What's Neu - News from the The NeuGroup Network of Peer Groups
Here’s the most-cited takeaway mentioned by participants at the end of a recent HSBC NeuGroup Industry Treasurers’ Roundtable in Singapore: Throwing big money at a problem can be counterproductive to innovation, while being resource-starved often fosters new thinking about problems and spurs innovation. That observation by Darren Hubert, Chief Technology Officer for Microsoft Services in the region and echoed by Jennifer Doherty-Hayes, HSBC’s Asia Innovation Team Lead for Global Liquidity and Cash Management, struck a chord with treasurers trying to reach digital transformation goals without the support of IT or big budgets. You’ll find more insights in the roundtable summary by clicking here.
Here are some of the key takeaways from the ATLG-2018 H2 meeting in Milwaukee hosted by Harley Davidson and sponsored by Bloomberg:
- Cash awareness a matter of culture, so start building it. One challenge for growth company tech treasurers is their firms are used to generating so much cash that they tend to ignore the need to forecast and use it efficiently. So treasurers at such firms must do even more to build a culture of cash awareness to gain better visibility and cash forecasting accuracy for when it becomes more mission critical in the future. One treasurer created stickers and buttons to hand out to everyone in the company to get them thinking more about free cash flow.
- Step back to assess new bank relationships. As growth companies outgrow their incumbent banks they need to build a new bank group. This is not a decision they should make quickly. The consensus of the group was that they should step back and do their homework, figure out who are these banks, what are their capabilities, what coverage and commitments do they get and what kind of person will cover them, and do they know what they are doing. Also important is how the credit underwriting is done.
- Find out what matters to the C-suite. One treasurer told the group he had been trained to understand what matters to his bosses and then figure out how to align his own treasury objectives to what they care about. If your boss cares about ROIC, then treasury’s mission can be about that. To find out what matters to your boss, sometimes you just have to get lucky. When he started his latest treasurer role, it was at a company with a several-decade history but no real treasury activity to guide him on what the C-suite valued from its finance function, so he had undertaken a study of what it had done and what it had not, including share repurchase, which the firm had not done. One day, the CEO came in and said the stock was priced too low and he wanted to buy some back. It turned out share repurchase was something he cared about. “It is often better to be lucky than smart,” the treasurer noted.