Investing in People in Treasury with Gavin Waugh

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've built 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, delighted to be joined by Gavin Wall, the SVP treasurer, Risk management and Corporate development at the Wendy's company. Wendy's, for those of you I think you're all going to know, is an American fast food restaurant chain founded by Dave Thomas way back in 1969 in Columbus, Ohio, best known for square hamburgers and fast food snacks. We're going to go through that a little bit, but it's more about Gavin and his career journey within treasury, which has been illustrious to say the least. But we're going to go right back to the beginning as we do each and every week. Gavin, take us back to the beginning, if you would. And particularly, obviously, you're South African and you know that we're going to start off there. So take us back, sir, back to you.

Well, firstly, thanks for having me on, Mike. I appreciate the time and pleasure, sir. You've already inspired that. I grew up in South Africa and I did my undergrad actually in South Africa in business and economics there. So you could say that I had an interest early on in finance and in the markets. And I actually, it's going to seem like a very nerdy statement, but I recall going back when I was a teenager, I would buy the Economist magazine every week and kind of devour that. So I kind of always had an interest in the markets and current affairs and those types of things. And when I came to the States and, you know, when I was 25, when I came to the States, it was a very long time ago. Unfortunately, I actually ended up in accounting at a small company in Atlanta, Georgia. It was a temp to perm position that they ultimately hired me full time. You know, at that time, Mike, I have to say, I just, I was a new immigrant, just needed a job, so I kind of fell into accounting. I guess my finance degree kind of got me in the door, but I never really loved that part of finance, to be, to be perfectly honest. You know, and I saw that the company I was working for at the time was growing like really fast through acquisition, thousands of percent a year. It was actually insane. And there was really nobody looking after the bank accounts or any of the treasury stuff as they were going through all this M and A. So I knocked on the CFO's door one day and I said, hey, how about I take care of that for you? Is that something that you think I could do? And at the time, I didn't have really any idea of what that meant, but I was kind of somehow drawn to that. So luckily, the CFO said yes and created a Treasury position for me, and that was really kind of the spark that led to the rest of my career.

And as you said, you walked in and you were fresh to treasury and treasury was fresh to the group as well. How did you approach that? You knew the company, you'd been there, what, a couple of years by then, or.

I actually hadn't been there very long. Like I said, the company was growing really fast and it became obvious to me that the wheels were going to come off the bus on the treasury side if. If somebody didn't sort of step in and try to manage that more effectively. And again, I was sort of drawn to that instinctively, and luckily I was given the opportunity and for the next couple of years, I actually managed all of the treasury operations for the company and all of the acquisitions. That kind of taught me quite a lot of that time.

And then you did that role. You're fresh to treasury, done this. When I've talked to people that have been in private equity firms and various other backgrounds, I made this joke many years ago with Julie, and she worked for a number of private equity. I said, well, once you've got the cash sorted, that's it, you're done. Isn't it great? You know, now, we then laughed about it because we did it on the podcast, because, yeah, the cash was great. Once she sorted out the position, visibility, she could then do all the other interesting stuff, as she called it, in Treasury. You came in, you were doing that sort of similar thing. What. What then happened, if you like, and how did you grow your career from there?

You know, it's an interesting thing because it's been kind of a journey, I would say. If you look back 25 years ago, and I got started in treasury back at that company, I'd say that it was probably. It was very tactical, very transactional company, and you just needed somebody to take care of the cash, bank accounts, make sure the cash was in the payroll account on the day that payroll was being paid, those kinds of things. And, you know, paying dividends and things like financing the business, obviously was part of that as well. I would say that those things were very, for me, very transactional. Treasury. But over the last 25 years, I'd say that it's become a lot more than that. Treasury has always been an important part of finance, but I wouldn't say that it was a leadership position 25 years ago. And I think it's become kind of a leadership position over that time.

And so you've obviously spent most of your career within, not split. But I was making some notes looking back within food services and you know, a lot of those businesses are very franchise based type businesses. And I was interested to explore maybe from a Treasury perspective, you've got two different pressure areas if you like. You're obviously with the food side of the commodities and lots of the raw goods and everything else. And then the flip side or the other side is the franchise and how that maybe comes into treasury. And I don't want to get into confidential information. What I'm asking is for you as a treasurer, that great diverse challenges. What's it been like for you as you've grown your career and then associate that with your treasury side of things? What's it been like? Talk us through.

Yeah, and it's interesting you bring up the franchise business model. It's a very unique business model that it's harder than most people think. It's a good business model. It's a great business model. Actually. We have a lot of great franchisees. I've worked for a number of different restaurant brands. It's a great model, but it does introduce complexity into the system. And treasury folks usually work for the franchisor and we don't do the cash management typically for franchisees. But over time we obviously support them from a number of different areas. And over time I think the role that we play supporting the franchise system is evolving and they are now becoming more examples of areas where in the past that wasn't something that we would help franchisees with, but is now becoming something that we can add value to them and they're asking us to do so. I think that will continue to evolve. We're never going to step in into their shoes and sort of manage their finances, if you will. But there are programs that you can develop and think about in ways that they can help them with their economic model. For instance, negotiating on their behalf. And that's something that you talk about supply chain. That's something that the organization has always done, but now we're doing it for things like insurance. And we all need insurance. Why couldn't we negotiate that sort of more holistically than each person or each franchisee doing that individually? So I think we just Scratched the surface on what we might be able to do to help the franchisees over time. So that makes it exciting because it's become a growth industry within the franchise business model.

Throws up a challenge in a way, Kevin, because so we recently recruited for a capital management company in the uk, but they were global company and things talking to the CFO and he said, look, what we'd also like to do is help some of our businesses. Now, they're not their businesses, they have an interest in it and they've got that similar to a franchise type model that you've got an interest and you want those guys to be successful. The more money they make, the more money you are the center make, the more successful they are. More successful they are, you know, it's a sort of nice virtuous circle. And he said, whoever we get in, in treasury and we places these people in there are then going to help some of those. But they've got to sort of do it slightly hands off if you like, not too hands on because it's not their business per se. How do you look at it? Because again, when I talked to the cfo, he said, well, that bank negotiation, that was the thing that they could offer to theirs. And I don't, again, I don't want to get into confidential more. As you as a treasurer, how are you doing? Are you giving consultancy type advice or what's the way you've structured it? If you just put your hand up and say, guys, when you've got a problem, call me, or how do you do without your entire day being taken up by being Mr. Helpful Treasurer?

You know, I'd say it's really about adding value to the system. Obviously franchisees are independent business operators. They make their own independent business decisions. There's some things that are mandated across the brand for consistency purposes, like in the logo that's on the door and some food preparation procedures and things like that. But for the most part they are independent business operators and we want them to be there. The question really becomes dope. Can you offer them to do something for them that creates value for them that they elect to do with you? So you could offer them a service and say, well, of course I could go out and I could source that service or product or I could negotiate on your behalf. Most of the time, almost all of the time they would be asking for that or we would be offering that and they would be something they would elect to do. We don't hit them over the head and say, you have to go do that. Thing or that other thing. I think the secret sauce really is to be able to provide value to them in a way that they. That resonates for them and they want to accept that. That could be in a lot of different ways, negotiate contracts with vendors. It could be more creative things. And I think what's important is that we're always looking for those opportunities. Where could we do something that creates value for a franchise organization that they're going to want to come to us and have us help them with that? Because at the end of the day, you're right, Mike. If we help them be successful, ultimately we're all successful.

Yeah. And then we tapped on that as well. There's sort of the food services I do in the supply chain and things like that. Have you become heavily involved in that? Obviously it's been challenging times. Past few years in particular. Is that something you've become involved in as treasurer or is that more pushed out to the business sort of thing?

You know, typically treasury would be involved in commodity hedging and commodities in some form or fashion. But in the quick service restaurant business, it's a little bit unique because most quick service restaurants have purchasing co ops. So instead of having a purchasing team within the company, it's a sort of a separate entity, a purchasing co op cooperative entity. The reason for that is because the franchisor would operate certain restaurants and franchisees operate other restaurants and everybody contributes in to a purchasing co op that then goes and does buying on behalf of the entire system. So just a different model. But it generally means that the corporate treasury people are not really that directly involved in that type of purchasing. So commodities is one area of treasury that would be fairly common in other contexts. That is just not really done by corporate treasury in the quick service restaurant space.

You've been with the group so many years, very positive thing and everything else. But I was talking to someone the other day and they're in a similar situation. They've been with their group 20 plus years. We joke that the job has never been the same. You know, we talked about the fact that it's not just been the same job though. And they joined 20 years ago and it's just grown, it's evolved all the way through and that's what's kept their interest level. There's been ups and downs again, which has been one of the key things for them. For you. When you look back over this, you and I spoke before the show and you said you've made a number of the notes. What were the things that sort of jumped out of you, if you like, when you did those reflections about why have you been there so long in a good way. What's kept your interest all the way through that?

I think the role of the treasurer in the organization, any organization, has become a lot more strategic over the last few decades. And big CFOs lean on the treasurer now for thought leadership and strategic thinking in ways that I would not have predicted 25 years ago at the beginning of my career. So for me, again, I fell into this early on. I kind of just needed a job at that time and fell into a job that I liked and. But it turned into a career because like you said, the role is never boring, it's always interesting, it's always engaging. And it's continued to evolve quite substantially over the course of my career, which has always sort of kept the learning curve from flattening out, which is primarily what's kept me interested. I just keep learning stuff and being able to hopefully add value to my employer. And so at the end of the day, it has evolved a lot. And that's really kept it super interesting.

When the CFO knocks at your door or has done over the past, maybe do a prior to pandemic and then pandemic and the now. If you just look at that briefly, what have you been focusing your efforts on? What's the evolution over the past five to ten years been like for you?

You know, I became treasurer in 2013. Prior to that, I'd done all the standard stuff, cash management, cash forecasting, debt to equity and consumer payment, which is often part of treasury in a quick service restaurant context. So credit cards, debit cards, those kinds of things. So I had done all of those things and I focused on those. And then when I became treasurer, the CFO asked me to take on risk management, which at that time wasn't, as far as I could tell, all that common in Treasury. But it's become more common since then. But what's interesting about risk management is how that's evolved over time. You know, when I took it over, it was few people that were processing workers comp claims, general liability claims, and doing insurance placement. It was not strategic at all. It was transactional, it was very basic. And that has grown into a much more strategic role, frankly, I think a much more important role in the organization. So being able to build an enterprise risk management program which, you know, encompasses the entire company. Now we're actually providing thought leadership across the company in risk management. And, you know, we've taken on things like safety, restaurant safety. We've taken on things like fleet management. And so the actual scope of risk management has really become much greater. Even insurance placement has become a lot more sophisticated than it was in the past. So we've done all of those things and that's kept us busy for a while. And then in recent years, CFO asked me to build a corporate development function. So we've been doing that and then most recently we've been building an enterprise data governance function, which is very interesting. Data has now become a big topic for everybody. And keeping data safe and secure and private in the way that we need to do that to do the right thing for our customers, employees and suppliers, you need to be very disciplined there. And so we're building a data governance function to help the organization really be best in class there on all of that. So when I started off, even 10 years ago, I wouldn't have imagined data governance being in my organization. It's kind of evolved that way. And I would say, Mike, in some other context, treasury can also mean industrial issues, it can also mean tax. That's not for me. But it's pretty stunning when you think about all the things that could be under the treasurer's umbrella. You know, different context.

So this role you've got now, Gavin, it's sort of evolved. You're not a treasurer in a nice way. You are, but you're also capital markets, corporate development treasurer. Plus plus plus Is it a team management thing where you get someone really great as a deputy great. In our office, the great thing is we cover all the regions. We've got a new guy just joined us for the us. Fantastic. We give Joe lots of the stuff to do for there. Katie runs Europe. That's it. And we were at the Euro Finance and someone was, can we just talk about it? No. Oh, I said no, I don't know about Europe. They were like, well, you do. I said, I do, but the best person is, here's my expert. And I sort of dragged away from a coffee and said, there you go, talks. She knows that she's the expert of that field. This is the way that I do. And then for the uk, we've got Craig and so they're really doing a great job there. And we've got the other guys as well. Is that the way you've done it with your team or how have you done it team wise? You know, given all the other baseball caps, the other 15 hats your CFO is happy to pass on to you?

I think it's absolutely building the right team. You know, I have four director level people reporting to me now. That or manage their own verticals, if you will. When you strip everything down to the core, my view is that we're only as good as the people we surround ourselves with. Right. If you take the time to hire great people and then empower and support them and help them be successful, ultimately in the long term you'll be blown away by the results there. And your empowerment is an important concept for me. So we all try to hire the best people we can find and I certainly try to do that too. But you also need to trust them and you need to lean on their God given talents that you hired them for and empower them and clear the way for them to be successful. It's just amazing to see how people respond to that. And I've been very lucky to have had really great teams over the years and I've had to build and rebuild the team a few times through all kinds of M and A transactions as we have twisted and turned. I've always believed that building the quality team and developing people is really the key to everything else. It's a little bit like what Jim Collins said in Good to Great. So get all the right people on the bus and then empower them to figure out where the bus needs to go. That's kind of the way I've always thought about it.

So we're going to drill down on that. You've opened the door there, Gavin, to a cornucopia of great stuff. So in there you said you want to get the right people on the bus, but when you're getting them on the bus, and I love that book as well, you read it a number of times about firing bullets, not cannonballs and all the things that are there and encompassed in it. You're the conductor, you're at the front of the bus, you're thinking, right? And the person comes up with a ticket and you're like, nah, nah, this chicken isn't for this bus, go get another one. Or this, yeah, yeah, you can do this. But I want you to sit here or sit there or whatever. How do you assess people as a treasurer? You've got this depth of experience is fantastic. But I've asked a few people and they sort of said, oh yeah, I just assess people, I just interview them, I just know I have this. I mean, crumbs, if I had that, I'd be richer than one day. I want to be. But joking aside, it's tough, you know, that's why the Recruiters, how do you do it? Assess those people?

It's a tough question. It's tough to get to know people through a short interview process. I would say that relationships and networking is an important part of how you find folks in the first place. But you also want to make sure that when you meet people that you spend the time, you give them access to multiple people with multiple perspectives in your organization, and you spend the time to hopefully make the right decision for them and for you. And, you know, I think at the end of the day, you'll never get those positions all right, or those decisions rather, or right. I think you got to get them a lot more right than wrong. And you got to make sure there's rigor in your. In your process. But it's not so much science as it is look and feel and how you think through things and relationships and how you kind of interface with people. But at the end of the day, it's an art, not a science. And so you have to kind of look at it that way.

Focusing back on the business, obviously been through a pandemic. You had a guy from Brinks Map many, many years ago, and it was. We talked about the future of cash per se and emerging payment technology and lots of things. There's still reasons for it. And we had checks, we had cash, we had cards. And accelerated throughout pandemic things. But with yourself, I know that's a massive thing for you guys. And you as a business, you as a treasurer, is that something that you, you bring in people for as well? I know we've worked with some retail chains ourselves. And one of the key things I said, we need someone that knows cards, you know, or knows this and knows a lot of that. Is again, you've talked about having some of the experts. Is that what you're doing bringing in those guys or how are you dealing with it, if you like?

It's an interesting question. So obviously, if you're building an entirely new function, you're going to probably want to bring people in that have specific skills. But there are a lot of transferable skills between treasury functions, if you will. And always thinking about succession planning, always thinking about people development, always thinking about how people can actually rotate around and move and actually learn new things. And investing in the person rather than the specific skill set is usually my default position. Right. Then. Gotta match the role with the person and their abilities and their interests, frankly. Having robust development plans and understanding their ultimate career goals and thinking about succession, these are all things that are important. When the time comes for some new function to happen. When the CFO asked me to build data governance, I actually went and hired from the outside because we didn't have anybody that had inherently had that skillset and we wanted to move fairly quickly there. For the most part we've tried to build capabilities internally like corporate development. We never hired any new people for that. We moved people from treasury operations into the corporate development function because that was something they were interested in and something that we thought they could do. And it was a learning opportunity for them. And I think for us, for me, that's kind of sort of the default. Invest in the person, put the person on the bus and you obviously need to make sure that person is generally going in the same direction as the bus needs to go. But I don't think you need to be that prescriptive about it. If you invest in people's development, they will respond to that and ultimately will make the right decisions there for them.

So reflecting on that and then also look at where the bus is going and looking at yourself as a Treasury treasurer, plus plus plus and all those other things. I know you guys have got very much involved with cyber and looking at cyber attacks and that's one thing, but then there's. We've had world events happening around us as well. For you as a treasurer, not that keeps you awake at night, but what is the thing that you. Again, we have. A lot of our listeners are from the US so there's lots of US based treasurers and US listeners who are thinking of issues, but we also have a lot of international clients and listeners as well. So hello to all those. But what for you as a US based global treasurer, what are you keeping an eye on? What are you thinking is right? We need to be planning for this sort of thing.

There's always something, Mike, if you just look out on the ether right now, everything from inflation to Covid to a war in Europe, which seems crazy to say that out loud, but the world seems to be constantly shifting and it's becoming more interconnected and frankly more complex because of all of that. And the pace of change I think is going up. And most of us stepped up through Covid and I don't perceive this being much of a step down. I think the world continues on as a higher pace than before and certainly a lot more volatility going on out there. If you're looking through all of the sea of stuff there, all the things you could probably keep yourself up at night about, I tend to try to strip it back down to focusing on the fundamentals. At the end of the day, you've got to be good at what you're doing and you've got to be focused on the day to day and do the best you can with all the new things coming at you. But if you invest in people, process, technology, sort of the fundamental things, and obviously strategy is part of that as well, you'll be able to invest in all of those things that prepare you for whatever is next. So there'll always be something more right? Beyond inflation, there'll be something else. It's less about trying to predict that actual event and more about putting the structures into place that help you deal with that event. So I mentioned the enterprise Risk management program earlier. That was a program that didn't exist four or five years ago. We put that into place because we thought that that was a good program to have. And boy, are we glad we did that because through Covid, that program helped us identify the connection points between a lot of different risks that all started manifesting at the same time. So you can apply that same philosophy to. Well, I didn't really know about COVID Nobody could have predicted that at all. But I still had the mechanism in place to deal with that in a way that was value added to the organization. So that's kind of the way I think about it. Obviously, individual issues, if there's an inflation problem, debt rates are higher, you know, you have to respond tactically to the things. A lot of times it's the things you did in the years before that happened or before that manifested that to some degree dictates really your ability to respond to it.

As we wrap up today's show, as we do each and every week, we'll put your LinkedIn details in the show notes. I know people will be lucky to have you in their network, so you know, there'll be connections flying into yourself. But what are the takeaways would you give? You've reflected on this. As you very kindly said at the beginning, you've answered many of the questions. What would you cherry pick out of some of the answers that you gave as advice for people? People listening today? Some people want your job in a nice way. They sort of say, right, I should do that, should do that, and. Or you have people that. We should be thinking about this. Enterprise risk management, we should be thinking about this. What are the two or three top tips for people out there?

Best advice I ever got from anybody was to seek out a mentor. And that later on developed for me into taking on mentees helping other people. So to some degree, to pay it forward, I would suggest everyone to seek out a mentor. And the earlier you do that, the better in your. In your life, the better impact that will have. And later in life, find ways to mentor people and pay that forward as well. And you could have a very positive impact on somebody and yourself by focusing on that. I do want to mention though, Mike, that if I think about the challenges of today, just expand a little bit on the prior question. I think the work from home in hybrid is a tremendous leadership challenge that we all face now. Probably much more crystallized in my mind that this is a much bigger deal that I think than I think originally had thought. We're going to need to find the right balance for the company, for the team, which I don't think is the same answer for everybody, by the way. And I don't think there's one size fit all there. But I think in treasury and Finance, all support functions are. I think we are pretty well suited for work from home. So I think you'll find that would be a continuing theme in our industry. To give you a sense for it, about two thirds of my team are now 100% remote, and that trend is shifting even more to remote. Had a few people who live in town that have moved to other places because they now have the ability to live where they want to live. And as a result of that team loves the flexibility of that. And my engagement scores have gone up and people are generally pretty happy and embracing the hybrid culture. But with that comes responsibility. That's kind of the leadership challenge part. How do you maintain the human connectedness in a hybrid world? And I think that again, that answer will be different for each leader. Me personally, in my role. We're bringing my team together a couple of times a year to be together to do things like social events and community events, building relationships and getting to know one another. And that's proved to be pretty good. And I kind of wanted to offer that out there to the audience as maybe some way to replace the water cooler in the less formal directions. That used to occur naturally. That don't really occur in a remote context. You know, maybe there's a way to do it a little bit more deliberately. And for me that's been bring the folks in a couple of times a year now we're. We're starting to coordinate that with company events so that they get to meet and build relationships broader than just our team. And. And that helps people with the engagement part. That helps people with the Relationship part without taking away flexibility that they like for their flexible work schedule. So it's a balance suite. I'm not sure we've totally crack the code on that, but I did want to offer that out there because I think others will probably be facing similar challenges. I think it really is going to be a key challenge for all leaders in coming years.

Left out alone because I thought it's listening so intently. I'm sure the listeners will as well. But again, normally I just leave this section alone because it's your closing words, but I'm actually going to jump back in because I want to answer the question. But that's brilliant. In a similar way about remote working, it's taken over my industry. You know, we never used to ask in our salary setting, now we ask all the three questions, you know, how many days are you currently doing? How many days does your boss want you to do and how many days do you need to do? Three diff. Very different. But they're exactly the same question. What questions should senior treasury professionals and finance professionals may be asking themselves? You've gone through that, you know, you're part of the way through the journey of that. If you like. About that remote, what would you recommend if you were having that chat to those other treasurers? Maybe you're sitting on a panel, you're doing it now. What should they be asking themselves and what answers do you think they should be getting, do you think?

I don't think any of us have cracked the code. I'd love to learn from others. What are other people doing? And me offering what I'm doing, hopefully that will help somebody. But I also want to know what others are doing. For me, it's about engagement. We measure engagement through a survey that we do. I can tell you my engagement scores are going up and so that's a useful way. Not everybody has that. I think the theme and the concept is the right one to think about is how engaged are your team. You can measure that in a lot of different ways. Work output and units of work. That's just sort of one component. Is their engagement high or they are. They're happy to be working here and that's a component. It's not just where they're physically working but care about their careers. Are you helping them develop? And it's a package deal. But I think part of that package now is where are you physically located? Where do you want to be located? And you know, like I said earlier, I have somebody who has worked for me for some time pre Covid. Hire who just moved to another state because her husband's retired and she wanted to live in another state. And that person is extremely engaged and happy. And it's just a great story there. I see that starting to repeat, but I'm very interested and I think maybe one thing that you could probably do is to facilitate some of that sort of learning. What are others doing with this challenge that we all have on Hybrid?

I don't think there are any easy, quick answers or quick fixes, you know, And I did this with the NACT recently. It's great. You guys are also, oh, let's get back in the office. And I said, but then when I quiz them, they were saying, well, actually, yeah, I'm seeing the banks, see my partners. Are you seeing. I'm seeing less of my team now I'm back in the office. I'm like, you know, so I think there are. We're still on that journey, still on that path, if you like. So, yeah, for sure. Amazing. Sir, any other final words? I don't want to. Don't want to talk over you. It's, you know, just any takeaways for anyone.

I just appreciate the time. I think there's just a ton of benefit that you offer doing all these podcasts and I just want to recognize the benefit that others get from that and appreciate your time.

Well, no, much appreciated. I said so many times at the conference the other day, it was meant to be 10 episodes with 240 later, and none of the stories are the same. All are different. The variety is just amazing. And they're just grateful for the time for a busy treasurer such as yourself and look forward to catching up with you, not virtually actually in real life sometime soon.

Thank you very much, man. Thanks so much. Take care. Bye bye.

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 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, Sam.