The Value of Learning on the Job with Steve Beckley

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 treasurers about how they've built their careers, where they are now and where they see both themselves and the treasury profession. Going to next and this week's show I'm joined by Steve Beckley. Steve Beckley has a wonderful treasury background right the way across a number of different US corporates, basically spanning 20 odd years. And we've got obviously he's based over in Texas. You'll hear his Texas accent in a moment when I get him doing all the talking. But MBA, 20 years of experience building, leading, advising public and private companies within Treasury. So a wealth of experience to share some stories with us today. So as always, Steve, that's enough from me and all the talking. I'd rather hear more about your Texas accent and everything else. Steve, over to you, maybe about how you discovered the world of finance and then the wonderful world of Treasury. Over to you sir. It's your show.

Thanks Mike. Glad to be part of the treasury podcast. Excited to be here. I started out my personal story with treasury was I got my master's in business from the University of Houston, did an internship with Halliburton Co. Which is a publicly traded global oil field service provider and started out within the finance and development group as an analyst. My work consisted of doing financial modeling for advanced equity projects where the company would take an equity interest in the customer's oil and gas project in exchange for the economics of the project as well as for the pull through of services for Halliburton. So it was kind of a mutually beneficial situation for the customer and the client. Did that for a couple years and then started working within the same group, do export credit agency financing which was more customer facing, got much more international exposure and during that time period we got pulled into the treasury group of Halliburton and I continued to do that work, learning under a mentor there. We got to line up a lot of financing for the national oil companies of the world from Sonangal and Angola to Sonnetrac in Algeria. So got a lot to do, a lot of international travel and that's where the international bug kind of hit me and continued to do that, that work as well as within the treasury group, take on additional duties with customer credit and international customer credit and bank guarantees and letters of credit.

So a good first start for you in treasury, would you say? Sort of, you know, I know it's a while and back and thinking back to those Days. But you seemed like, you know, certainly from, you know, when we had our discussion before, it was sort of a good foundation within treasury, you know, right the way across with lots of international exposure. Whereas, you know, some US roles are perhaps a bit more domestic because of the size of the country. So I think. Do you find it good introduction to international stuff, would you say?

Oh yeah. It was a great training ground for me. We had a lot of very senior people to learn to under. I learned a great bit of my career there, my foundational base there. Some of the smartest people I've ever worked with were there and really got me interested in working for large companies and particularly international companies. So yeah, it was a great experience there. So I spent about six and a half years at Halliburton and then a opportunity to expand my skillset further opened up at a smaller oilfield service company called Key Energy Services where I was hired by the treasurer to implement a financial planning and budgeting system there. So heart of treasury, but expanded my skillset in the FP and A world. So I got to implement Cognos enterprise planning there. So the CFO wanted to move away from spreadsheets and get to more of a driver based planning system. So I worked with our operational segments and our VPs of the business lines to model revenue and cost structure for the company. So really got to learn a different aspect of finance and then also work on some international business development. We were able to expand our business into Mexico there, got to work on the financial analysis and commercial structure of terms with the clients down there. Again, a great experience, didn't spend a whole lot of time there and the reason I didn't was because great opportunity opened up at Superior Energy Services, which was another again oilfield service company, but one that had a little more international exposure and one that did not have a Treasury group. It was one that basically had grown through a series of acquisitions. Like a lot of oil field service companies, they'd grown to the point where they were well over a billion dollars in revenue and needed a formal treasury function there. So I was hired by the CFO to build one from scratch. So it was really a fantastic opportunity because you don't really get that opportunity very often to build something from scratch. So I really jumped at that chance. It was a very decentralized company at the time when I joined. So we had cash sitting all over the place and we were borrowing money corporate. So first order of business was to basically streamline cash, implement a cash pooling structure there, at least domestically in the US and consolidate bank accounts, strengthen our bank relationship management and put better processes and controls in place there.

And when you did that, you know, just again, superior you relatively early in your career to then here you go, here's a startup. Is that not the right way? But it was a listed PLC and suddenly you're the VP of Treasury. So you know, what was that like for you, being that early in your career and you're the boss? So here you go, start it all up.

It was kind of a sink or swim situation. My boss said, you're going to be in charge of this and you're not going to have any help. For the first few years, I kind of had to figure out a lot of it on my own. I guess I've seen this advice from other people, but it's like if you don't think you're quite ready for the challenge, accept it anyway and figure it out on the way. And for me, that that worked out because it left me no choice but to figure out a way to do it and make it happen. So I had a lot of experience from Halliburton Key, but I definitely did a lot of on the job learning there. So.

And when you say that, you know, again, for the people listening today, you were there, you know, over 10 years, you walked in the door, you know, what was your checklist, if you like, and, and how did that then develop? You know, when you're first coming in, you go, right, where's the cash? Or where's the risks? Or what was the sort of working with the cfo? What was the, what was your pick list, as it were?

I'd have to say the first order was of the pick list was to find out where the cash was, how much we had. We didn't have very good reporting, especially from an international perspective. We had controllers in different countries sending in a cash report at best once a so and that was if you could get that. There wasn't any cash flow forecasting. So we had to build out a process to do that and then ultimately to get a better handle on where the cash was, I implemented a Treasury workstation for the company so that we could get better visibility of the cash. And I implemented Cariba as a Treasury workstation there for the company. And that really streamlined touch of a few buttons to get the daily cash report out to executive management and also do debt reporting for the company. And it was really neat experience. Got to work with it and learn more about it than I ever really planned to or wanted to with that.

Out in the business, those guys previously just send you this cash report and you're then suddenly going right, we got curry, but did you then have to go out and train them or did you just say right, fill in this or what was the again for the listeners today? And they're facing the same. They've gone, yeah, we're going to choose that, or chosen our system, you know, what did you go through to actually train them, coach them and things like that to make it work? Or you know, did you just send out, say right, here you go, fill in this.

Well, no, we did need their assistance to help establish the bank connections with their respective banks in their respective countries. But we really managed cash from a corporate perspective after that. So our subsidiaries did their accounts receivable and accounts payable, but we managed all intercompany funding, all repatriation of cash from a corporate perspective. So once we got the connections up, we were able to get that daily reporting and didn't have to rely on them to supply us with that. That being said, they still had the control to move some cash at their subsidiary level and still maintained bank relationships with their banks, whether it be in Malaysia or Indonesia or what.

You've spent a number of years in the energy sector and things like that and then, well, you made that, let's go through the next move. You know, maybe then we reflect a bit more on the sector because I think, you know, there are individual characteristics because that's the right way to put it. But talk us through then you were superior for period. And then most recently bring us up to date sort of thing.

Most recently I was with a company called Strike LLC which is a domestic US oil field, really a pipeline construction, repair and maintenance company and they install pipelines from all across the US from up in North Dakota, Colorado down to Texas. And it was a private company, private equity owned as well as family owned. So it was a kind of a unique ownership structure and got to see a little bit of different side of things on how companies are run. From my experience with a, you know, mostly publicly traded companies. Also was a domestic only company, a domestic US only company. So a lot more simple from the treasury management side of things, but really got to focus on working capital improvement. It's very working capital intensive kind of business. So really main focus there was not implementing but improving upon billing processes and getting things billed to the customer. So the cash conversion cycle was as fast as possible for the company. So we didn't have to rely on as much debt. And because we paid People on a weekly basis in that, that industry. So it was. We would be out of cash quickly if we didn't bill our customers as quickly as possible.

So yeah, made it work.

Yeah. A lot of different challenges there, but allowed me to see a different, different side of things, different type of business.

I know we've spoken about this before the show and it's an interesting one with the sector. You've had this amazing experience of oil and gas and everything else. Talk us through what you've seen the market and not just from within as a treasurer, but what's it like in that world? How would you describe it to people? If people are thinking actually, I know it's a challenging well with the price of oil and things like that recently, but what are the key challenges that you see from oil and gas now and in the future?

I would say the key challenges right now for oil and gas are really access to capital. Wall street is particularly leery of oil and gas and from not having seen the returns that they would like to see over the years. So especially from raising capital through an equity basis or especially through lending basis has changed dramatically since I started. A lot of things were on a cash flow lending basis. Most service, at least on the service side, have gone to asset based lending, credit facilities. That's been a big shift in change. So the banks take on less risk and only lend off of the, whether it be the accounts receivable inventory and if you're lucky you can get a little bit of fixed assets, but that's pretty rare. And then a lot of companies have unfortunately had to restructure because they just the earnings had fallen off so much that they couldn't support the credit metrics required by the credit facilities and the lenders.

And with treasury coming down into that, where do you see Treasury's role in that? Obviously we've said with COVID and everything else in recent years that lots of treasury is right at the forefront of things and things like that. Now maybe Covid is vaccines coming along and the spotlight maybe is moving away sometimes a little bit from treasury, but it seems like it's always going to be on treasury within oil and gas and that your industry, what's it like compared to others? You perhaps met treasurers in other companies. What's the key thing that you think this is what we have to focus on all the time? Is it all about cash or is it about working capital? Or you talk about some of the assets there? What are the key things you need to really get right?

Would you say I'd say the things you really have to get right are keeping on tap of what's going on with the markets and what currently banks are willing and able to do. Sometimes your relationship managers are willing to do a lot of things but they're not able to because of the credit committees within the banks. So you really have to stay on top of things and educate your CFOs or your board on what's possible in the markets. And that also with the constraints that are currently in place, that also gives you really lens towards more improving that working capital that you mentioned before. Because the cheapest money you can have is working with your customers and improving your cash conversion cycle so you're less reliant on those outside sources for financing.

And looking at yourself, you know, as a team manager or you know, as a mentor for thing people and stuff like that. Again we spoke about this before the show previously. You know what I was going to say, what do you like as a boss? Let's ask you what you like as a boss stroke when you're, you know, being mentored as well. What are you looking for in your boss and what are you then passing on something? What's your ethos?

As far as what I like in a boss or mentor is somebody that's definitely willing to give feedback. What I like is somebody that's willing to of paint a broad picture, give you a 30,000 foot level of what they would like to accomplish from a strategic standpoint and then let me kind of fill in the gaps and the details to make that picture come to fruition. So that's what I like. I do like getting feedback so I know we're on the same page and going in the right direction. As far as how my management style and how I like to work with my staff is the one positive of having small groups in treasury, which treasury groups typically are very small. Hope you can attest to that Mike. But that's been my experience.

Small but perfectly formed. I'd say that's what we want. We want, you know, and this is why we enjoy, you know, the real specialist nature of I think is, is ideal because it really gives you guys seat at the table. But some real value, that's the real thing you can bring to bear. So you know, whenever we're recruiting you treasury guys, that's what we like love to do sort of thing. So again I was going to, you know, then look at as we go into the future with treasury, what are you seeing as the biggest challenges coming along the pipeline? Because I know you're out there in the market talking about their next role and things like that. When you're talking to some of the perhaps people and you're sitting there in an interview or meeting someone, you know, they're saying, oh, you know, where do you think the next challenge is? You know, what are you seeing as the future of treasury, as it were?

I think the future of treasury is like in a lot of things currently, there's an increased focus on automation and making things as efficient as possible, whether it be the treasury workstations, a lot of collaborations with the ERP systems of companies and getting those through. So there's seamless processing of transactions and less requirement on people. We all need to have jobs, but there's an enhanced focus on doing the day to day, getting that process down on a transactional basis to be clear and so that treasury can focus on more strategic things like turn on capital, shareholder returns, those sorts of things. More strategic in nature and less time spent on manual day to day things.

And where do you. So you say that you know, they're doing more sort of the more value added tasks, if that's the right way to put it. But you know, how do people, someone's in there and they're currently working on spreadsheets, you know, they don't, they don't have a workstation, they don't have all those other things, bells and whistles you've had the investment to get. As you said, Kyriba is a system in the past. They can't get that sign off. They're sitting there and you've been through this where you've had other places where they haven't had it. Again, what should be the priority list for them? Should they just be keeping on banging on the CFO's door saying you need to give me this or what do you think?

I think trying to keep that pressure up is always a good thing. I have seen a lot of improvements just from the banking side that they offer a lot of services through their own banking portals now that they didn't do 10 years ago. That can help smaller companies automate a lot of things, whether it be something as simple as an Excel add in or something. We didn't have that at my last role at Strike, so we worked with bank of America and they have a lot of great systems that just not a plug for bank of America but they were good provider to us, some Excel add ins. So we automate our daily reporting. So there are a lot of tools out there and a lot More tools offered to corporates that just didn't exist a long time ago. So there are say multiple ways to skin a cat to make things better.

And more efficient and with more the sort of advent maybe of open banking and things like that. You mentioned their bank of America and it's a bit of a thumbs up for them, which is fine, we can have that on the show. But do you think there's a danger that people could get sucked in by those? If you have to use the bank of America system because you can't get that, do you feel that people can break away from that or it's just inevitable that if they haven't got the support of able to move across, they will get tied into various banking systems because that's all they can use sort of thing.

Yeah, I'd say there's always a risk of. I never like to deal with only one bank. I think it's because you never know what you're going to run into from a relationship perspective or a lending relationship perspective. So that's the one benefit of working with like a third party treasury workstation provider. You can plug and play with different banks that you work with. So there is a risk of using, relying on one bank's solution that they offer to you. So yeah.

So Steve, you've obviously focused a lot of your career within an oil and gas industry. You've seen that things. But you and I have spoken before the show and during the show about the fact that, you know, sometimes it seems that some clients, and I've seen it before myself, and we were talking that one of my clients had said, Mike, you know, can you find us? We're an engineering consultancy. We want you to find us another engineering consultancy. Treasurer in the downtown LA region. And I was like. Or area. I was like, hang on, you're the one person I'm not going to, you know, you've not got three or four competitors within a square mile and they, but they were very fixed on having that industry experience. But within treasury it doesn't necessarily seem to matter that much. I certainly don't think. What are your thoughts? Have you heard the same or what are you thinking?

Yes, Mike, I've heard the same thing, especially here in the US that CFOs want somebody with or hiring managers want somebody with a specific industry experience for their company. I don't believe that's necessary. I think treasury is. One thing I liked about it is that it's, it's for the most part pretty industry agnostic and I think it should be that way. Everyone needs to, of course, learn how they're getting the cash and where is it going to the cash conversion cycle for the respective industry. But I think I'd like to dispel the myth that you have to have industry experience to be successful in a Treasury role from one industry to the next. I've seen colleagues throughout Europe that have jumped from many different ones and been successful at it. So hopefully we can spread the gospel that here in the US that Treasury people can work in multiple industries and still be successful.

Totally. And I think that a lot of the time by bringing different perspectives. Certainly when I put shortlist together and they've said, oh, why haven't they got luxury goods? Or why haven't they got this? And I'm like, well, actually, you don't need that. You need treasury and cash management and working capital. And these are the key core skills. They're more functional than they are just industry, you know, that's only something I've seen.

I've seen a couple companies throughout my years of experience that even at the CFO level, they, you know, they made a bold move by hiring somebody outside the industry. And I think mainly just to provide that fresh perspective that they hadn't been seeing before. It's always the safer route to go with somebody with the industry experience. But you might be pleasantly surprised by getting a new, fresh perspective from outside your industry by making a hire from somebody that doesn't currently have that experience.

Yeah, and different. Okay, so we. We're approaching the end of today's show, and as always, I asked for your top tips, if that's the right way. So, reflecting back, we'll put your LinkedIn details and in the show notes so that people can connect to you. And I know that Steve is actually out there active in the market. So if he sounds like a treasurer you want to talk to, he's got some great experience. It doesn't have to be industry specific, as we've talked about, so you can connect with him. He's, you know, great guy, great experience. But. But if you reflect back, Steve, what sort of the top areas you think that, you know, again, someone looks at your background, says, I want to be like that. I want to have a similar thing. What are the key takeaways you would say about you and your expertise?

I'd say my first tip would be to, you know, always be willing to accept new assignments or new projects. May not be totally ready for it, but I would say jump in, take on the learning experience. Sometimes it's hard to get those new opportunities, so be willing to accept those when they come your way. You should be pleasantly surprised by what you learn from the process. Another tip would be continued learning, whether that be on the job or outside the company. You go to organizations like the UK Act. Yeah. Whether that or the AFP here in the us. Those are good training grounds and give you good industry experience. Not industry, but just treasury experience.

So you can see sort of rubber stamp of your level of expertise, aren't they? So you've got the bit of paper and, you know, you. If you get someone, you know, CTP qualified, you know that they're going to be at a certain level.

Right. You know, they have that base understanding that you need and they can. They can speak the language, can do the job. The last point I would say is Network, Network, Network. Talk to people in other industries, other companies. I've been a part of a treasure group here in Houston with other treasurers and if you've run into a problem, chances are they've run into and are currently dealing with it or have already dealt with it. People are usually pretty amazing and willing to share their expertise with you and they may even be a competitor, but they usually are more than happy to help you out with a certain issue that you're having.

Brilliant. So people, as you say, so we've got, you know, take on projects that you're uncomfortable with, you know, you'll soon get comfortable with them and things like that, designations. So qualifications, always take those because you can always have those in your back pocket and as you say, the triple network. So make sure you're out there, you know, meeting lots of people. You never know when it might help you. So that's brilliant.

Yeah, thanks, Mike.

Yeah, thank you, sir. Thanks for your time today and, yeah, look forward to again, connect with Steve and, you know, hopefully help him find that next role. And he's a great guy to have in your network, so brilliant stuff.

Enjoyed speaking with you, Mike, thanks a lot.