How to Develop Competencies Within Treasury with Tor Stian Kjøllesdal

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.

For this week's show, delighted to be joined by Tor Styan Chalastal, the Vice President and Head of treasury and Tax Competence at Equinor. Now for those of you who don't know, Equinor is a international energy company formerly called Statoil. They have approximately 21,000 colleagues developing oil, gas, wind and solar energy over 30 countries worldwide, but the largest operator in Norway and one of the largest offshore operators and a growing force within renewables. Now we'll get Tor to explain that a little bit more later on in the show. Also he's got some interesting insights about how they approach competency within treasury, which I think is a great part of this episode. So I think you guys are going to enjoy it. But again we're going to go back enough of me talking to the beginning of Tor's career, but actually I've done my research and found out you actually had a start in football, which is fantastic. So football to treasury, maybe talk us through your early life, you do a tour. Over to you sir.

Thank you so much Mike and happy to join forward to the conversation. I had probably a bit not the most usual way of starting my career into treasury, but of course early in my days I was always interested in numbers and decided to take an education in business administration. And when I was doing that I was also playing football on a local level. But I was guilty to be selected to get a professional contract with one of the best teams in Norway and I of course jumped on that one. I hoped to have a good and long lasting career within football, but I was both injured and maybe did not play well enough to continue my career. And after two years of professional football I did not have a contract anymore. So I had to find a real job. So then being a guy from the Stavanger region, where Equinor at that point Statol has it head office, that was of course one key target for me to come into Equinor within a finance position. Bit randomly it turned into be a cash management treasury position that was at that point in time open in the external job market. So I applied. It was a good match that I found out afterwards that the hiring manager, he was a big football fan, so at least I was able to speak out from the Bunch of applications and at least got my spot in interviews where I could explain more about myself and that went quite well. So I got a position and my first position in Equinor was in the central payment unit, global team handling all the payments in the company. So that was my start within cash management. Was also a lot of people when I came in that was questioning, okay, football player coming in here. So I've always said that I think that was actually a benefit for me because the expectations were quite low because they thought that a football player could not do that well in Treasury. I'm not sure why, but that I think was some of the impressions around. But then I joined that team, worked there for a couple of years and then I was actually asked to head up the team. So that was my first move in the Ecuador organization and just, just jumping.

In that toy and it's an interesting one. So I'm mega keen rugby player and you know, sort of played rugby since I was 11 all the way through my life and things. And then people in the UK have a, you know, sometimes a very old school view of rugby players, you know, big drinking, I like a beer every now and then. But you know, the thing that I've done and I, you know, instilled in my son and I hope my other son does it and everything else. And my, my daughters, I love them. Team sport, you know, that's what it's about. It's not about, you know, whether or not we win or lose. It's, you know, standing shoulder to shoulder with those guys and that collaborative team and you know, when we have interest that you put in a CV and stuff and people say, oh, do I put. Yeah, if you've got those sporting things. Because it's, it makes such a heck of a difference I think on an interpersonal level. Did you think that maybe, you know, and again maybe falsely so football, they have a, you know, sort of a very narrow view of what it is. Or did you find that actually having been having the discipline to train and all those things, that's what helped you, would you say, at that early stage in your career?

Yeah, I think it was a great benefit and it's maybe a bit boring answer because many people say so, but it is true. Kind of being part of a team sports in your childhood and also when you grow up really is a benefit also moving into an organization which has a lot of the same things to focus on and in addition, as you also say, the way you are able to set up your own targets to try to achieve those and to do that together with others has been also for me a great experience that I have utilized in my working career.

Amazing. So you sort of that, that got you in, as you say, into your finance and treasury and they start. You started to grow that. So you started to draw on those skills. Talk us then through or come back in this or. I thought it was important to sort of reflect on that a little bit as well because I think you need to highlight it as well because it's a thing to be very proud of. So talk us through.

Yeah. When I came in, I did not have a clear plan of becoming a leader or growing quickly in the organization. In one way I think it happened, but it also, of course happened by the way I was working and what I delivered. And I also saw a great potential and an interest of being both a leader, but still working with treasury as a profession, which triggered me a lot. So I was very happy and keen to go on when I was asked to take up the leadership position for the team. Moving from being a colleague to leader was of course one of the big question marks for me. How will that work? I think that also went well. Again, utilizing both my personal skills, making sure that you build the necessary trust with people, that you communicate in an open and transparent way and that you care about people, and also utilizing your professional knowledge to be a good discussion partner, but not always give the answers. I think that's also an important balance to sometimes coach people to take their own decisions, even though you know the answer yourself. So I continued that role for three years. Then I was asked to take another challenge, which was to take one step further in the ranks and head off a bigger area where the Central Payment Unit was part of it. Now we also included accounts payable, accounts receivable, our internal bank operations and our back office activities for Treasury. So then I was starting to be leaders to leaders who run their own teams. That again creates a new dynamic. As a leader, you need to be even more focused on coaching. You need to make sure that you empower the leader below you to take their role and to grow and also accept and hope and encourage them to kind of come forward with more qualities and better decisions than you would have taken and not be afraid of hiring the best people also there to really challenge and to grow the function.

And when you were at that early stage in your leadership journey, if you like, and you then were then stepping up and leading a much bigger group of people and you're relatively young at that stage as well, and you might have had some good experiences and there'll be listeners today, you know, and I've reflected on a couple of times when you might have someone that's twice your age and you're their boss. And how did you then sort of get over that with people or, you know, what was your way of dealing with those guys and coaching them, would you say?

I was around 30 when I took that new challenge and I was an organization of 100 plus people in total. First of all, you need to trust your own skills and you need to go forward with who you are. And for me, the most important things to succeed was to create trust and spend time with the people, to be present and to be open for both feedback and also to be clear on the direction that you give. One of my benefits was that I already at that point in time had a very good understanding of the tasks and profession that we delivered. So that in itself was a good step of building that trust because people knew what I was talking about and they saw me as a good discussion partner in professional topics. So I think it is a bit different. If you had a team where you really know the delivery compared to having teams where you don't have the same understanding of the profession. Then you need to be even more focused on how you communicate, how you involve. But for me, the fact that I knew that the area very well helped a lot in taking the role.

And so then you continue to develop. Maybe again could you explain a bit more about the company itself. Statoil just again I know the group very well, but then we have a lot of listeners in the US might not know the group so much or maybe you could sort of just explain about who the group are and some of the diversity of it.

So Statl at the point back around 2010 was more or less a pure oil and gas company. A lot of high value transactions in and out from a Treasury perspective, big numbers. So it was important to have a sophisticated treasury set up. The people working in treasury in snapdragob before me were very innovative and had a lot of good ideas. We were front runners setting up in house bank modules with SAP back in the 90s. We had centralized treasury organization in place already early 2000 and really benefited from a global and centralized both system and process perspective. So we run the kind of the treasury function from Europe. We had two centers, one in Stavanger and one in Belgium. We also were always seen as frontrunners when it comes to technology and use cash management solutions as an example. One of my responsibilities was our internal bank which already at that point in time was very sophisticated and had most of the feature you will see in an internal bank. And of course from a Treasury perspective we have had a strong focus on risk management and manage our liquidity positions and the high value streams that are going through the company in a good manner.

Has there always been an ethos of the group, you know, that sort of that trying to lead and others follow? Because sometimes that can be quite hard work if you like. I've said sometimes that some treasurers and some treasury professionals are late adopters. You know, treasury management systems they say well actually no, we'll come around to that. Let let some of the other guys go off and you know, lead on that stuff and then they can make all their mistakes and then we'll just come in and do and copy them at a later stage or replicate what they've done but in half the time sort of thing. It sounds like though you guys were much more sort of leading edge. Why was that?

Yeah, I think there has been deliberate decisions that we see benefits of those new solutions and think that we are able to actually implement that and get the value of it. My next step after heading up the APAR payment area was to move to the corporate treasury function and be more strategic responsible for the whole cash management infrastructure. And one of the first steps we also jumped on there was to a full blown treasury and payment improvement project with the basis of an SAP S4 implementation. Also one of the early runners, but then also did a full blown process walkthrough and also implemented a lot of automation tools. Again not a straightforward project, bumpy road, but still putting us in a position that we could benefit from from later. And I think there has been people both before me and also that has been one of my triggers on getting motivation and engagement at work is to really explore new solutions and to always strive for the improvements that make an impact for the company and for the function as such.

And are you measured on that? Is that one of the things that sort of given your sporting career and things you want to always achieve and step up and step up. Is that one of the key things you would say?

Myself and also I think our organization has always been ambitious and when we put forward our performance goals, we try to put forward things that we think can create value for Equinor and make sure that we are enabled business and make sure that Equinor can do the things that they do. Treasury is of course here for the business and not the opposite. So that is also A nice angle.

Into it, talk us through then the developments of you and then maybe how the group evolved as well, if that's the right way to put it.

So taking the cash management responsibility from a functional perspective and a strategic perspective, we were well positioned to start on the ongoing Equinor energy transition. You know all that the world is changing, there's a lot of focus on renewable energy and oil and gas has a different kind of reputation now than before, even though that we see gas is coming more and more into play given the. The turmoil and the volatility in all markets lately. But again, by being proactive and being frontrunners in some area, we were again positioned well to kind of help the company starting on that journey. So the last years has been a lot of focus, as you also said in the introduction, around the renewables business. So we are becoming or we are an energy company. We have a lot of assets in offshore wind, we are developing solar and we are putting more and more our capex into that part of the business still also optimizing the oil and gas, making sure that we bring value from those assets. From a Treasury perspective, that was also important to adapt to. And my next move was to take a broad responsibility for what we call Necronor, the internal Treasury. So as such you can say that a regular corporate treasury scope, we split it in two. So we had one guy heading up the more external part, the capital markets part, and then I got the responsibility for the internal treasury part which is then the all the cash management work, but also all the subsidiary Treasury. So we have 200 plus subsidiaries which have to be managed from a Treasury perspective. Again we have centralized the management of also our subsidiaries when it comes to Treasury. So that was both an interesting and big scope. A lot of interesting countries around the world with different issues that we had to resolve. That in a way took my career and my challenge to a new level to be an extremely strategic partner to the CFO and his management team. Being part of the finance management team.

In Equinor, that's dynamic. That's probably the best word when you're pushing that out to different levels of competency based globally if you like. How do you approach each of those? So you might have one region that is very advanced and knows all this stuff and everything else, whereas you've got a tailor approach perhaps for someone that treasury isn't their first skill and they may struggle a little bit more. How have you tailored that or what have you. What sort of ways have you managed to manage that with Those different levels, very advanced. Actually guys are struggling a little bit. How have you tailored that, would you say?

First of all, I've used my organization and we have had an extremely competent and strong core treasury organization that has been around, that has handled in a way the different countries, the different dimension. So for me it has been to give those people working with me on our scope the empowerment to take the responsibility that we have been given to develop the solutions to run treasury the way we want. Of course, when you have organizations, people are very different. So for me has been very important to to accept those differences, focus on the different strengths that people have, treat everyone with the same respect and also try to spend time on people. In the role I had in the corporate area, of course the number of people were much more limited, so it was maybe around 10, 12 people. So then you also have more time to spend time with your people and get to know them even better, the full organization. But for me it is to build the necessary trust to empower your people and to be available and support when needed.

You and I had our pre podcast call and you've got a different way of people, you know, and leadership and you know and how you, you're going to run that. Can you perhaps explain how you approach that a little bit differently? If that's the right way to ask the question.

So I actually got a new role 1st of June last year following a reorganization in Equinor where we, Equinor as a company have decided to implement what we call this Competence centers for different functional areas. That means that we gather people with the same competence in the same units and then we allocate and assign people from those units to the tasks that we're going to solve. That means that I now head up the competence center for treasury and Tax. So first change for me was of course that I also now are working with Tax and we see integration with Tax and Treasury as very natural. In Equinor, a lot of common themes to focus on. And then my main counterpart, which is the head of treasury and Tax in Equinor, he will then utilize the resources that I have in my organization to deliver on the tasks. Many people will be assigned to a fixed task for a longer period. We also have people that can be assigned to short term tasks and also moved around. It is a big change and it is not straightforward. There are issues of course, to get used to that new model and make it work. That's kind of still an ongoing priority and I think we need to spend more time to make it Very good. But we are on a journey and it's a very interesting journey. And of course the main goal is to first increase the flexibility with our resources to assign people to the prioritized tasks to move quicker to respond to different business needs. So that's from in a way the company and the business perspective equally important or maybe even more important. This is also a new setup that should enable people development in a new way. You can get short term assignments you can rotate without changing your position in a more flexible way. You can get exposure to different areas within treasury and Tax in a short time frame. So we believe that this is a good step of taking the people development and also the overall competence focus which will become more and more important. We see that competencies are developing and changing from more basic traditional treasury competence, which is still the core and very important, more into new competencies as well. How to manage data, how to make sure that you can utilize technology in a good way and also different business competencies that you need to support the business in a, in a better way.

Can you make it real for us a little bit? You know, I know you and I discuss this, so I love it and I completely buy in. But maybe a practical example so some of the listeners, because it's so new to a lot of them listening today so they can either understand it or if you were a fresh person walking into the organization, maybe a junior person yourself 20 years ago, sort of coming in or 15 years ago, whatever. But how would you explain it to them or bring it to life if you like so that they understand. Because I love this idea. But you explained it well when we spoke before.

Well, I think it's a bit inspired by like consultancy house where you are hired into a consultancy company. Now you are hired in to treasury and Tax overall. Previously you would probably be hired into for instance working in the debt capital markets team or you will be working in the payment unit. Now you are hired in a Treasury and tax team. You get an assignment, can still get an assignment to be part of the debt capital market activities, but maybe there will be a period where we are not that active externally. Then you can in the meantime potentially join a project financing activity to explore your competencies and learn more about that. Then go back again to the next bond issues that we will do in the capital markets team. So that's one example that we. You have a common resource home and you also have two leaders. That's also a change because you have your resource leader that follow you up on your development, your competencies and your other practical issues and then you have a task leader that follow up the delivery in itself that also have both pros and cons to be open. That's something we try to work out. How can we make that most efficient? But Equinor has been clear and our CEO is also stating that the competence and their investment is an investment in our people and an investment to strengthen the focus on competence and people development.

So if you're a junior candidate or treasury analyst type level or something like that, again, I buy into this because I think it's a great way to. It's slightly frustrating as a recruiter because you want turnover because, you know, we, we want to recruit people and then come in and you know, some churn is good because it means we get to recruit more people for you. But actually I see this as a really amazing way to really engage your employees and them to have sort of an openness, if you like, about themselves, saying, well actually I'd like to get involved in this or more task force, I'd like to get involved in this. And, and it gives them that. And also you're opening it rather than saying, well, in two years time you will be doing this job. And this is, it's sort of throwing that up in the air and then seeing where the pieces land a little bit in some ways. Is that how you would describe it? What other benefits would you sort of see for other maybe listeners and organizations?

That's of course our objective. I guess I need to be. Be honest and say that we still have a way to go, but of course that to create the career paths with flexibility and opportunities kind of without going through the formal recruitment steps and change of positions before. The objective is that we should be able to move people around. We should be able to utilize the competence and capacity in a more efficient manner. But it is, as I said, a big change. So we still need to spend time on maturing. This. I also think the rationale behind it is I understand and it has a great potential if we succeed.

And what does success look like in that? You know, again, the way I want to describe this is that again, someone listening today goes, well, yeah, maybe I understand it. But you know what, what are the benefits? You know what, what's your end goal? What do you see with you guys and stuff? Again, I know the answer to this question is more for the listeners.

Yeah, you know, I think there are two dimensions. First of all, happy people that feel that they get development opportunities and are growing as professionals in equinor in treasury and Tax and then secondly strong treasury and tax deliveries by utilizing the competence in a better and more efficient way delivering what we need to do. So that was a short summary in the two dimensions that I think is important.

Love it. Looking at the future and sort of taking it away from yourself, as it were, and this great development for Equinor and everything else. But what would you say you're thinking about for the future? What are the challenges that are coming along, maybe to the company, maybe to you as a head of treasury and Tax, you know, what are you thinking about if you like and hopefully going to be discussing at conferences and those real life things and events in the future. But what are you thinking?

If I start from a company and energy perspective, it is of course going to be very interesting to see how quick and how far the energy transition journey will go. How will the 2030 targets be achieved if we look six, seven, eight years ahead? So that is the starting point and that also have to be the starting point for treasury and Tax on what we should do. I think on treasury specific, I've seen good development since I started back in 2005, so it's almost 17 years now. If I also go back, we do still quite a lot of the same things as we did in 2005. When will we see even more transformational changes on Treasury? If you go back, I've been part of quite many conferences these last years and there are always a lot of buzzwords, some have triggered in and some have not. How will that be? And I think now given the development of society, we really are eager to see an effect on kind of data, uses of data, artificial intelligence and again, many of the other of the nice passwords. How will they impact treasury and how will we utilize that in Ecuador? That is some of the key discussions we have internally. To be honest, we don't see the full picture. So we have been focusing on establishing a good foundation by having a good platform, good systems in place and also started with some nice improvements. But we need to develop that further. There has been also a lot of discussion around the treasury community. What are the roles of the banks in the future? How will infrastructure be carried out? But still maybe more question marks than answers on those most transformative things.

I can't remember if we actually did it on. I don't think we actually did it on the show, but I talked about this with a guest before that. They said, look, there's a lack of innovation in the banks. And I was like, oh right, wow, that's Quite a statement. We didn't actually say it on the episode but actually when he qualified it I really could understand. He said that the problem is with a lot of the banks is that they don't have, they struggle to get the talent in. What they do is they let a number of companies out there, payments companies and different groups sort of develop their own solutions and then when they find the one that wins, when one of those rises up above it, they've gone through all that hassle of setting themselves up or you know, doing that, they say, well, when there might be one or two founders, they said they just sweep in and they'll buy that competency, they'll buy that product because if it's working and it's proven and these people have gone through this, he said so it's not actually a lack of internal, it's a lack of internal innovation. But there is massive innovation out there. But he said also they're going to be winners and losers and also they de risk their balance sheet by not having it. You know, them having to go through all the heartache and hassle. Do you see that yourself? Is that something you've noticed from some of your banking guys that you noticed or have you not seen that so much? What's your thoughts?

Yeah, I think we see development on the business model side but still banks are still the key point for us and relationship with banks are a key element in a Treasury position. I think if you go back five, six years, some would expect the fintechs and the alternative solutions to have a much bigger space now than they have. But I think what they face is that the complexity in this business is so big that it's almost impossible to build up big scale companies from scratch. So you need to partner. I think the banks also do the right things to partner and utilize both technology and competencies from different parts. So there is a lot of good development. I think it's fair to say that the banking industry has developed more on the, on the personal banking side than on the, at least on the big corporate side. KYC is one of the main obstacles of running efficient banking for us. So it is still room for improvement to increase the speed and quality between big corporates and banks. And that's also one of our focus areas.

And you mentioned there, you know, just earlier about yourself and where you as a treasurer, you know, see this development, obviously you're leading this with the competency framework and which again focus on people development and competence and the sort of the skills versus you know, the tasks And I just love this idea, even though it's working me out of a job, but keep going and people love it and things. But just on those, you know, anything for you that you think, yeah, this is what people need to be thinking about as we develop and grow Treasury.

Again, for my perspective and for the role and for Equinox Treasury. First of all, we need to make the new model work and improve it day by day. But of course, most importantly is that we need to make sure that independent of the model, we need to deliver high quality treasury activities. So that will be still the key focus areas both for me and the treasury organization. We have a very good starting point. We have extremely competent people, great organization and are set for the future. So I'm keen to see also the external development, how they will impact us. But I think we should be ready for, for most of it, excellent stuff.

Well, we'll put your details, your LinkedIn details in the show Notes tour and it's been. And it would be amazing. And you know, you and I talked a lot about this and that key thing about the way that you guys are approaching Treasuries move into the future. Any final closing words? You know, someone's listening today and they're thinking, you know, well, number one, they'll want to connect with you. I know, because this would be great to have you in the network and everything else and great about the growth, you, you as a person. I think that's fantastic. But any final words of advice to the listeners today about what they should be doing? They want to have a career like yourself. What would you say to them?

Yeah, no, I can, first of all, I can highly recommend the career within Treasury. That has been great fun for me. I think most important for me has been just focusing on every day to deliver good results and to work good with your colleagues and your people, build trust with the people around you. That has been key for me. And really utilize all the competence that your colleagues and leaders have to put a joint force together to develop and impact deliveries from a Treasury perspective.

Amazing. Thank you, sir. Thank you for your time today and I know you're incredibly busy, so I really appreciate the lessons you've shared with everyone there and look forward to as always, seeing you soon in the real world and hopefully a conference not too long from now and visiting your beautiful country. So look forward to it, sir. Thank you for your time.

Thank you.

Thank you, sir.

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 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 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. It'd 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.