How to Become a Strategic Treasurer with Stephanie O'Leary

Foreign.

Welcome to this week's Treasury Career Corner podcast where I interview treasury professionals.

About their treasury careers.

Each and every week I talk to them 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.

This week's show delighting to be joined by Stephanie o' Leary, the former Vice President, treasury and Risk Management at Indigo ag. Now, Stephanie was the first treasurer for this unicorn AG tech startup. She built the global treasury and risk management function actually. But before that she had 13 years of Wellington Management within, where we promoted up to managing director and treasurer. And as always in each show, you don't want to hear me, you want to hear from Stephanie and that's what I want to do in the show. So I'm going to go right back to the very beginning. I'll then interrupt as we go along. But she's got some really great insight insights to share with you our listeners today and love you guys listening to the show. So anyway, Stephanie, talk us through how you first discovered the world of finance and then treasury over to you as always.

Thanks, Mike, and thanks for having me on the show today. I first really discovered the finance aspect when I was in college. I was an English major undergrad, but I took accounting and economics courses during my junior and senior year. And at that time you're sort of figuring out what do you want to do with your life and your career. And people said go to law school, become a dentist. Somebody said to me, you should go to business school. And that one really stuck with me. And so leaving undergrad, I knew that I wanted to pursue a career in business and I knew that I was going to go back to school to get an mba. But I was fortunate enough to get a job as a bank examiner for the fdic leaving school. And at the time banks had been under severe stress and the FDIC was very backlogged in terms of doing exams. And so they hired large classes of new examiners right out of undergrad. And I spent three years doing that before I went back to school to pursue an mba. And at that time treasury was not really on my radar. I continued to do other work as a consultant in the financial services area. And then I was a CFO for a startup division within AIG where I that was my first real exposure to treasury because I was working with the treasury team at the larger corporate entity to understand the cash needs for my particular division. So I spent three years building out that division and then I finally made it to treasury at Wellington Management.

And Stephanie, before we jump into that, because I think it's interesting as well, because it sort of, that was your sort of foundation, if you like, can you just. Again, I know the group aig, but some of the listeners might be new to them because I think that then provides you with a lot of the strands for your treasury career. So can you perhaps explain who AIG are and the sort of role you did there, if you like?

Sure. AIG is a large publicly owned insurance company. They span all different types of lines of insurance. And the division that I was working in was part of the property and casualty division. So specifically it was property casualty insurance for high net worth individuals. So it was a startup division within aig. They had hired some executives from another insurance company to come over and build this group. And I began helping them in my consultant capacity and then was asked to come on as their first CFO for the division. So really building out the finance function from start to finish, including how do you set up billing, how do you hire staff, how are we going to record all of this in the accounting books and what cash needs will the company have, what systems do we need to manage our policies and so on.

And from that, so you built out this great start in finance and as a CFO and things like that, what then attracted you to Treasury? How did you hear about that and think, oh, actually, had you already encountered some treasury where you were AIG or what was the situation?

Certainly working at AIG as a startup division, we had a lot of cash needs and we're not yet producing a lot of cash because we were in startup mode. And so I worked really closely with the treasurer of the private lines division to project our cash needs. And for us at the time, that would have consisted largely of employee salaries and rent and things like that. And so really making sure that I was able to share with her the growth of our unit as we brought people on to be hired so that we would have cash when we needed it. And that also entailed doing budgeting. Right. So for this was zero based budgeting. There was no baseline to start with. I couldn't do a 10% growth over last year. And so I was forced to really get down to the nuts and bolts of timing of when we were hiring people and when we expected revenue projections to start coming and converting to cash.

And so then the move to Wellington. So if you maybe just give us an idea of who Wellington are and what they do and then the Treasury Department there, because you were there for 13 years. Very lucky for you. Great, great career there. So talk us through.

Sure. So AIG was in New York and I was looking to relocate out of New York and come back to Boston at the time. So Wellington is located in Boston. It is a large institutional asset manager. It has more than a trillion dollars of assets under management right now and it is a privately owned partnership. So I was interviewing for Wellington Management and they decided that they were going to interview a pool of candidates, pick the best three candidates and then match them to the jobs that were available. And so at the end of the interview process, they offered me a job and I said, that's terrific. I really am interested in the treasury role. That one is the most interesting to me of the three that are available. And so that was my first introduction to treasury, my first true treasury focused job, fully treasury focused job.

What was it treasury that was like your. Oh yeah, that's my calling, you know, versus the others. Why did you even at that early stage say, oh, Treasury's?

For me, I think a couple of things relative to the other jobs, it seemed to me the treasury job was more interesting. Thinking about the future, thinking about debt facilities, thinking about capital structuring, thinking about cash management. The other jobs probably had a larger accounting and revenue focus to them. And so I felt I had a pretty strong background in looking at some of those things, particularly the cash forecasting aspects coming from my role at aig.

And so you started as the treasury manager there. What was the sort of shape of Treasury? You know, this is back in 2003. I was talking to a client the other day who, you know, sort of, I've done this 25 years and he'd done it a bit longer as well. And we were talking about manual things like faxes and, you know, back in the day and stuff. What was the state of treasury like when you first started?

I think that's right. So my treasury team at the time was me plus one other person. So very small, extremely manual. We would print out a hundred page report from the bank every day and then translate that into a spreadsheet that we could use to actually manage cash. So there was very little in the way of technology platforms. Treasury management systems really didn't exist. FX platforms didn't really exist. Investment portals didn't really exist. And the bank portals were fairly basic in the functionality that they were providing. And so I think that was sort of the state of things. And you know, my job, my challenge was to figure out over time how do we improve all of those things. And of course, you know, we needed to grow the department in order to be able to support the growth of the company in order to be able to support implementation of the technology that would come.

You know, it's an interesting one there you sort of say about how rudimentary in a way treasury was, 100 page report, the printing out of that and everything else. Did you foresee way back then that how treasury, you know, 16 or 13 years in that role, but from then to when you, you know, as, as you grew the position was that your sort of driver that you thought actually this can be more interesting, we can encompass this stuff. It was all, a lot of it was all brand new stuff to, you know, when I was hiring people, recruiting people for my clients who were hiring, they were saying, oh, we want someone that's done a Treasury management system. And people like what, what's that? You know, sort of. And well, it's not just Excel. Did you start to see that yourself from, you know, when you were there in Treasury?

I did, but probably took a little bit of time. So when I joined the treasury team, I learned about getting a certified treasury professional credential. And, and so within six months of joining I had gone out and gotten the credential. And then I started to attend conferences and webinars and started to learn about investment portals or treasury workstations and the technology that other people were using to automate. And so it was a learning curve for sure. We had many things as a growing organization, many things we needed to get through and get done before we were ready and had the resources available to implement technology. And as often happens in finance organizations, the accounting system typically gets the most resources, the most time and effort, the most budgets. And then the treasury workstations and treasury technology are sort of add ons like after the fact. Well, we're going to do the GL first and then we'll get to the Treasury. And so we were in some ways waiting for the upgrades to the accounting system and then we were work on upgrades for the treasury. And so we did put in a Treasury workstation, we did put in a, an FX hedging tool. We went to Goldman Sachs to use their investment portal and we, we stopped printing out 100 page report and translating it into Excel. We automated, once we had a Treasury workstation, we were able to automate the accounting. And so some of the manual processes were automated away and some continued. And I think that's always the case in Treasury. You know, you need to have enough volume of something before it makes sense to automate it versus maintaining it on the spreadsheet.

What's your treasury ethos? What I mean by that is, you know, some people have a natural curiosity and I think that's a word I've heard a heck of a lot from lots and lots of different treasurers. But what I mean by is, you know, you're reporting into the cfo, your reason for being there is to actually sort of produce de risk it, you know, to look after the company's money and everything else. And then you're trying to sort of elevate the position of Treasury. Did you throughout that time, you know, sort of always think, right, this is what we've got to deliver, guys, you know, this is what we've got to do. Or what was your treasury ethos, if you like, what's your thoughts?

First and foremost, you've got to manage the cash and the FX and some of those other things. Like those are sort of table stakes and you need to have a very well controlled process and that and an environment of control and a mentality of control. And then once that is taken care of, you can begin to think about the more strategic aspects of the role. What are the latest investment opportunities and how can we take advantage of those through the policies that we have? What's the right capital structure and capital, you know, what mix of debt and equity are we looking at? How can we work with our bankers to implement a cash pooling initiative? How can we work with our partners, tax and legal, to put in place stronger intercompany agreements or tax agreements that will make better sense for the company as we continue to evolve in our structure. And so I think there's sort of this sense of having a strong foundation in place and then being strategic on top of that. And I often use an analogy about driving a car. Treasury done well, is sort of like you're driving the car, looking out the front window, anticipating what's coming ahead of you and, and making sure that you avoid the potholes by managing risk appropriately. Many other functions are probably different. Accounting is probably looking a little bit more in the rearview mirror. They're recording what has already happened and making management reports to enable future decision making. And so I like to think about treasury as having a really strategic perch to the entire company because everything eventually comes through cash and, and you have the opportunity to see what is happening in the company or what is not happening in the company. That should be happening because you'll see it come through cash ideal and maybe.

Can you just explain a bit more about Wellington Group before we move on to your most recent role, the Wellington Group and the role of treasury in there, if that's the right way, because it's a massive global group. Now some people we talk to, they're a company with maybe very product centric or very service centric or things like that. What was the role of treasury at Wellington? Management, as it were.

Sure. So Wellington had a corporate treasury and then it also had investment operations. And so my role was purely dealing with corporate treasury. So the revenues that we were receiving from management of other people's money and obviously all of the expenses that the company would have to pay, the cash that was being sent to us to be invested was handled by our investment operations team. By design and by regulation. SEC very much frowned upon my team receiving and touching any money that would have been money intended for investment activities. In fact, to report it. There was an escalation process and so on. So my role was focused on making sure the corporate aspects of the firm were being managed.

Segregated cash and you know, is paramount obviously and everything else. You then you grew that position. How did you get that progression, if you like. So you started there as treasury manager in 03. You were the global treasurer six years later. Wow, congrats. And how did you do it?

I think one was just curiosity. You know, I would talk to a lot of bankers, I would go to conferences and I would continuously ask questions. And a lot of times people would come and pitch me things to buy and I would often say to them that doesn't make sense. I don't think that interest rates are going to rise. And so buying an interest rate hedge product isn't going to work. Or tell me more about this particular investment opportunity or tell me how you're seeing other people structure their debt, you know, what standard in the market. And so being curious and asking a lot of questions, I think also asking for more projects, raising my hand for things. So for example, when I first took over the treasury role, insurance was sitting in a different department. And I said to the CFO at the time, I have insurance background from my work at aig. I'm very interested. Can I help work on the insurance program? And they said, not only can you help work on it, you can own it. And so it eventually transitioned over to my team and there are some other projects like that. We had a large restructuring project, corporate restructuring. And so I raised my hand to say, somebody needs to lead this initiative from a finance perspective. Let me help with that. I think that helped.

That helps, but it doesn't get you the top job. What did you do differently or what did you do?

I think being able to envision a strategy for what the department should look like and then execute on it. So delivering what you say you're going to deliver was a large part of that. I think becoming a subject matter expert in treasury was part of that. And I think advocating for myself and asking for those opportunities.

You were there as the treasurer for seven years and then more recently, as you called it, you joined Indigo Ag. Can you explain who Indigo are?

Sure. Indigo is an ag tech startup, so it's in the agronomy space. They were founded as a company that was putting probiotic coatings on seeds to make those seeds more resistant to stress in the environment, whether that is heat, water, et cetera. And the idea being that you would need less water, less pesticides, less costly inputs to maintain those crops, and also that you should have a higher yielding crop production. It eventually transitioned to become more of a technology platform, matching buyers and sellers of grain so that they could get a better price or get a product that was more closely aligned to the qualities that they were looking for. And then a transportation company that would use excess capacity in the, in the agricultural transport space to match buyers and people who needed goods, move with people who had goods to move, and then more recently into the carbon space. So paying farmers to sequester carbon in their farmland and then selling carbon credits. And so over the time I was there, the company really transitioned and really pivoted across all of those different things with the goal of really disrupting the entire supply chain within the agricultural space.

It's an interesting transition, if you like. So you've gone from investment management to agtech. You know, obviously, you know, sometimes I get calls more from HR people, so, oh, have you got someone that's worked in our space, you know, maybe just worked in natural biofuels or something like that. You're like, hang on, it's Treasury. You can make a move between these different industries. But it sounds like a sort of an interesting move between investment management to this industry. What was it that, how did that work? If you like, was it treasury is treasury, would you say?

I think that's right. In some ways, treasury is Treasury. And for them, they did not have any Treasury Department at all. So they had people who were responsible for managing cash and people who were sort of responsible for bank accounts. But they really needed someone to come in and envision what the structure should look like and then build that out. And during the course of the time I was there, they had significant global expansion. And that just creates more challenges in terms of cash management and bank account structuring and cash pooling, et cetera, and the other things that they needed a lot of help with. Trying to get debt as a startup company with minimal credit history and minimal collateral, that's a really challenging thing to do. And then insurance, as they moved into all of these different areas of business, it required new insurance policies to mitigate those risks. And when you're in a startup company, sort of every loss could be your last loss if it's large enough, because that's just the state of your financials. And so it was really important to build out an insurance program that matched. Matched the risks that the company was taking on through the different pivotings that it was making.

Although, you know, in terms of, you know, size three and a half billion, so it's dollars, that is, you know, I mean that it's a pretty hefty group, so concentrates the mind. But also it's not, you know, when you talk, sometimes when you're talking startup, you're talking not that number of decimal places, you know, with yourself, that that's a pretty. It's a pretty hefty role. So what, what was it like for you when you got in there? It's a startup. Was there a Treasury before it was a complete startup from scratch? Right, guys, this is what we need to do or what was the situation when you joined?

Yep, the situation when I joined was up. There was an accounting team, a small accounting team, and those folks had been tasked with doing the treasury activities and they recognized that they needed someone who was a professional treasurer to come in and help them. Largely, they were looking for a debt facility. So they needed someone who has had experience structuring debt facilities and then also putting in place cash management, foreign exchange and some of those other things that they needed, as well as investment management. And someone who was really going to pay attention to that. I would say for the accounting team, it wasn't their first priority. And so someone who had the expertise and the time and was dedicated to working on those things. And you're right, it was a company that had raised a lot of money in equity raises and needed someone to be thinking about how we're going to spend that money. What is, you know, what's the forecast doing cash forecasting became incredibly important for the company. And how much Runway do we have as a company that was not yet profitable?

Yeah.

And looking at that and that's a nice segue, though. Stephanie, thank you very much. You know, looking at that, those sort of future challenges, if you like, and, you know, talking to and the treasury professionals listening today, I sometimes refer to the fact that CFO might use you as the sort of the scout, if you like, and looking at new tech and the new ways of maybe cash forecasting and the future, what are you seeing as the challenges for treasury going forward? What were you experiencing in your time there that you're like, wow, this is going to be something people need to be thinking about, is it? Sometimes people have said about cyber fraud, people have said about, you know, it's about cash, cash, cash. What was your key ethos? What were the challenges you were not keeping you awake at night, but that you were having to be aware of on a, on a regular basis, would you say?

I think one was the continuing globalization of the company, which presented challenges in terms of setting up bank accounts, meeting the requirements for those countries. I think people tend to be a little bit myopic and may think every banking system works the way the US system works, or maybe some of the European banking systems work. And outside of those areas, banking works very differently. And so understanding that, understanding the nuances of each country and putting processes in place to operate in those environments, that becomes more challenging. Also, as you're dealing with time zone differences, to make sure that you are able to execute the trades that you need, talk to the people that you need to talk to. And Covid added sort of another layer of challenge that, which is, how do you get people to sign the paperwork and get it to the right place? Because they don't accept DocuSign, they want wet signatures in some places. So all of those things, I think became more challenging, I think particularly for Indigo, because the business model was fluctuating, it was more challenging to project cash flows. But as a company that was, as I said, burning through cash, there was certainly a need to be on top of that and to project that with as much accuracy as possible, because you need to begin an equity raise well before that, well before the date in which you're going to run out of cash. And so we spent a lot of time working on that. And then getting debt for a company that has little collateral and no track record for credit is nearly impossible. And so it took a long time to innovate through that process and find partners and a product that would work. And in our case, we were able to use the intellectual property that we had, which are largely patents regarding our seed Technology and use both the patents and insurance policy as the collateral for a loan that was given to us by a pension fund. And I would say that was certainly a challenge. It took us, you know, we thought it would take a few months. It probably took us closer to a year, year and a half to get that done because it was new. It was the first time anyone had done anything of that size in the market. And it took a lot of convincing to get insurance companies on board, to get a lender on board, and then to work through all of the terms for putting that product together.

Yeah. And more recently, you've left the group. What are you looking at for the future, do you think, is the future challenges for you that you're thinking about for yourself, for Treasury? What are you excited about?

If you like, sure. So, for me, my next role, I'm hoping to return back to the asset management space or the larger financial services space, banking, insurance, fintech. And my goal is to get a job as a cfo. I think given the background in treasury, you have this amazing view of how everything in the finance organization comes together because you need to be looking ahead for all of the risks and planning for all of those things. And so that is certainly something that I'm looking forward to. I've also been considering treasurer roles at larger public companies that are much bigger than Indigo or even Wellington in terms of size of the Treasury Department, size of their global operations and complexity within Treasury. I think in terms of what I see ahead for treasury, more technology for sure. Right. AI will help with cash forecasting, APIs will help with sharing of data, less manual, all of those things are happening and then more global. I think most companies today, every company that I talk to is looking to go global and looking for people who have experience working across different geographies and then more strategic. Right. This view of how do we make sure that we have a very clear view in the windshield?

And sometimes I ask, and I'm not going to ask this, but, you know, I would say, look, you could filter out a lot of the stuff that's coming towards you. As a treasurer, I'm more interested actually in the people aspects and, you know, in some of the. What you've looked for when you've recruited people or, you know, what you think is important about the people side of things. And I don't often go like that because this is a podcast hosted by the treasury recruitment company. Had it recently. I was at conference and I actually had it physically at a conference a couple of years ago. Someone Says, oh, please avoid talking recruitment, recruitment. And I do, you know, I try to deliberately, because I don't want it just to be focused on that. But I think it's interesting you and I had spoken, Stephanie, about some of the people aspects of things. What do you think is, you know, if you're a listener today and you're looking again later on, we were not now, but, you know, shortly we'll get to putting your LinkedIn details in the show notes. But if someone's looking at your profile and goes, oh, do you know what? I want to. I want to be like Stephanie. I want to have a Treasury career like Stephanie. What recommendations would you make to those people listening today that they should think about or, you know, within team wise and people wise, if you know.

Sure. I think one thing I look for when I'm recruiting is someone who has a lot of curiosity, someone who's interested to understand the why behind what we do in Treasury. I look for people who are detail oriented. I think, you know, literally, treasury is a place where we count the pennies and while that is not the most glamorous aspect of the job, it is really important. If you add an extra zero, that becomes, you know, that's problematic. I think people who are willing to do what it takes to get the job done. Some Excel skills are necessary in treasury and I think, as I said, there are systems in place at most companies, but you'll never get away from Excel and Treasury and then someone who is able to look at things and say, I can make this better, we can automate this, we can put some shortcuts in this process to alleviate this, we can restructure the bank accounts in this way. Like someone who is engaged in working through and making improvements. Yeah. For treasury, most of our jobs require a Bachelor's degree. MBAs are not necessary, but helpful and certified treasury professional credentials are helpful, but also not required.

And why do you say that? You know, CTP is a great thing and, oh, no, I want a CTP for someone and I know it's a rubber stamp a lot of the time, you know, of your sort of experience, if you like, and gives you that sort of, that benchmark if you like. But why else do you think that's important?

I think it shows that it demonstrates that you're curious because you have taken that step to do self study and to engage with other people in the industry and to do the continuing education credits and stay abreast of what's latest and greatest going on in the treasury industry. So to Me it's further. It's a demonstration of the curiosity of your willingness to make improvements and learn new things.

Love that answer. That'll be featured after the show and things and I mean you've touched on this I think a little bit throughout the show as we talked about it. But as we come to the end of today's show, if we put in your LinkedIn details in the show notes and people can then connect to you if they think it's right to have you with the network and everything else and vice versa for you. What sort of as you reflect, what are the top tips you would give? And that might be someone early stages of their career. We've covered the curiosity piece so that's a big tick and I think that I hear that very often and things. But what other things do you think we've got? You know, maybe do study or whatever. But what are the top things you would say? Actually someone you're sitting with a coffee, they're early stage of their career, you're with them in the coffee shop and they're saying, oh crumbs, how do, how do I become like you? What recommendations would you give them? Would you say?

I guess like a couple of things. One is work hard and take ownership of the projects that you're given and the opportunities that you're given. Raise your hand and ask for new opportunities. Let your boss know what you're interested in and hopefully you get the opportunity to work on some of those projects which will ultimately help you as you look to get promoted. I think be a good listener, understand what the problem is so that you can help come up with the best solution as much as possible. Become a subject matter expert in your field so that you are regarded as someone who is the go to person for treasury activities or treasury knowledge.

Stephanie I just wanted to quiz drill down on just one aspect of your answers there and you talked about, you know, be the go to person for your boss. Put your hand up and say now and again the reason I want to explore this, we'll have listeners who perhaps that's not their natural default setting. You know, they're going to perhaps, you know, struggle with that or have nerves about that. I'll say, well, crumbs, how do I just, you know, without sound like, oh, I'll do that, I'll do that and you know, not wanting to put your head up all the time and just be overloaded. How do you balance that or how do you sort of manage that relationship, would you say?

I would say there are Almost no bosses out there who are going to be upset if someone comes to them and says, I'm raising my hand and I would like to help do something different or do more work or help to solve a problem. My bosses welcome that because their plates too are quite full. And in order to obviously get the opportunity to work on that new project, you need to have a great job with whatever is your current mandate of work. That's sort of a given.

I love that. Yeah, just sort of reaching out and sort of being open to it, if you like. I think that's half the battle, really, isn't it?

I think that's right.

Amazing. Stephanie, thank you for your time today. We're going to put your LinkedIn detail in the show notes so people can connect to you if it's right. And, you know, it'd be great to expand the network, but obviously do reach out Stephanie, she's a lovely lady. We've had this call a couple of times. So, you know, thank you for your time today. I think it's really, you know, there'll be some great takeaways for people and look forward to, as I say, each week recently and I can't wait to see you in real life one day soon.

Sounds great. Thank you so much, Mike.

Pleasure. Thanks very much.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen, whether that's itunes, Spotify, or another great place to listen.

To the show from.

It's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there, you could even leave a quick review. Reviews and ratings are among the most important, important metrics for a podcast to effectively rank. And as you can probably appreciate, the podcast is a lot of hard work to produce every week that be amazing, just take, say, 20 seconds, leave a quick review of my amazing guests and their great career stories.

We'd really appreciate it.

Thanks very much and I can't wait to see you soon.