From Cash to Collaboration: How Treasurers Can Transform Through Peer Learning and Partnership

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they build their careers, where they are now, where they see both themselves and the treasury profession going to next. Let's get on with the show. I'm joined by Joseph Noy, the founder and CEO of NOI Group. Joseph founded Neue Group 30 years ago to provide insights to treasury and finance lead leaders to help them succeed. In 2001, you transformed the company into more of a membership organization for peer knowledge exchange, tech sector by peer groups. If you've been listening any of you for six years, you would have heard me talking originally to Joseph was kind enough to be one of my first ever guests. That's right. Way back in 2019, before COVID before the shutters came down, we had an episode then we thought, should we just update that one? No, actually a lot's changed. So what we're going to do, I'm going to talk to Joseph a little bit more about. We'll go back through, so you don't have to visit that one from the archives if you would talk us through your career and then we'll go on to about NOI Group and who Noi Group are and because you and I both provide services to treasurers. So over to you, sir.

Yeah, no, thanks, Mike. Great to be here with you and congratulations on the podcast. Really, it's really done and you've done a great job with it. Kudos to you. I started off working for this company called Business International that had been purchased well before I started there by the Economist Group, provided all sorts of services for multinationals, mainly US multinationals, to help them do business around the world. And as part of that they had a research consulting division, a number of content divisions, but the basic idea was that they were advising multinationals across a number of different verticals, including, interestingly enough, the finance vertical. And my time there. I by Happen Cents, was put on this project, it's called Building the Next Generation treasury. That was a research project that was looking at how multinationals were forming international treasury centers, but forming treasury centers and in house banks to help centralize and facilitate their global treasury management, particularly on an international basis. I found it to be quite interesting. Interesting and continues to be fascinating. I always say that I come at this area a bit from a research advisory perspective and I have a lens that since I was never a practitioner, I've always been looking from the outside in, which gives me a different perspective on it than if you're in the job day to day, I think I appreciate greatly the practitioners that are in the job day to day. I spend a lot of time with them, talking with them to get their perspective of what that looks like. And from time to time I love to go to visit treasurers and their teams and spend time with them to actually get immersed in their day today. And I'm over to do that actually now again and looking forward to that. So maybe this is a call out if anyone's listening and wants to invite me. Yeah, happy to come and spend the day. But yeah, I really come at this from a non practitioner's perspective, which gives me an academic lens but also more of a theoretical lens on how to.

Explain what noise for the listenership. And then what I want to do is talk about the evolution of it because I've been doing treasury grooming 28 years and known you all my career. So it's. Yeah, as you say, you get together practitioners and things like that. Is that how it started or what happened with. At the beginning when it was.

Yeah. So when I first left the Economist group to form NOY Group, I started off, I had been part of their newsletter at the tail end of my career there. So when I started NOI Group, I built it around a newsletter called the International Treasurer. And with that, as is typical of newsletter business to business newsletter businesses, I built small seminars and roundtables, most importantly as an ancillary business stream. And I had always loved the roundtable experience of getting around the table with practitioners in a smaller group of anywhere from 10 to 25 or 30. And I just found that to be much more interesting than a conference because you actually got to engage with people, get to know them really well. And right around the 1999, 2000 period, I sell the writing on the wall that the subscription newsletter business was a giant one. And I came up with the idea to convert the subscription to the roundtables essentially and make those the product, the key product. We still do content around that, but it's really these roundtables that we call peer groups because we organize them around job roles, size of companies, sector of companies and the basic principle, you're trying to get true peers that share the same job curated peer group of.

So you have some industry streams, don't you? And then some size of company across thing as well. Why do you think that's important?

It's quite interesting, the evolution of it. The very first peer group that I started was in the tech sector. I had a lot of Good contacts in the treasury community in the tech sector. And so my first group was nicknamed the Tech20, was essentially the largest tech companies in the U.S. the Treasurers of those companies. And in the evolution of that group, more and more of them wanted to learn about what industrial companies were doing and what treasurers from other sectors were doing, particularly around debt issuance. And so that clued me into the fact that there was a lot of interest in benchmarking and learning about how treasurers in other industries particularly they were much more heavily debt financed, did things and a lot of cross learning from across the sector. Segmenting companies by size and a bit around complexity was a really good thing. You could also, as the network grew, I mean we grew from the original Tech Treasures group to some 30 plus groups now. And as the network continues to grow, there's many more opportunities to facilitate knowledge exchange across the groups. And when NEU group started it was constellation of different peer groups. They were organized again around job role, company size, sector. But over time we've taken advantage of the network and the growth of the network to connect people across. And that can help treasurers learn new things from outside the sphere of their company. Great thing about peer groups is you can talk with your team, your colleagues, but to get a real sense of new ideas and new innovation, it's good to reach out to get to know those guys. And not only in your sector, but across other sectors and increasingly across other countries as well.

So I started the podcast six and a half years ago. Pre Covid hybrid working wasn't a thing. Suddenly hybrid what remote. Then working from home. And so that change and shift post Covid we've then had immediately came out your blockchain. You had technology and now blockchain's gone. People don't really talk about. But now, oh, the rise of AI conversation and everything else. So going back to the beginning 30 years ago, if you would just a quick. Again, this is for the corporate treasurers listening. What have you seen evolve in the conversations? You're sitting, you've been sitting at those tables for 30 years. What were their worries 30 years ago versus in the middle and then now what are they? What's coming out without confidential info?

Yeah. Interesting, because there's two parts to it, Mike. I think one part is what I would dub the perennial issues around management and capital structure, capital allocation, that those topics have remained remarkably consistent over three decades. What's changed is the toolkit, the knowledge around how to do that, the technology and then obviously the global conditions, market conditions, rate environment, et cetera, that all changes the topics. There's one subset of topics that remain constant and you revisit them with these new contexts and perspective. So it's really quite interesting to think back to the prior discussion and then think back also 30 years to when this was discussed. And every once in a while I go into the archives and look up some of the old presentations and notes from the original meetings. And it reinforces that comment that things don't change dramatically from what treasurers are talking about, but the lens with which they view them does change. And that's what keeps this fresh and interesting, that there are these perennial issues and problems that treasurers have been trying to solve and grapple with for three decades plus now. And really one of the things that I really like to accomplish is help treasurers make a new leap by solving some of these issues. And probably the biggest thing you mentioned, AI, in combination with much better superior and workflow enabling technologies, are really taking out some of the more mundane transaction processing elements of treasury and allowing treasurers to spend more time going forward on more strategic business partnership type projects and really become a revenue or profit enabler through the business. And that's another kind of highlights a big change. And it's something that I've been thinking quite a bit about in the last year or so is back when I started this in the early 90s, there was this, there was these blow ups with derivative trades, Procter and Gamble and others, and tarnished this idea of treasury as a profit center because treasury was not a profit center and labeled or thought of more as a cost center. The resources that it had at its disposal were constrained because it wasn't earning profits. I think there's an opportunity to break out of that a bit. Not by being a profit center through financial trading or taking risks with corporate capital, but really working in partnership with the businesses to help them earn more revenue, more profit. As you said, cash is king. And I think there's a growing appreciation that cash is the truth. Free cash flow really tells you a lot about the company and maximizing the free cash flow that the businesses produce and getting them to have a cash mindset and understand that is something that the treasurers are well positioned to take the lead on.

And that's one of the things people are going for pay reviews at the moment. Because treasurers a lot of the time, they just do their jobs, keep their heads down. They don't really necessarily see where they can be a profit enabler, where they can actually help the companies save Cash and then they don't note it down. I've said, look, put that in your black book. So when you actually go to your boss for your pay review, okay, I've totaled up how much I've helped you save this year or helped you make, how I've increased the profits. Now I want my bonus. And that's a good way of doing it. You've got that one. And if you like treasurers in a way coming out of the corner office a little bit more into the mainstream, which I've certainly seen, I think there's.

Other perennial thought of treasury and treasures being in an ivory tower, of being in this specialist function which is fairly technical and few people outside of treasury necessarily understand what treasury is doing. And there's this ivory tower concept that is one part the nature of the job and I think one part a mindset that evolved in treasury and some treasurers where they maybe enjoyed being in this ivory tower. And I think that's forcibly changed. And there's a number of factors there. One is that we see this in large enterprises in particular, but also at growth companies at a certain stage where they're building treasury from a foundational level, maybe even a pre treasury company, they don't really have a treasurer. So different people in the finance organization are doing treasury activities. And I think we're seeing both at that level and at the large enterprise level that treasurers are not necessarily treasurers for their or in treasury for their whole career. I think that's changing increasingly to have treasurers being part of what I've called the strategic finance career path, where they're going through various key strategic finance roles on the road to becoming cfo. And it used to be there was tension between treasurers who wanted to be cfo, which was probably the minority and a much more difficult leap 30 years ago than it is today to people in treasury that are in the Treasurer's chair as part of their career path for maybe three, five years. But the plus side of it is they've been in more business partnership oriented roles before coming into Treasury. So they bring that mindset which I think really helps them become a revenue profit enabler and then ultimately help the businesses generate more free cash flow. I've always found that some of the best treasury functions or that have been great exporters of finance talent have been those that have created a career path where to become a senior leader in the treasury organization. You had to move out of treasury into a business finance role even to become at some of the early companies that did that, wandered away from that, but they're coming back to it. And I think more and more companies are coming around to the importance of that idea and be curious, like what you're seeing in terms of placements to treasurer roles and even their key direct reports how much experience in a business finance role is important to make that next run.

It's an interesting but great question. I think if I just take a typical treasury structure, if you like, so you've got treasury analyst, manager, you move up, obviously the pyramid gets narrower so there's only limited opportunities. And I think that's where some treasury professionals make a mistake. I was just talking to a treasurer past couple of days where actually they're going to go off into an FBA role because they want to get to a CFO role at one stage and they would go, if I just stay as a treasurer or a Treasury practitioner all the way through, I'm not going to get the CFO role. And I was like, yeah, you probably won't. Because I do see a number of companies now, some of them are bringing in, rightly or wrongly, you have your treasury team one step below the treasurer and they then, oh, hang on, we're now going to make that treasurer job a stopping off point to train our next CFOs. Actually, I think if you're a deputy treasurer and you're listening to this today, go and work somewhere else. Not different company, but go and work at a different part of the function. It's great if you work in treasury and you love it. But do be aware that if you want that number one CFO job, maybe you can't just have treasury, maybe go and work in tax or go and work in the commercial side of the business. You are a finance professional first, treasurer second, not the other way around. And I think that's where I've seen it. For you and I both, treasury is a passion. But actually when they say to me as a Treasury recruiter, what should I do? Don't stay in treasury all your life, go out of it and come back in and then you'll know more. He now says that 20 of his job, it used to be 100 of his job, now only 20% of his job in this new role is actually core corporate Treasury. The rest of it is corporate finance. He's working with different businesses across the affiliates, then corporate finance, then there's investor relations, then there's all this other projecting stuff, projects like technology and automation. We talked about that. Any other big shifts in treasury operations, any other things that you're seeing as many treasures in some ways as I am at my events and things. But you're getting these first hand one to one conversations with them sitting around the table. What are their when you're having that coffee or maybe something stronger later on in the evening, what are they saying? This is the challenge.

You mentioned one of those and that is the expanding scope of the role of many treasurers tends to not be discord treasury anymore. And with that the Treasurer may have treasury as not their biggest role spanning these different areas. There's a challenge there, but also an opportunity. The challenge is you're having to learn another area. Maybe it's tax, maybe it's investor relations, maybe it's FP and A and maybe it's looking after the global business services, taking on more of the APAR roles with payments. And each of those areas has a different kind of management challenge and talent needs. So it really compounds the complexity of the treasurer's role just from a management standpoint, people and process and systems. And so that gets to the opportunity of it. It does. We've seen a lot of change around collaboration with the other teams and looking at building common systems. FP&A is a great example. We're collaborating more closely if not having FP&A directly under the Treasurer. One cash forecasting model across treasury and FP&A and looking to reconcile the indirect versus the direct cash flow forecasting methods and also reconciling those and the balance sheet perspective versus the P and L perspective. There's also I think an opportunity. The other challenge of these rotational roles and the spanning of the different roles is if you're a treasurer in that position where you're just in the treasure chair for a finite period or you're spanning a bunch of non treasury verticals, your ability to really go as deep into treasury domain and knowledge is different. And so you're going to rely then on a Deputy Treasurer or Assistant Treasurer who's really strong in the technical knowledge of treasury to help keep things going. And that also puts an interesting challenge to the number two or to the deputy if they want to advance to the Treasurer's chair. How are they going to get the broader experience if they're relied upon to be the domain expert? Yeah, the treasury function. And I think the solution to that is probably going to come from technology and some of these AI tools that are really learning quickly how the technical details of treasury work. And maybe over time, probably quicker than we realize, the smart AI agents will become expert in these various technical areas of treasury that will make it easier for people to expand their scopes and rotate their knowledge base away from the technical details of treasury into these other areas and my view is that's going to further strengthen this idea of being business partners and the business is run still by people and it's a very people skills oriented focus that I think the future brings and it'll be really interesting to see how that evolves over the next five years because I think we'll probably see the scope expansion continue and probably go faster. The roles within the Treasury Department are also going to change and the balance between technical knowledge and these people software business partnering skills are going to elevate and it's going to be interesting how people in those roles adapt and we've seen this in the last five years. We've continued to expand our peer groups to more and more layers of the direct report under the treasurer and and one of the most interesting ones is the what we call.