Boosting Communication: Five Skills a Treasurer Needs to Improve Career Prospects
These days we’re seeing more treasurers becoming CFOs. There once was a time when controllers used to nudge out treasurers when it came to being promoted, but the two positions are much more evenly placed now, with treasurers even nosing ahead.
One of the reasons (and blessings in disguise) for this trend is that treasury departments around the world are facing serious challenges. One of the greatest is new technology, which makes it easier to automate or outsource much of a treasurer’s traditional work. So treasurers who adapt quickly move higher up the value chain. But the key is to develop skills to handle a broad set of issues, from managing cash, risk and taxes, to dealing with people and installing IT.
Being the treasurer of a company offers good career prospects and in some industries it is a sure-fire route to the top of the finance function. On the flip-side, treasurers who don’t enhance their vision and skills find it hard to break out of a department that is slowly declining in importance, as virtually anything [in treasury] can be outsourced.
With many routine treasury tasks outsourced, a treasurer must look to add value to his firm’s working capital practices. These attitudes need to be cultivated, with treasurers making greater use of technology – particularly the Internet – to centralise their departments, and then outsource certain functions as to move away from transaction processing to more strategic, decision-support roles. The net result is that, although treasury departments may be getting smaller in terms of headcount, they are gaining in importance.
That makes treasury a highly attractive career route. The growing need for CFOs to understand more fully the nature of corporate risk means that finance executives with treasury experience are likely to be in big demand in future.
Not that treasurers have all the skills they’ll need to become CFOs, they lack controlling experience and also need to work hard on developing their communication and inter-personal skills, which are crucial when it comes to networking at the highest levels. But there’s much that treasurers can do to prepare for life beyond the treasury function, and to ensure that their department becomes a training ground for future leaders of the company. In coming days treasury will be so strategic that even entry-level posts will demand the highest calibre of candidate.
Many years ago, life for the corporate treasurer was much simpler, focusing largely on receiving, borrowing and investing cash. The role has since evolved dramatically in response to such pressures as volatile money markets, the need to proactively plan future financing and the effective use of information technology as an aid to intelligent decision-making.
Today to move up the value chain treasurers must be a natural oral and written communicators, able both to negotiate and explain complex financial and strategic issues in a way that is easy to grasp. Businesses require treasurers to articulate view points and smoothly interact with external as well internal clients including top management and board.
The corporate treasurers are now a relationship manager, balancing the demands of the business itself (including subsidiaries), and such external stakeholders as banks, creditors and shareholders. Unsurprisingly therefore, communication skills and additional general management experience can be vital to meet the wider demands of the senior roles.
As treasury roles become more all embracing, the demand for both top-level technical ability and strong interpersonal and management skills has increased. This combination is naturally hard to find, and has become an extremely valuable commodity in the recruitment marketplace.
In parallel with this, the treasurer’s wider inter-departmental and inter-company role means that compatibility – both within the senior management team and across the company – has become a critical factor in making a successful finance career. Yet while technical experience such as fundraising or foreign exchange involvement can be important, attributes such as inter-personal relationships can add a lot of value.
Successful implementation of corporate strategy is based on ensuring that investment activity focuses on the right projects yielding appropriate returns with manageable risk. Capital allocation between projects is critical to business success. Since it is often determined in practice at the operating level below the strategic level, it can easily undermine the strategy itself. Investment appraisal criteria must translate high-level financial and strategic objectives into simple, consistent financial measures that can be used for project evaluation and drive the right activities.
A treasurer’s understanding of cash flow drivers and ability to construct simple but realistic financial models aids the strategy process. These skills, combined with the fact that the treasurer is not at the centre of the process and can apply a more objective mind to it, provides important input in strategy development. A treasurer, with his/her knowledge of corporate finance and enhanced business modelling skills is uniquely placed to do this.
Treasurers must acquire and use his or her skills to the best advantage and explain in easily understood terms the organisations financial position both immediately, and projected to the foreseeable future, so that policy decisions can be made by the management in full knowledge of the financial implications of pursuing those policies. It means too that the treasurer must be fully committed to the aims and objectives of the organisation and understand its priorities so that his or her advice can be tailored and presented accordingly.
Traditional career paths cause treasurers to burrow ever deeper into their specific fields of expertise. Sometimes managers need to create a detour to increase perspective. It is an imperative to develop interdisciplinary perspectives to grow in today’s “always on the edge” business. What is marketing? How do you run a sales force? What is product development?
Though treasurers need a deep grounding in their specific discipline, they also need the ability to think outside that frame. Business practice in a global economy demands that business leaders have a broad range of knowledge; it is not enough to specialize in just one area.
Financial managers across all industries are aggressively working to improve operations, increase efficiency and enhance control. It is essential that companies make the right decisions the first time, and do everything within their power to optimize operational performance. As a result of economic and legislative pressures, the traditional dynamics of finance, treasury management and banking have changed.
Organizations are faced with the challenge to use technology extensively and reap benefits as well as make transitions smooth. Key is selecting technology tools that most effectively support a company’s requirements and that can be integrated with the financial data and process flows for these reasons, treasurers must continuously upgrade their skills and keep abreast of information technology changes relevant to finance and treasury.
Treasurers must try to gain new capabilities so that they can choose the right resources, developing the right approach and through proper execution, they can drive initiatives that will make a significant difference to corporate earnings and controls.