George Davis (left), here with NeuGroup founder Joseph Neu, urged treasurers gathered at a tech summit in California to dream big and weigh in on strategy.
In a keynote address referencing iconic daydreamer Walter Mitty, George Davis—the former CFO of Intel and Qualcomm and the former CFO and treasurer of Applied Materials—urged dozens of treasurers attending NeuGroup’s Tech Strategic Finance Summit Treasurer Day to dream big, take risks and not wait for invitations to apply treasury’s valuable perspective and skill set to a company’s strategic decisions.
- Mr. Davis addressed members of NeuGroup for Tech Treasurers (known as Tech20 back when Mr. Davis was a member) and NeuGroup for Growth-Tech Treasury who gathered in person last week at The Ritz-Carlton in Half Moon Bay, California. RBC Capital Markets and Fitch Ratings sponsored the event.
- You can watch portions of a video interview NeuGroup Insights did with Mr. Davis by hitting the play button below.
Swim with the sharks. The fictional character Walter Mitty, Mr. Davis said, is blessed with capabilities well beyond the needs of his day-to-day work, so he daydreams. In a similar vein, he told members, “You’re blessed with capabilities as a treasurer that are essential to your company. And my guess is that you’re still underutilized.”
- To address that, Mr. Davis described his perfect treasury job as one where “treasury stuff” like cash management or liabilities and duration take up considerably less time than what the treasurer spends on activities that influence key strategic opportunities for the company—activities that “are the stuff of daydreams.”
- Those may include the company’s M&A agenda, investment prioritization (including R&D), dealing with activist shareholders and global risk management, including cyber risk.
- He warned that branching out into areas that present important challenges and pain points to CEOs, CFOs and boards may mean treasurers end up “in rough waters” with potential dangers as people within the company defend what they see as their turf. “It’s going to be out of your comfort zone,” he said.
- To illustrate the point humorously, he showed a clip of “The Secret Life of Walter Mitty” (2013) starring Ben Stiller in which Mitty jumps into ice-cold, shark-infested waters.
Don’t wait for an invite to swim strategically. Treasurers need to take risks and venture into strategic waters, even when they’re not invited. “Getting invited is tricky. If you wait for an invitation you’ll be mostly in your box,” Mr. Davis said. “Most people I’ve seen who do this aren’t invited. So how do you get yourself invited? Well, you have to be willing to engage without being invited.”
- He recommends telling the CFO you’re interested in weighing in on specific issues that fall outside your comfort zone. Another tactic: offer up a stand-out analyst on the treasury team to help on deals that will benefit from treasury’s ability to apply valuation methods and tools.
- Treasurers who take the initiative to offer valuable insights—without seeking credit—will find fewer hurdles in getting a seat at the table in future strategic endeavors.
- View the long hours that you and your team will put in when engaging in activism campaigns and deals as investments in satisfying, often fun work that will increase treasury’s value to the company.
Why inflation, recession and crypto make this a great time to be a treasurer. Several reasons Mr. Davis presented about why now is a great time to be a treasurer underscore his vision of the strategic value treasury is capable of providing to companies.
- Inflation: “Very few of us are old enough to have inflation in our resume. It’s a time when there’s no muscle memory for how do you respond to this. So it’s very fair for the CEO and the CFO to look to the treasurer and say, ‘hey, how should we be thinking about it, what are the strategies that people have employed historically and successfully in the face of inflation?’
- “That’s a great opportunity. When there’s a problem, you want to be the solution and I think the treasurer can play a big role.”
- Recession: “It introduces a lot of challenges for the company and the treasury portfolio and the skill sets that treasurers have are uniquely suited to thinking through strategies for getting through it. In a recession, the treasurer is definitely part of the solution.”
- Crypto: “It’s a legitimate question as to where does crypto fit for a lot of companies—you have to have a view. People understand now that there’s a much broader dynamic in crypto and there’s no better individual in the company than the treasurer and the treasury organization to look at all the issues that come with where it fits.”