Leading Global Treasury Teams to Success with Fred Schacknies

Foreign welcome to this week's Treasury Career Corner podcast where I talk to treasurers each and every week about their treasury careers, how they started their careers, where they are now, where they see both themselves and the treasury profession going to next. But this is one of our revisited episodes. You're going to hear me in a moment having a lovely conversation with Fred Shaknies. When I originally spoke to Fred way back when, back in beginning of COVID really he was at Hilton and we'll talk about his career there. But actually I then catch up at the end of the show with Fred. Now he's with Technip and he can tell you all about them as a company. Talks about some of his experiences within Treasury. He's a great guest. Let's get on with the show. In this week's show I'm joined by Fred Shaknes, the senior VP and treasurer at Hilton Worldwide, headquartered in Virginia. Hilton Worldwide, as many of you will already know, are an American multinational hospitality group. In 2018 they were recognized as one of the best workplaces to work in. And in recent years they've moved back from, well, they've been both a public, a private and more recently a public company again, which I'll ask Fred to perhaps explain a little bit more detail in the show. But as you treasury guys love your facts and figures, I just wanted to highlight a couple of their numbers because I think they're truly amazing. So Hilton Group have 16 world class brands, 5,500 properties, 895 rooms, 109 countries and territories. Get your head around that lot. And they've in their hundred year history welcomed more than 3 billion guests. And I've been one in the past and be very happy. Sometimes on the podcast I give a detailed introduction to our guests. But rather than that today what I want to do was get Fred to tell us about himself rather than me ruin it for all you guys kicking off into it. Fred, you've got a degree from Brown and an MBA from New York. Maybe talk us through your first moves into the world of corporate treasury and how you started out, if you would.

Sure thing. Thanks Mike, very much for the opportunity and glad to be joining you today. After college I started out actually on a trading desk somewhat through happenstance. I knew coming out of college that I kind of wanted to focus on economics. That was my degree and the reason being I was just sort of quantitatively oriented. But I think what I found interesting about economics was it's something that kind of had a social impact too as well. I mean it's really just as much about psychology as it is about money math. So coming out with that economics background, I kind of decided to go into finance and stumbled into treasury, really by way of a trading desk. Not that I saw myself as a trader per se, but that's where an interesting opportunity came up. And so the first five years I spent trading currencies and interest rates and doing sales as well, having done that, and that was a fantastic and fascinating place to spend a couple of years, both. But I didn't really have any particular idea of what happened, what transpired in that value chain that I was on before me or really after me. And as fascinating as those kind of microseconds are between bids and ask and price changes, I wanted to get a bigger picture of a better understanding of what was going on in the entirety of the finance value chain. So I decided to go back, get an mba and then from that went into the corporate practitioner world. And that's something I'd kind of gotten a glimpse of, having spent some time in corporate sales desks as well, speaking with corporate treasurers and understanding about their perspectives, the problems that they faced, and really how it fit in with the bigger picture of the issues their companies were dealing with. Having gone through my MBA work then for three companies, the first one was Lucent Technologies, or what was then Lucent Technologies, based in New Jersey, after that with what was then Constellation Energy based in Baltimore, and now for the last 10 years or so have been with.

Hilton here in Virginia and with those roles at Lucent. That was your sort of introduction to treasury, if you like, you came into it. So you focused on sort of in house banking of things, or how did your treasury career grow? Because you're the global treasurer of Hilton, so you got it done pretty well through those years.

Yeah, it was an interesting transition to go from a trading desk with a mindset of a trader and into that of a corporate treasury practitioner. And obviously you've got to shift your objectives, your framework, your risk perception, everything else that you look at. So the problems that Lucent was dealing with at the time, being a growing global multinational company at the time, lots of issues with global liquidity, with global risk, and those are the kind of things that somebody who works in a trading desk probably has a good sense of. Most of the issues that I focused on when I was at Lucent had to do with dealing with kind of global growth and the financial consequences of that in house banking. Yes, was definitely one of the big successes there by implementing a very successful in house, bank, platform in terms of what it was able to achieve, but also in terms of how it did it in terms of technology and process. Everything else. It really did have some positive financial impacts for the company in terms of ability to repatriate cash, in terms of ability to get our arms around risk. Lots of good lessons learned there about I think how to things that companies should look at with rolling out that type of platform.

And from technology and telecoms, you then made move into America's energy choice Constellation or explain those guys. And it was a move of location as well.

It was. And partially based on the fact that my I'm from the Baltimore area originally and my family was nearby there. And this move happened shortly after our first two children, we have twins, were born. So the idea of being closer to family sort of grew in significance in terms of career choice. So an interesting, you know, change in terms of not just location but industry. Everything kind of from the utility management side to longer term projects of nuclear power plant generation and to the day to day volatility of trading activity. So an interesting portfolio with treasury challenges, let's say.

So what then happened with Constellation as they evolved or changed what happened with the group?

So the company, very successful in lots of different activities, ultimately was acquired by Exelon. And it just so happened that around the same time that that transition was going on, Hilton was relocating from Beverly Hills to Northern Virginia. So an opportunity came up at Hilton that I think was just, you know, too good to pass up, kind of going back to. So my roots and interests really lie with international, with global enterprise and the challenges of international finance. And Hilton having, as you mentioned earlier, a really profound global footprint which is really absolutely fundamental to who we are. That was an exciting opportunity. You know, I myself was one of those 3 billion folks that you, you kindly pointed out at the beginning. And so it's just kind of one of those brands that, you know, a majority of people have a very positive affiliation with and myself included and having traveled quite a bit myself as I have the idea of being part of an institution that sort of fosters international travel was certainly attractive in and of itself.

You joined Hilton back in 2009. Where was it in its journey if you like? Because you've been there what, nine over nine years now. And throughout that time it's changed a lot as a company, treasury to one side, we'll dig down into that. But how was it different?

Yeah, so as I mentioned, I joined immediately after the relocation from California to Virginia, which came shortly after the Company was acquired by Blackstone and was taken private. A number of profound changes there in terms of leadership, the ownership terms of kind of the entire corporate leadership team. But the timing of that, ill fated though it was in the downturn of kind of 2008 and nine, it was a. You know, that was a rocky time for a lot of companies, you know, and Hilton included. And so lessons that I had learned in terms of managing liquidity and dire straits at two companies prior certainly came into play as well. And, you know, I think, though, that, I mean, Hilton has a very strong franchise, very strong brand, and withstood all the cash flow tests during that period very soundly and has really solidly rebounded since then.

So as you went through that downturn and recovered, the company changed as well. You went back to public, and there were a couple of different changes. How did that change and affect you guys in treasury and your role and what happened?

Yeah, so it definitely is an interesting transition point. The company being private for a number of years was an essential phase in its development, I think. I mean, a number of changes had to happen in terms of not just the physical location of the company, but in terms of the makeup of the organization, in terms of refreshing a number of the brands, in terms of integrating a number of the corporate activities, and really just revitalizing the entire corporate enterprise. And I think those types of decisions, many of which are very expensive and many of which are very painful, are often, I think, best executed under the umbrella of a private institution. And I think that's a lot of those changes are what Hilton was able to make. And I think in the years that followed, I think the leadership team has done a fantastic job of exactly that, of really revitalizing the corporate enterprise and the franchise. So from that, you know, the company, I think, has rebounded very successfully in terms of sponsoring organic growth, not just of net units of hotel rooms and hotels, but also in terms brands. All of that, obviously, was being done by a PE investor, was done with the expectation of eventually returning to the public markets. And so that was done. In 2013. The company went through its actually second IPO, the first one being a couple decades earlier. So that transition back into the public world, I think by that point, I would say it really wasn't that tremendous of a change, because by the time we'd gotten into the tail end of this ownership phase, many of the corporate controls that you would normally associate with public life, you know, were already in place. Many of the disciplines in terms of management structures were already in place. You know, there was a bit of a transition in terms of our main owner being from sort of the, you know, sole to majority to minority to now, you know, entirely disinvested. You know, there was some change there in terms of who reports what to whom, but really in terms of all of the installation and the growth of the kind of the corporate engine behind it all, I think was already in place.

And with that, throughout the time that you've been there, in the nine and a half years, a global multinational, you've led teams, US and UK and overseas and different integrations with treasury globally. What's it been like for you leading a global treasury team? What's your leadership style for those guys? Are you hopping on a call every week or how do you spin the plates for each of the different locations, as it were?

When I got to Hilton nine years ago, I was actually the only person on my team here in the head office, and everyone else was either in one of our hubs in Memphis or outside of London. And so I had literally no connection to them other than telephone and email and whatever data they were able to share in whatever format. And to answer that question about how does one lead a global team, it's putting in place a stool of people, process and technology, and that has to span globally for all of those things to come together. In terms of the technology, which was a large piece of focus for several years, it was just getting all of the different offices on the same technology platform. Without that, it's impossible to share data, much less intelligence. So that was a key focus for really the first five years, I think, of being here. But along with that is aligning process and making sure that everybody's working under the same set of policies and according to the same standards and according to the same goals. The last piece there of people is the hardest one to realign and it's the most important. You can't do that without a certain amount of face to face. And I do travel to try to get in front of other teams. Maybe not as much as I could. As much as you can, you know. Yeah, as much. As much as one can, you know, it's putting other people in front of their faces too. So we're trying to be more mindful about building connections, not just at my level, but up and down the organization. Getting people to the point where even if you're in a different location or a different continent or different time zone, it's knowing what your colleagues are doing so that if you call them up, you know where they are in their day, in their workflow. Everybody's essentially working as part of the same team, you know, even if they're not co located. And again, getting to that level of sort of people alignment, you can't do it without process and you can't do that without technology.

Fred, you talked there about all pointing one direction. Everyone processes everything. But how did you come up with those goals? What's the ethos for the treasury team at Hilton Worldwide?

That's a great question. I think aligning everybody around the same purpose, around the same goals really does start top down. I think to give credit where due, I think Hilton and the leadership here have done a tremendously good job at defining that at the corporate level and, and pushing it out. And so our vision, mission and values is all very clear. You know, we all know that whether we're working in one side of treasury or the other or accounting or anything else, you know, it's all going to the same goal as a hospitality company. But you know, pushing that down more tangibly into what does that.