What is REAL Treasury with Hans Grundström

So, 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 built their careers, where they are now, and where they see both themselves and the treasury profession going to next in this week's show. Delighted to be joined by Hans Grundstrom, the Treasury manager at Getting Group. Founded in 1904 in Sweden, they're a leading global provider of products and systems that contribute to within healthcare and life sciences. But as always, I'll get Hans to describe that a little bit later in the show. You know, the massive company head office located in Sweden, but he's actually based, as you see, he's got quite the Swedish accent you might expect. Bit more Irish brogue in there. Hans, take us back through your career, if you would. Interesting start, and then before you discovered the world of treasury, tell us how you got started and then discover finance, then discover treasury and then bring us all the way through your career, if you would.

Hi, Mike, thanks for letting me be on the show. Pleasure. Yeah, it all started happening somewhere 20, 25 years ago. I was looking around on the Internet, which was fairly new back then, for a college to go to, and I found Trinity College Dublin and I applied for it and they made it really easy to start there. All the materials arrived in the post box quite quickly and I ended up going to Trinity College there for four years. Then I returned home to Sweden and the job I found for myself there, this would have been in 2001, 2002, there, when finance jobs were a bit scarce to get by due to. I think there had been an Internet bubble. There had been some tragic occurrences in the United States at the time, and the payments industry wasn't quite where it had been maybe a couple of years earlier.

Yeah.

So, yeah, I found myself a job as a postman and got promoted into a manager there, where I managed an office together with two colleagues. I managed about 30 staff and we focused on things like getting the staff turnover, that's 100% or so when I started annually, because it ends about 15% and so on. But it wasn't what my dream job had been. I mean, I had studied business in college and I hadn't seen myself working in a post office. It was something that my dad had done before me, so I was quite proud of following that tradition. But it was time to move on and I ended up moving back to Ireland. And in Ireland, then I found a job first in Accenture doing account receivables, which was Very gratifying, actually, talking to people of different levels in the client organizations and talking to them about not just invoices, but you get a wonderful opportunity to talk to people about a little bit of this and that and ask them questions and. And generally it was a job I quite enjoyed. Then Citibank came in with an offer for another role and I assumed that this was a team leader role and management role because, let's face it, I didn't have much financial background. So I looked at that job spec there and I started in Citibank in a couple of weeks. I realized that in fact the job spec that I'd gotten was wrong. And the job that I had gotten was quite different from what I expected it to be. It was still a very interesting job, though. I was working with their product, wordlink. We were moving one of their offices from the United States over to Dublin. So we were learning how that product worked, which was a Czech product. I, at that time didn't think that Czechs really existed anymore. I thought, you know, being European, being from Sweden in fact. Right. I. I probably had only seen a check once or twice in my life before and I thought that they were on their way out. But I learned differently and I learned the uses you can get out of a check as well and what a great tool that can be for today for a Treasury and do things with them for payrolls in difficult locations. And you have all these solutions for making payments without having an account in certain countries and so on.

I remember actually myself, sorry to just jump in, but I just remember similarly coming from the uk, okay, checks were still here, but they were on the way out and as you say, back in 06 and things like that. But I remember being at the AFP conference in the US and them being sort of E checks, but they weren't. They were actually. You just sent them to it and they scanned them on fax machines and stuff like that. And I was like, does that really still happen? But exactly as you say. Then when got to understand it, they said, well, this country doesn't really have a banking system where it's still. It's in its infancy, so it's much more fraud resistant than cash. And it was just okay. And it was just sort of that promissory note sort of thing. But as you say, it's sort of. It sounds like again, just for the listeners, that stage you made that move from Accenture, but actually you joined Citibank, but you talk us through that. So that was your first bit there, sort of a slightly unusual move because it was a different job to the one you thought you were in. But then how did your career develop from there at City?

It really took off. Then when I run into one of your friends, I believe, Andrew Bishop. Yes, the Treasury Solutions Group, who will.

Be on the show sometime. If you're listening, Bishop, you're going to be on the show one day. I'll get you on there. You'll be great. But Hans is here now, so you got there first.

I'll tell all the good stories and I'll leave you with the rest.

Yeah, lovely.

He gave me a chance to work in the Treasury Solutions Group, which was an outsourced treasury operation. Citi was offering its clients to do their treasury for them. You would agree on the scope of what was to be executed, under what rules. It was very rigidly documented what you could and could not do. And that, I must say, has still today wish that I was back there. It closed back in 2008, 2009. It was one of the first victims of the financial crash, as I believe Citi was trying to limit their risk, I think. But what was great about this place was that you got to play with all the toys. You got to play with multilateral netting, you got to play with bonds. You got to play with online banking. Whatever there is. Whatever there is that Citi offers. And let's face it, you offer most of it. Some clients, one or another would have signed up for it, and you were eventually put on it to operate it and deal with it for them. I also loved it because you got to meet so many different clients and see how they did things so differently.

Hans, can you explain what a Treasury manager at the Treasury Solutions Group did? Because as I understand it, big global corporations would say, actually, you act as our treasury for that region. So maybe Caterpillar or anything else. So what was the offering to the corporations? And then what did you do? Again, for the listeners?

Okay, let's think of it as things that we might be able to build into an unattended robot with RPA today. It would be things where you could set a rule, let's say an ethic deal determination to operate your hedging program. You've already sat down at your table. You've decided what the principles for your hedging program is going to be and what parameters will trigger a deal to be to be put in place. We wouldn't set those parameters. We wouldn't do the thinking of the principles or the policy. What we would do is, once you have that document, we would execute upon it. Same thing would go for a netting operation. A netting operation is complex to set up the first time you run it. But after that it's fairly standardized work. And you do it month and month. You still need to do some ethics deals, you need to do some reconciliations and you need to do some settlements to make that thing work. And we would do that kind of work. We would do the thing that is repetitive, documentable and that gets the treasury to run. And that leaves the treasurer and the treasury managers that are the retained stuff to focus on value adding stuff instead of focusing on operations. You're also leaving this with. You could compare it to a shared service center. Except the average treasury manager in PSG would have perhaps a college degree, certainly would have been in the bank for at least 10 years. If they didn't have that college degree. They would be subject matter experts on what they were doing. It was a very good climate to work, to be able to learn from all these people who knew so much and the camaraderie from people there. This has been close now for 12 years. But I know for a fact that large groups of these people, especially the girls, they go on annual. I think they'll meet up and I meet up with some of the guys I was working with as well. A great way of tying connections and building networks in that industry.

And then that the sort of the offering change that they wound down that what did you. Then they became treasury and trade implementation. How did that move come about? How was that different within treasury terms again for the listeners?

Yeah. So after I worked with operating the products, the next job that I got was to implement these kind of products for our Citibank clients. So our clients would have signed up for, I don't know, Wyrlink, that's check product, for instance, or they would have signed up for sending in payment files over their online banking tool or something like that, opening up a bank account. And I would work with them to do that for them. As the implementations manager, I would be a project manager keeping all the different moving parts onto a project plan and taking it step by step to make sure that all the boxes were ticked and everybody's walking roughly the same pace to get it done on time. Then training the clients on the products that they had or at least making sure that if it was a specialized product that whomever was the expert in training them would do that. So it was an end to end process from the. That the client signs on the dotted line to buy the product up until they're operating it and is starting to ramp up the expected revenues they're expecting to get from the product would be that part of the flow. And I stayed with that for I think three, could have been three years, something like that. Very interesting. That as well. I would say that those two jobs together gave me a perspective though that I thought that all clients, sorry, I thought that all corporates, in fact over a certain size had the treasury and I thought that it would be a Treasury that was quite rigidly documented, followed the same process over and over. I just thought that everybody had a Treasury. And that's, I guess when I left Citibank in 2014 and started meeting companies outside of my comfort zone, I started realizing that Treasuries came in all sizes and all shapes and not necessarily all companies had Treasuries. It started becoming a discussion of explaining to people what it was I actually did. I lived in my little bubble there thinking that everybody knew what the treasury did. In fact, I'd just been living among treasurers and treasury implementation managers for the best part of a decade. So it was a wake up call certainly when I joined Getting it. Yeting has had a Treasury here for a long, long time and it's a fairly sophisticated treasury, currently about 8 people. I'll start by saying a few words about what it is we do, what products we prepared as a group, which Getonia is a company of about 10,000 employees. We have staff in about 40 countries and we fell into around 130 countries around the world. 50% of our revenue is in the United States, 30% in Europe and 20% in Asia. Our product portfolio is. You would see inside of an operating table, sorry, operating rooms. You would in fact see an operating table. You would see that fancy lamp that behind the doctor with many different bulbs in it which is specially designed to make sure that the doctor doesn't or surging, in fact doesn't have any shadow. You would have things like artificial heart vessels that the body won't reject. They will keep you alive while you're on that table. Machines that make you breathe and machines that clean up the tools and equipment that has been used during the operation so that it can be used safely again in the future. It's a wide range of products and we're market leaders in things like the operating tables and lamps.

And so given that you're literally 135 so everywhere, basically it's crazy. You know, the product literally wherever you have operations, you have your product. From the sounds of it what does, what's that like in you know, international terms? And how is then the treasury structured around that?

So the most of our transactions and it comes down to payments. Most of what we look at on a day to day basis is payments. We pay ourselves more than we pay people outside of the company. We make about 50,000 payments internally every month and we make about 30,000 payments to external parties every month. So one of the first products that we implemented was the multilateral netting. And for many years we had a very good relationship with one of our banks, Handelbank and a trusted partner who built a nesting system for us. It's a great system. Unfortunately they discontinued that project about four years ago and we changed to co process nesting which is based in Switzerland, which again I would say it's a very good product and you get excellent service from them. Yes, we've done the internal payments, we've focused on that very much to that. We've then tied our, we've tied our hedging process to internal pavements. So we've been looking at our netting flows to figure out exactly how much should we net now and 18 months into the future.

And with that and your role as a Treasury professional. You know, we talked before the show about automation and we actually met, we were at the Treasury 360 conference in Sweden. I'd seen Hans present, I thought it was a great presentation. Can you just talk through maybe how you that treasury transformation and the automation piece? Because a lot of people say oh technology and it's advancing and stuff but we said it works hand in hand and helps make your job that much simpler. And you've got these incredible, you know, incredible number of transactions. Can you just describe that again, what you see the people listening should be thinking about?

Absolutely. So since we'd already successfully centralized internal payments, we started looking at the external payments, we started looking at a payment factory and we started looking at an in house bank. And really what gave birth to that was that in 2014 the group had decided to establish a shared service center in Krakow. And we wanted to give our shared service center the tool to centralize or uniform the way a rather diversified company was making their payments. So we started looking at different types of payment factories and we started, we quickly realized with the help of some good consultants, Bas Schreibel and Neil Kuking, we realized then that if we attached an in house bank to this, we could start making payments on behalf of can be a lot cheaper and a lot easier to make than the kind of payments you make straight through the bank. So to get down to the nuts and bolts of that, what it is you're doing is it's not really that difficult. Once you get the concept down, it's you collect the payment files from all your subsidiaries, the ones that they had planned on uploading into a bank. We upload that into your system instead our cases, we're uploading it into something called Tracks provided by FIS Global and they change the debit account into. They take away the bank account and they change it with one internal in house bank account that we run in our own banking software called Integrity again from FIS Global. And in that way we have ensured that we can build a shortcut to our own external treasury bank account. So in effect, all the payments start going out from our bank accounts with treasury that we have with our trusted banks. When we're doing that, you know, that was the original scope and when we were doing that, we spent a lot of time choosing the right provider for us. There are a lot of providers out there, they're all good without exception, but some of the providers are more geared towards you as a company is doing and some are geared towards other companies are doing. We're quite happy with FIS Global, they're fitting our profile. So we have made our selection for the systems we were going with and the infrastructure was generating its place when all of a sudden two, I wouldn't say brand new technologies burst onto the scene, but certainly two technologies came to be, they came to maturation at the same time. And I'm talking about Robotic Process Automation, RPA and about Swift GPLA Robotic Process Automation. For anyone who knows Excel vba, it's really nothing new, it's always been there, but you as a user have had to program it yourself. Some people have that, they have the knack, you know, they can go into Google and they can learn few lines of that overnight. But most people don't have that. What the RPA is doing now in products such as Blue Prism or uipath that it's becoming a lot more easy to first of all train subject matter experts, creating teams around products that look the same in company by company. So sort of creating a career path for RPA professional. Secondly, the bar to learning how to do this has gotten lower. I might not able to program Blue Prism. I have had a look with our team, I would be able to do the VBA part of it, but other parts there I think maybe would be, I would need to take a course for the others. I hear that the UI path, which we are also looking at we already have some of these Blue prism robots, about 10 of them. I think we're also looking at the UI path ones which are simpler for people like, like you and me, I suppose, to use program. And we're looking to get a few of those as well.

And when you say, what was that bringing to you guys? Because again, people will be hearing this now, listening to the, you know, the podcast, and I'll be like, yeah, basically, you know, maybe they're not as advanced as yourselves, so that's not something that they're thinking of yet. But, you know, how did that sort of, you know, what does that bring with it? You know, everyone says, oh yeah, bring in technology. But why is it worth all the effort? What's the returns you're seeing?

I think it's a question of whether or not are you increasing the quality of the workers that you have left, or are you trying to remove subsets of your workers by automating their work. For us, and the distinct decision here in getting it is the second part there's, we're not looking to cut any staff or anything like that. We are looking for staff to use these tools to automate the boring stuff. Get that out of the way. The very first process that we are doing here in treasury is very simple. The robot is unattended, no one is looking after it. All it's doing all day long, it's looking at the Outlook email folder and it's looking for an email. And when that specific email comes in, it takes it and it's saves it onto a drive, converts the Excel sheet that is attached to it. It happens to not be able to produce what we actually want and then it sends it on to our in house bank. It's that simple, right? That's a very simple task. And if we didn't do that, then someone would need to sit there every morning and spend three or four minutes to do that task. And that's, that's unnecessary. And if you do that when you're implementing a new system of some sort, if you keep your eye open for all these little bit and start getting them away, you're going to find that you're starting to save first 15 minutes, then half an hour and then an hour per day, that's per person. So you're starting to free up people to do what they're really good at. What we hired them to do in treasury anyway in the first place, we hired them to analyze things, what opportunity.

And the accuracy and the resilience goes up and we will See that I think the more that people then commit to that, they sort of lean into it if you like, the better the results. Only when I've been talking to people that, you know, that's one of the key things that actually, you know, they said my. It's about taking two minutes out here and a minute out there. And I was like, oh right, they said, and then repeating it, you know, if you repeat that 10 times, well that's 10 minutes. So if you got a thousand times, that's a person's job not removed, but actually they can get on and do other more interesting things rather than be drawn down into the not so interesting stuff.

That's exactly it. And I think that's what this RPA represents now is that opportunity coupled with the fact that it's not as difficult as robotics have used to be in the past. We started this in the second week of December and we went fly with our first process last week. That's a very short span of going from we haven't thought of this to we now have implemented our first process. I would highly recommend anyone to start looking into this even if they think that this isn't for them. I think this is something that can elevate, specifically can elevate treasury as well as the various teams that treasury work with against receivables, against payables. Those kinds of teams can have a lot of use from this as well.

And where do you see when you see it before we get towards the end but you know, for the show, where do you see it going next and where do you see your role developing and growing? What's happening for you?

So at the moment we are in the middle of setting up our in house bank and payment factory. Fairly long days and trying to get this thing to fly. The next step of this once we've gotten the technological framework and this has already started now, but the next step is to tie it in together with the key fundamental questions of why we're here in treasury anyway, to make sure that in house bank plays ball with our hedging policy, that the hedging policy is right for us and that the capital structure is what it should be, that the decisions on what capital structure we should have and so forth is somehow at least a little bit automated and making that easier, getting working capital to work that into these solutions as well. So it's going to go from a very technical point and going back to the more treasury, the real treasury stuff that I've had to neglect for a little while now, while I've been focusing on the technical detail and what's real treasury stuff. I'm quite looking forward to real treasury stuff. Oh, I don't know, FX deals and intercompany loans, financing, capital structure, that sort of thing. That's, that's, that's real Treasury. Building the tools, building the robots, it's a necessary thing to do. You need to have your hygiene factors and you need to have your systems in place. But talking to your banks and talking to everybody within the organization, from the C suite down to the factory floor, talking to them about cash, money forecast, that sort of thing. Yeah. Adding that sort of intellectual level of cash to the organization.

Awesome.

That's really trash. Really.

And again, you know, you've got this strength in your background and everyone's heard of it through the show, but if someone, you know, new to it, I said to you before that sort of. Within Europe in particular, and a lot of our listeners are more sort of treasury manager analysts, a lot of the people you know overseas are more treasurer level. But if someone were to look overall at your background hands and say, oh, do you know what? I'd like to have a similar role to mine. I'd like to follow a similar career path. What sort of. Would you pick out from some of the roles you mentioned earlier? You love the role in Treasury Solutions Group when you're at Citibank, but then you've got this role, what are the things that you would pluck out of those and the tips you would give to people listening today? Actually, this is what you should be thinking about. And if you wanted to have a similar background to you, would you say.

We usually say that in treasury, people either come from an accounting background or they come from a banking background or they come from elsewhere. Those are the three usual paths. And there's a certain truth to that. When you look at what I would look for when hiring people into Treasury, I would look for someone with integrity, someone who knows who they are, who don't mind admitting when they've done something wrong. Right. You know, someone who immediately when they discovered they've done something wrong, raised their hands. That's we can have a discussion around it and prevent it the next time. That's the first part. The second part is it's one thing to have an intellectual discussion with your peers around what it is you're doing, trying to place yourself in. Why are we doing these processes? What is it we're delivering? Who are we delivering it for? Is it the shareholders? Are they the reason we're doing this particular task and constantly evaluating what it is you're doing. Because what you're doing is you're managing risk. If you don't have that conversation constantly, the risk of risk is that you don't recognize that a new risk has arisen or that an old one has ceased to be. You need to be careful with how you spend your risk. Limited resources. And the final thing, I guess I would look for someone with a bit of personality, someone, someone who has a night laugh, maybe, you know, who's nice to work with. So what tips would I give to someone looking to work with Treasury? Well, by yourself, to a certain extent, you can, you can learn treasury, you can study treasury, unless you're interested in it, unless you find that this is something for me, that's something, you're not going to be happy in it and you're not going to deliver the results that you want for yourself or the results that I want to see.

I scribble notes here every week and it's like in this case, as you hardest, don't be afraid to make mistakes. If you do, put your hand up and correct them or help correct them and everything else followed by being yourself, being open and show your personality. And then, because, as you say, the fact is we're, you know, we work long days, you guys work long days in treasury and it's a long time not enjoying yourself and not being able to be open. There's only so long you keep going if it's, if it's not going to work. So, yeah, yeah, that's it, Hans, amazing, amazing advice, I think, for everyone. If you do want to connect with Hans after the show, we'll put his LinkedIn profile in the show notes so you can connect over there on LinkedIn. It's been great. You will see both Hans and I speaking at a variety of conferences, I'm sure, throughout the Nordics over 2020, which would be good to see and, you know, all that remains for me to do is say thank you for your time today, Hans, it was a really good one.

Thanks, Mike. Always a pleasure speaking to you.

And you, sir.