuss any issue. It also means allowing for continu-ous training and education. In addition, “we rotate analysts through different positions, and almost all of them are CTP certified,” one assistant treasurer said. “That’s something we really encourage. CTP is an excellent oppor-tunity to assess what and how they’re doing, meet counterparts and become familiar with best practices. It also gives them the ability to enter into other roles.”

The company also has a recognition pro-gram where peers and managers nominate colleagues, and the winners go all the way up to the board level. In the board meeting, the winners read their accomplishment and receive an award. There’s also a Treasury Hall of Fame, that includes plaques and awards people have won for a job well done.

Visiting staff or writing a personal note can go a long way. One of the assistant treasurers recently traveled to China to congratulate the local team. “The mere fact that he showed up in person to thank the team for a job well done was huge,” said his colleague. The occasion was a successful RFP for the China banking business. “We relied heavily on the local con-troller organization, and I felt it was important to recognize their involvement in the process and give them a formal letter and a plaque in person,” he said.

The letters were read and plaques were handed out in front of the regional CFO. The face-to-face recognition greatly facilitated the interaction between treasury in Hong Kong and the China-based finance group. “Now, when the people in Hong Kong ask for a fa-vor, they [the Chinese team] drop everything to get it done,” he said.

Back home, it’s easier to motivate staff. “We do a lot outside of the office to build social relationships,” one assistant treasurer said. “We go out to lunch with them, or meet them after work, if there’s an opportunity. We spend time with them. A lot of the time it’s not even a conversation about work. It’s about their kids or soccer. It’s more of a social event.”

Example: Wawa “We employ several programs to promote engagement at Wawa, which help to identify needs for improvement with respect to as-sociate engagement,” Culotta said. “Once we identify needs, working with our staff, we develop an impact plan to help to continu-ously improve engagement.”

Wawa uses Gallup tools to assess associ-ate engagement and, from the results, they identify actionable ways to improve. One important step is listening to the staff. “We de-veloped impact plans based on their input so that we can meet their expectations,” Culotta said. “We listen to them. This approach has been successful and, over time, our scores have improved.”

One outshoot of the Gallup process was instituting a well-defined cross-training pro-gram within the treasury organization and not necessarily at the same lateral level. “Some-times we cross-train one or two levels above an individuals’ current level,” Culotta said. “This gives our staff an opportunity to learn more about the business and helps keep the treasury team members engaged.”



In addition, weekly staff meetings help everyone stay connected and informed on various projects. “There’s also a meeting to address what’s going on in the company as a whole, i.e., key operating statistics,” Culotta said. “It gives our staff the ability to put things in context.”

While there has been talk of developing a structured rotational program in finance, so far the rotations have been more ad hoc. Culotta came to treasury from accounting and tax, and he benefited when the former treasurer moved into the internal audit lead role. “So we switched controller and treasurer roles,” he said. “We’ve done that at the VP level in the past as well.”

After some discussion within the finance group about staff development, they initiated a manager rotation, with the treasury opera-tions manager, supply chain manager and real estate finance manager switching roles. “The move showed that we’re interested in develop-ing our managers in a selective manner based on specific development opportunities,” Culotta said. “In the future, such rotations will be con-sidered for both managers and staff.”

Example: Honeywell Honeywell treasury has seven key processes with an owner assigned to each, and, ac-cording to Tus, steps are taken to ensure that there’s cross-process fertilization among trea-sury team members. “Every year, the leader of each process presents to the organization the state of our process compared to the world-class standard,” Tus said.

Process owners then define a business case and roadmap for achieving the world-class standard. The roadmap is very specific, for instance: defining new systems requirements, interfaces with the business units and banks, and changes to operating policies. “The road-map for each process provides the basis for

each member’s goals and objectives for the coming year,” Tus said. “It’s a great way to de-velop process owners and get cross-functional engagement, feedback, and learning.”

During weekly staff meetings, Tus reviews current performance, progress on annual and quarterly goals, and the status of projects cur-rently in the works. Each person updates the team on their area of responsibility. Teamwork and communication are key to developing a good working knowledge of what others in the organization are looking to do with their careers. Tus also leverages bank training for junior staff, encourages staff members to at-tend AFP events and to submit applications for national and international awards. Success means different things to different people. “As long as we meet our commitments and deliver results, the staff has maximum flexibility in performing their job,” Tus said.

Another key element in developing a high-performance culture is “straight talk.” Tus: “I like coming to work every day. What I ask my staff is: ‘What can I do to make this an en-vironment that you want to come to work in ev-ery day?’ I continuously recruit and re-recruit the best people by removing the barriers that prohibit them from succeeding.”

Example: Polaris Bagan encourages his team to take advan-tage of trainings offered by banks and other service providers. “AFP has also been an out-standing resource, and I encourage my team to get involved in that as well,” he said.

Employees are encouraged to spend a week, if not more, of their year pursuing profes-sional development opportunities. “I’m going to support your development, but you need to proactively identify those development oppor-tunities that will help your career,” he said.

In addition to a strong, internal leadership-development program, the company offers



courses to high-potential employees through the University of Minnesota. Employees are also privy to an excellent tuition reimburse-ment program.

Another way to develop people, said Bagan, is to give them an opportunity to get involved in projects beyond treasury. “My people can get involved beyond their treasury role, in a cross-functional team of some sort.”

Recognition is one way Polaris enhances engagement. There are a number of resourc-es available, such as management awards, gift cards, and years-of-service awards. In addition, after one year of service, Polaris em-ployees are provided access to a company snowmobile, off-road vehicle, or motorcycle. “It speaks to our culture,” Bagan said. “And the program serves to give us immediate customer feedback.”

Bagan provides his staff with instantaneous feedback to ensure there are no surprises at the end of the year. “We also share talented treasury personnel with other parts of the orga-nization to keep employees interested and ex-cited about coming to work,” he said. “Those people who come back into treasury can take on a management role, but just as important they’ve educated their ‘new homes’ about the importance and the role of treasury in the organization. They act as treasury advocates.”

The company also has a formal rotational finance development program. “We hire out of college, and trainees spend two years do-ing four different rotations, six months each,” Bagan said. “We assess talent and potentially bring them in through the finance internship program. If you show people that you want to be finance leader, then you want to spend time in the different disciplines of finance such as manufacturing finance, FP&A, con-trollership, tax, internal audit. If nothing else, it gives you exposure to other finance leaders.”

Conclusion and Best PracticesDemographics and globalization are making the search for top talent difficult for all companies, across all functions. But finance is particularly hard hit due to the profession’s transformation. Compliance and accounting, finance in general, and treasury in particular, have become a partner of the business. The role of these finance profes-sionals is now one charged with supporting the company’s strategic goals and working closely with senior leadership on analyzing and executing those goals.

Against this backdrop of general increased demand and scarcer resources, lean treasury departments face the added challenge of finding talent with a combination of specialized techni-cal expertise and an increasing array of soft skills, such as collaboration, influencing, strategic part-nership and decision-making. “The expectations of today’s treasurer have expanded beyond what were traditionally considered the core treasury requirements,” said Murphy of Spencer Stuart. “Several years ago, the role called for excellence in transaction execution above all else. Today, organizations demand treasurers who are forward-looking, strategic, and true business partners. The technical skills are the price of admission. Candi-dates distinguish themselves by displaying broad business acumen and superior leadership and influencing skills.”

Added Murphy, “Treasurer candidates today need to meet a higher standard and be deemed as having boardroom credibility. It makes top treasurer roles harder to attain, but that is a good thing because it indicates the rising profile of treasury within organizations.”

A few things managers should keep in mind for recruiting, and retaining, top talent:

• Actively maintain a balance between career treasury staff and financial professionals who view the role as a stepping stone.

• Engage with and be attuned to the career path of each individual.



• Develop their own leadership and talent-identification skills through books, executive coaching and practice. Some reference books to consider:- “Great People Decisions,” by Claudio Hernandez-Araoz- “Decisive,” by Chip and Dan Heath- “Predictably Irrational,” by Dan Aeriely- “Thinking Fast and Slow,” by Daniel Kaneman

These and many other resources can help get treasurers started on the path toward making bet-ter people choices.

Once you’ve made a great hire, engagement and development, as this guide has suggested, is key to achieving maximum team performance—and retaining top talent. “We have continued to raise the bar,” said Cris Barros, Wawa’s treasurer. “I’ve been in treasury for seven years, and within those seven I have continuously created opportunities for long-term associates to develop better project management and analytical skills.” For example, Barros gets treasury involved in cross-functional teams like the gift card and credit card process-ing projects. “We own the credit card processing, but the cross-functional team of 5-6 people meet frequently to track the project and its develop-ments,” he said.

In today’s market, every industry in every corner of the world is faced with the crucial challenge of recruiting, developing, and retaining top tal-ent from a smaller pool of qualified candidates. And, within treasury, that pool is now required to demonstrate a greater breadth of skills than ever before. The only way to meet this challenge is head-on: by equipping hiring managers with the tools, knowledge and leadership skills to find the right people, keep them engaged, and create op-portunities for team and individual development. Ultimately, it’s a win-win. After all: great people make great organizations.

>Best Practices

Hiring1. Define the job competencies.2. Identify talent with a “runway” for growth.3. Follow a structured process, which may

include multiple interviews as well as specialized personality tests.4. Ask the right questions.5. Check references specific to the job at hand.

Engagement and Retainment1. Keep your door open.2. Walk the floor and interact with junior staff.3. Provide immediate feedback: good and bad.4. Consider creative, non-monetary compensation, such as:

• Group and company-level recognition.• Internal awards.• Build team spirit outside the job.• Spend time one-on-one with each

employee outside the office.• Encourage continuing education and support outside designations.• Rotate into other finance, treasury and business roles.• Assign special cross-functional projects.• Encourage job shadowing and mentoring through institutionalized

programs.• Ensure the big picture and company strategy is visible to the lowest-level practitioner.

About the Author

Nilly Essaides is Director of Practitioner Content Development at the Association for Financial Professionals. Nilly has over 20 years of experience in research, writing and meeting facilitation in the global treasury arena. She is a thought leader and the author of multiple in-depth AFP Guides on treasury topics as well as monthly articles in AFP Exchange, the AFP’s flagship publication. Nilly was managing director at the NeuGroup and co-led the company’s successful peer group business. Nilly also co-authored a book about knowledge management and how to transfer best practices with the American Productivity and Quality Center (APQC).

About the Association for Financial Professionals

Headquartered outside Washington, D.C., the Association for Financial Professionals (AFP) is the professional society that represents finance executives globally. AFP established and administers the Certified Treasury ProfessionalTM and Certified Corporate FP&A ProfessionalTM credentials, which set standards of excellence in finance. The quarterly AFP Corporate Cash IndicatorsTM serve as a bellwether of economic growth. The AFP Annual Conference is the largest networking event for corporate finance professionals in the world. AFP, Association for Financial Professionals, Certified Treasury Professional, and Certified Corporate Financial Planning & Analysis Professional are registered trademarks of the Association for Financial Professionals.© 2014 Association for Financial Professionals, Inc. All Rights Reserved.

General Inquiries [email protected]

Web Site www.AFPonline.org

Phone 301.907.2862

Corporate Treasurers Council

The Corporate Treasurers Council is the executive-level membership of AFP. The CTC features tailor-made prod-ucts, events and exclusive networking opportunities all year long for treasury and finance executives that address the latest industry insights, trends and best practices and will provide guidance, practical tools and the validation needed to move forward in making critical decisions.

When you join AFP and have the title of corporate treasurer, assistant treasurer, chief financial officer, vice president of finance or controller, you are automatically enrolled in the Corporate Treasurers Council (CTC) and have access to CTC products and events.

For more information go to www.corporatetreasurers.org

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