Why Bravery and Enthusiasm Are Crucial in a Treasury Career with John Jackson

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, I'm joined by by John Jackson. John recently retired as the Group Treasurer of 7 Trent after over 30 years in corporate, treasury and banking. Highlights of his career, as we were talking about earlier, include working in Hong Kong for M and S, finance Director of the Treasury Division at Halifax Building Society during the period when they converted to a bank, and was also part of the team which enabled the solvent restructuring of British energy a while ago. John himself is looking forward obviously now to spend a bit more time with family, but also more importantly with his collection of guitars, which we'll probably talk about later on with the show. But, John, take us back to the beginning, if you would, and how you first got your start in treasury. And I know as a young lad many years ago. So back over to you, sir.

Yes, many years ago, last century, in fact, of course. And yeah, I had no great aspirations at school to anything in finance or anything. I think if anything, it was all about possibly joining the navy or something like that. Went to university because that's what my mates did and I did an economics degree and it really just sort of progressed from there. When I came out of university, I still didn't know particularly what I wanted to do, so I hedged my bets and chose Chartered accountancy and from there went to Pirates Waterhouse and from there to Marks and Spencer, which I had a fantastic time for a few years working overseas mainly, and in particular in Hong Kong.

That was early days of your career, but quite unusual to make a move quite early, that early. You know, nowadays people perhaps choose it a little bit more, you know, to go over. But if you look back at a number of the people I've spoken to on the show, they wouldn't have said, all right, joined mns, but actually I was in Hong Kong. So what was that like for you? I talked to a guy on the show recently, he'd been. One of his earliest roles was suddenly FP and A in Vietnam and the early stages of his career. And he said it was great because it made him for later. What was that like for you?

I think it's fantastic opportunity. I mean, M and S was going through quite an overseas expansion, so you were sort of at the vanguard of things as far as Their strategy was concerned. I was still in, I think I was 27 when I went to Hong Kong as financial controller. So it was a terrific responsibility. But you always had the wealth, the power, the resources of FTSE. I think it was FTSE 10 in those days, company behind you. So you only had to lift up the phone, shout help down the line and someone would come and. And do that. So he was part of a management team that we just set up. We were building our own stores there. It was the start of M and S moving away from selling mainly UK merchandise. And so there was a lot of people coming over looking at, you know, Far Eastern suppliers. So it was. I was just incredibly lucky to be there. Hong Kong's a great place to see the rest of the Far east as well, places like Malaysia, Singapore, Philippines. So it was obviously, I didn't want to come home, but M and S had a strict policy that you did two year tours of things and I felt you had to move on to something else.

So you returned and then Halifax beckoned. What was that?

That was not, I would say, a complete 100% career move. I was very happy in MS, but working in London, commuting up to Baker street, personal circumstances was that both my wife and I had had flats at the time of the property crash and we were sitting on negative equity. And Halifax Building Society had a sort of the opportunity to go and live in West Yorkshire, out in the Pennines. And some are really nice. We had just had our first son. It was interesting place to go and work. I really liked the people and more than anything we moved from a one bedroom flat to a house in the Pennines. So it ticked a number of boxes. But, you know, if you look back on it, that's purely a career thing. Move from Deputy Treasurer Marks and Spencer to what was treasury financial control at Halifax. It was slightly odd. It really worked and in the long term it worked out fantastically.

And also it was an interesting time because it was when I was first starting my treasury recruitment career and there was a thing called. And people won't understand this, but you and I do, But Halifax and HBoss and there was, you know, different parts to it. You'd made the move from a corporate treasury and we'll talk about this because you. And then went to Banking treasury, but with a corporate twist and then back to sort of. Then there was Angry Water and various other bits. But what was that like? How did your brain react to, oh, hang on, I'm now not in that corporate with M and S Obviously high street retailer again for perhaps some of our US listeners and things like that, you know, M and S, itself a massive retail chain. And then making that move, what was that like?

It was a very, very different culture. Halifax building society was, you know, a mortgage factory. Largest building society in the world, the largest mortgage lender in the UK, steeped in transition like M&S, I guess, 150 years plus. And really the business model hadn't changed that much in terms of the treasury aspects. You know, some of the things were very familiar to me, the funding aspects and the way that it was very corporate in its focus. We were not as a building society profit center. We were there to supplement the funding that was coming from retail deposits and do some risk management stuff around the edges. But it was great. I mean, I would recommend for anybody that wants to have a Treasury career, don't shut yourself up from the idea of actually might be said, going to the dark side, going into banking for a while because you get a completely different view of how things work, how banks look at corporates. And that can be really invaluable to you going down the line. There's things that banks do really well that corporates are only catching up with now in terms of things like risk management, quantification of risk. And so it didn't do me any harm at all in the long run doing that. And I think I learned an awful lot from the, from that time as well.

I sometimes talk as well just before we move on in the career, but just bring out that piece about banking, treasury versus corporate treasury. And people said, well, I can make the move across. How would you comment on that? I mean, what I mean by that is you've gone from the corporate to banking. And I then get, particularly at the moment, given the state of the markets and things like that, lots of people saying I want to come back from. They haven't had any corporate treasury experience. They want to make that move. What they need to think about or what advice would you give them?

I think the first thing is that in a typical banking environment, and this is where Halifax migrated to, it started off as a state building society but with 40 people and by the end it was 400 people and I left. And they're very much a profit center. If you're talking about people in that sort of environment, then you have to adjust to a corporate treasury environment, which is not about making money, which is not about short term return, it's about risk management, it's about relationships and it's all the rest of it. So I think it depends where you are within the bank because obviously within the banks have their own treasury functions to fund the bank. And I think that would probably be a bit easier for people there to move into corporate than it would from say people on a front office desk trading Eurobonds or something like that. To move into corporate directly. I don't think it's impossible. I think they've got a lot to give. But it's understanding the different view of the world that a corporate has compared to.

Yeah, that your main product is a product versus the main product of a bank is money and the usage of it as well. That's. And so you. Then we won't joke about being the dark side because I've done it so many times and I don't really mean it. They're just different ways of looking at it and you know, different lenses if you like. The move from, you know, Halifax and then you decided back to a corporate. How did that come about?

Halifax Building society become Halifax PLC. I actually left before it moved to become HBoss, merging with bank of Scotland. So I'd been the finance director of the treasury division for six years and then moved from that role to be sort of head of funding in capital markets. And it was a time when there wasn't a lot going on. Basically I think I did two deals in two years. I was very, very quiet and it didn't look like it was going to change. There was a massive emphasis on the bank, on taking in retail deposits, corporate deposits and not in terms of medium term funding, which may have eventually been one of their problems. But anyway, the sort of corporate treasury loomed its head again. I kind of missed some of the things used to do, particularly M and S. And the Anglian opportunity came along which was also quite interesting because it was involved in actually reorganizing the company and then getting into a sort of whole company securitization. It was something technical that I could really get involved in as well.

And you've got. Then, you know, and people were here some sort of moves within the utility sector in and out and stuff like that. What was it like making that shift then to. From. How can I put it from. From a bank to a utilities company, you know, because that must have been a cultural shift spotlight, you know, however you want to call it.

I think there is some similarities. There's always seem to be common threads, whether it's treasury aspects which depending on what organization you have, there are certain ground rules that you apply no matter what the organization Is. And also those organizations had some similarities in that, you know, you had a building society transitioned into a bank, but it hadn't really completed that process. You had a lot of people that were live for building society people. And the same with the water company. Ten years previously it had been privatized, but there was still a lot of people who were in that sort of quasi public sector civil service. There were some similarities there, but I think that's part of the challenge. I don't see why, you know, anyone should want to label themselves as, I don't know, a utilities treasurer or whatever, because I think part of that moving around has given me much more resource to draw on when you're dealing with a particular, particular problem, rather than perhaps having a more narrow approach. It certainly just worked for me. I'm not saying it works for everybody, but I never got phased by the fact that I was moving from one sector to another. In fact, I thought it was a bit of a new challenge, really.

Yeah. And I think it's that exactly a bit of that sort of more rounded view of treasury enables you to draw from different strings from different experiences.

That's right, absolutely.

So you got there, you did some of the reorganization. Angry water. And then he thought British Energy and as I described in things, solvent restructuring of British Energy. Do you want to give us a, you know, give us a whistle stop of that, sir?

In Lock, Stock and Barrow they call it. It was emotional and it was very emotional. The restructuring of Anglion was coming to an end and you know, the water sector, the water business was being hived off and the non regulated businesses were there and we were getting them financed. But it wasn't looking as if there would be an awful lot to do post that. And along came Brit Energy and that was an investment grade rated company for those that don't know what British Energy was. British Energy was the company that had been privatized and owned the eight nuclear power stations. They were the last bit of the electricity sector to be privatized, primarily because they were quite problematic with all the decommissioning and the other problems or challenges that come with nuclear power. It was the last to be done, but it was up and running. It was a move to Scotland which I'd always fancied moving out of. You know, I think was something the family were up for as well. We do like to walk and things. It looked good. It was, as I say, investment grade rated. It just paid a dividend and off I went up to East Kilbride in Glasgow to become group treasurer. Well, within three or four weeks, it was my first banking facility was actually arranged with Her Majesty's Government. The Board had decided that because of the changes to the electricity market that just taken place, the market price of electricity had fallen well below what British energy could generate power at. And because it's nuclear, you can't just switch the power stations off. Well, first off, because it's 20, 20% of the UK generation, and secondly, because it's still very, very expensive to keep nuclear power station not generating the fuel elements very, very, very small. So the upshot was we were running out of road very, very quickly, which was an incredible shock to me. Don't think I'd ever thought about what it would be like to actually be in. Be in charge as treasurer of a company that was sort of falling apart at the seams and in our case, very, very rapidly. So I spent the next two and a half years, absolutely fascinating time with negotiations with the creditors, basically, and Her Majesty's Government and a few others, to basically keep the company going and then to refloat it again, which we did successfully, I think, in 2005. It was done.

So, John, from there, what would be your one sort of takeaway, if you like, or if someone is going to go through that? Was there one thing you focused on, or was there one thing maybe you focused on? Then you walked away and went, wow, I learned this. This was key. Someone says about cash, about liquidity, about relationship management, what would be the one takeaway you would give people, or a.

Couple, maybe one is related to treasury management. And that is. I have never looked at documentation the same way since. When we went through that process with what seemed like an infinite number of different lawyers pouring over the company's funding documentation, you realized how critical it was and how if something had been wrong and there were elements that were wrong, how much difficulty that could give the company and the creditors and everything else. So I've never taken lightly since. And it's been commented, john, for God's sake, stop being a bore about this documentation. And it's because of that. It's because I had to go through the repercussions of slightly flawed documentation. So always look at your documentation and always ensure that it's as good as it could possibly be. But I think also from a personal perspective, I really kind of learned a lot from that. I learned mainly about that, actually, when a push comes to the shove, because this is not an easy time for anyone, a lot of information is demanded very quickly, a lot of decisions have to be made quickly is that you can rise to the challenge. I remember one particular weekend we were working and I had to present to I think it was around 50 bankers on a Monday morning. And bear in mind I was not that familiar with the company myself. I'd been there about eight weeks at the time. This was a complicated project financing on a coal powered station and I had to take them through our proposals for how their debt would be then brought into the mix with everybody else's when it came to the restructuring. And I had to do that over about a 45 minute period without going through each slide and everything else. And I always look back on that and I think perhaps, I'm sure others would do the same and say if I could, I got through it. I was absolutely nervous as hell mainly about what sort of questions I could get afterwards and thinking if I can do that, it's made any presentation since any board or anything else so much easier because I can just think back to that and say it can't be as bad as it was when I had to go through the EGRA power station to my site.

Yeah, you just like what doesn't kill you makes you stronger.

Yeah, exactly, exactly. So yeah, I think I went from being what on earth does this mean? I'll just move my, my family up to Scotland. Do I have a job anymore? Do. Are people going to blame me? I know I've only been here five minutes but I am the treasurer thinking about all of those things or what hell's going to happen now to one where two and a half years later I think it was probably the best two and a half years of learning I have ever had, both as a, you know, as an individual and technically.

You needed a stiff drink, didn't you? That's what you really needed.

I was in the right country.

It's like comic gold. And then you made a move to Scottish and Newcastle. Maybe again you can explain what that move was like.

Yeah, well I've always wanted to work for a brewery that was part of it. Again, a bit like Anglian. When British Energy came out of its restructuring process it was very much constrained about what it could do in the future. So the government had put sort of rules around and the EU in particular, in order to get state aid, we had to commit to cell power, some start power stations or had to commit not to buy anymore. All of that really put a straight jacket around the company and all the financing had been put in place and there was really not a lot for me to do. But and also I didn't want to move from Scotland. I wanted to stay in Scotland. And there aren't, you know Mike, not a lot of corporates in Scotland.

Oh no.

That can support a treasurer. And therefore up came Scottish and Newcastle. That was where we moved. Move from one side of the country to the other, from Glasgow to Edinburgh.

And obviously a very difficult move to persuade you to come and work for as you say, a brewing company with beer wash and things like that. Obviously, you know, you were just getting in there to taste the product just to make sure for qualitative purposes as we know, you know, we both say this. What was it like? What was that movie like?

It was interesting. I mean I think it was a business and I lost contact with the brewing world not as a consumer but as someone in the finance side. But certainly at the time, and I suspect it is now, it's one of massive consolidation, a declining market and we had the smoking ban in Scotland which really did for the entree bad, very bad things. And it was coming in England so there was quite a lot of restructuring going on. Selling of the pub business, we sold the logistics business as well and it was one of sort of maximizing the balance sheet to withstand the pressures coming from the commercial side so that we didn't go sub investment grade. The company was pretty highly geared but at the end of the day we were the weakest of the large brewers and Heineken and Carlsberg got together and took us apart basically between the two of them and made an offer that eventually got to a certain price that the board felt was comfortable with. And. And that was the end of Scottish Newcastle.

And so after that and the brewing group obviously you were doing your tour of Scotland in a bit of a journey around it. You sort of went and joined Weir Group. So maybe talk us through that move.

Yes, certainly. So hosts effectively being made redundant from Scottish and Newcastle post the takeover. We are group. I was very fortunate, was looking for a group treasurer as well. I actually became I think the first full time treasurer there. They. They'd employed a lady, had done a fantastic job on an interim basis but I sort of moved in to be group treasurer there. A very company embedded in history with the Clyde shipbuilding industry but really going places with a lot of investment overseas particularly in the US and particularly in oil and gas and fracking which is back in 2008, 2010 area was all good stuff and fracking was nothing to be worried about and. And of course nowadays it's completely different and it's an industry that's now in decline. But at the time it was going places and we was going places. And very soon after I joined we got into the FTSE 100 and did quite a lot of acquisition related funding as well as sort of global cash management that we were in. I think it was over 70 countries and some of that was quite challenging.

John, one thing we haven't really touched on and because I just, I think it's an interesting journey and I didn't want to interrupt it, but you've obviously coached a number of teams. You know, we're going to come onto your next X role where you've got this massive wider brief on team management and things like that. But before we did that, obviously a lot of treasury teams are. Sometimes you're a solo treasurer, you know, just you, yourself and I and, and everything else. And then other teams you've got, you know, different sizes of groups. Just looking at maybe we're. Or some of the other bits you, you've, you've coached and managed teams. What are, what sizes have you gone until that stage, if you like, up until this role and including this role?

Yeah. Well, I guess the biggest team I ever managed was when I was at the Halifax. The finance credit risk teams that I looked after. I think it was about 80 in total and that went down as low as 3 or 3 or 4 and all with very different challenges.

Okay, but you've said you've managed these larger teams and things like that and small up and down. But what's your ethos around team management again, for people listening, they might be treasury managers, first time to manager, treasury analyst or something like that. What would you. Tips for success? You know, is it good cop, bad cop? You know, sometimes when I'm managing and I work with Joe, my junior guy that's coming with us and I sort of trying to give him positive feedback, some critical stuff and then, you know, soften it with. And then looking at the positives and where we would come out of it. Is that your kind of ethos or where did you, where do you do it?

The way I do it is. And I ask myself this question whenever there's something good or bad that you have to convey to somebody else and that is, how would I like it? How would I like to be treated? Yeah. And I think on the whole, I mean, you know, it doesn't always work because, you know, everyone's different. But if you try and be fair and honest, I don't think there's anything hugely complicated about leadership. I think it's about setting a good example. People are only going to be, I always think, you know, they're only going to be as good as you are in terms of your behaviors. So if you set bad behaviors, if you have one more for them, one more for you, then you're not going to get anywhere. And if you are dishonest with people, if you're not open or as open as you possibly can be with them, then you want to lose their trust. I think if you can engender a team spirit of being part of the team. But being a leader is difficult, as you know, because you can't be one of the boys or one of the girls or whatever. You've got to be slightly aloof, but you can do that in a nice way and make sure that you're consistent as well. So, you know, you're not all matey with them one day and then absolutely doesn't want to talk to anybody the following day. It's consistency, honesty and setting a good example. I just, I'm not saying I've always got it right by any means at all, but I found those three very, very simple things to really help me.

Well, I'm going to make sure they go on the show notes because I think that I'm not going to paraphrase them. I think they're brilliant and I think actually that's where. And I'd concur, you know, that's exactly. I think the message is how would I like to be treated? You know, and I think that's always the watchword I've gone through. And we recently had our 150th podcast where we were all talking about our ethos around recruitment, you know, particularly deep dive in there. And that's one of the things that I just always thought, you can't go wrong really, you know, just if you just think exactly that way. And I think that's a, a great thing from yourself for treasury professionals out there. So, you know, listen to the way John does it. So we like that. And then you, well, you had enough, you'd done your Scotland, you, you got your, you got your miles on the clock as it were. You've done most of each of the big treasury roles up there and it was time for this move before you finished. So what led to that or talk us through?

First of all, it was domestic thing. My wife wanted to come back to England because we wanted to live close to my father in law. He just recently had his 90th birthday. But my intention was to stay at Weir and just commute back at weekends and do a few more years at Weir. To say I must be very, very jammy lucky, because up popped the seven tran roll within two months of us moving down here and seven Trent. Well, we live in Northamptonshire and it's. It's a 30 mile drive for the.

Listeners, again, that have, you know, uk. We know, we know a lot of people will know seven Trent. But again, two thirds of our listenership and big shout out to you guys there in the US come from the us, which is amazing. Who and what seven Trent, what do they do?

So seven Trent are like Anglian. They are a water company to provide water and wastewater services. Our water industry is divided geographically, so 7 Trent looks after the Midlands up to the Peak District, so kind of the middle portion of England. So one of the. I think it's the third largest water company in the uk.

Then the role, as you say, the sort of role came up, if that's the right way. What did it offer you? Bar be a bit cheeky? Oh, it's a move close to home. Good. Group treasurer. Big group treasurer job. Yeah, I'll take it. What was it about that challenge? Because I know that there were lots of different things with the different funding and things. You're an experienced treasury head, so that you're going to get thrown this. But what did it offer you in terms of challenge? I know there was the logistical thing, but it wasn't just that, was it?

No, no, not at all. We was running out of steam a bit and unfortunately that has continued because the market that they put in, significant investment in, the US fracking market, has really waned as oil prices have fallen and the water sector has become a lot more challenging. Since the time I was Anglian in the beginning of the century, the regulator, the model that's set to pricing is far more demanding now than it was then. And other issues have come up, such as the whole pension debate, defined benefit, pension schemes. I think funding is. The level of funding has increased as well. So it was presenting a lot more challenge than perhaps it would have been sort of 15 years previously. I think of all the things that I've done within the treasury sphere, funding is the one that gives me the most interest and pleasure, because you do feel as if that's the thing, you're almost providing the blood transfusion to keep the company going. And in the case of 7 trend, which has over 6 billion of funding and an interest bill close to 200 million a year, you're a Significant contributor to the bottom line. So that's always been my favorite topic and that was there in spades with seven treasure.

And I get a lot of pushback sometimes. It was one of our deputy treasurers I placed for a FTSE 50 and they were absolutely desperate to have no, I've got to do bonds, I've got to do this, I've got to do this. And the treasurer at the time, as she said, she said, mike, I don't understand why she wants this. She hasn't got it on her resume, on CV and she really wants this and stuff. She went. When she discovers it, actually, you know, well, there's a lot, there's some interesting stuff, but it's mostly quite boring because you do all the structuring, get it and then when it gets the interesting signing, you hand it off to the lawyers, they close the door and then afterwards they said, right, we're going out for lunch, can you just do the documentation now? Thanks very much. And off you go. It's obviously different or what would you say is the, you know, the key part about that? And do you think that, you know, when you've looked at hiring people that you've always looked for that sort of background or been more flexible than that, would you say?

There's so many facets to the funding. We talked about documentation how important that is, but actually these days it's more about understanding your investor base and finding new investors, particularly in this water sector where the funding level is always going to rise. So you've got more new funding to do and you've got renewing, refinancing to do as well. So you've got all those aspects, making sure that you've got different investor bases, have different maturities, that you've got the right mix of fixed, floating or index linked or whatever. I think it's a fascinating area to be involved in. Now, who does that? Well, who are the good people in that? Well, I don't think you necessarily need somebody with huge amounts of experience to do that at all. And I think this is more common to treasury people generally, not just in funding, is you just need somebody who's very, very curious and has bags of enthusiasm and energy because that gets you. I mean, obviously you've got to be numeric and all that stuff, but it's about enthusiasm and curiosity and I think also more so now, being good with people, being good with investors, being good with rating agency people, being good with bankers, getting them to understand your business. And also internally now with funding being more ESG focused as well, bringing all those facets into play as well, because investors are very demanding about that sort of information flow and what they're putting their money to work in. And also much more demanding from rating agencies as well. So that's my view.

And so, you know, on today's episode, you know, it wasn't really the right way to sort of then talk about the future of treasury per se, because I think we've already alluded to that anyway. I think it was much more, you know, wanting to go through that chronicle of your career and people picking out really interesting things. But we do have, you know, a number of different listeners across the world that are going, you know, maybe beginning of their career. So they're sort of treasury analysts making those first few moves. So maybe some advice for those guys. Some treasury managers so senior, they're making a step up the curve. They're coming there. And then we've also got some of the war stories, you know, and we don't need to deep dive those, but, you know, just some of the advice that you might give. I think you go some great stuff there about, you know, treating others as, you know, when you're there, as the. The gt, you know, don't have to be the, you know, best friends with the people, but, you know, really that collegiate sort of ethos. Enough talking from me. We'll put your LinkedIn details in the show notes. But what tips would you give to people, you know, that are listening today?

I think the first one is to be brave, but I've had a, as you've seen quite a varied career and sometimes been up against it at the time, been very nervous at times about outcomes. But actually I think the maxim is just to go for it, just to push the boundaries as much as you feel comfortable with and perhaps beyond that as well, because I've seen people that have been highly successful, that have had pretty indifferent or worse times in their careers, but have managed to recover. So be brave, take the challenge, do something different. The second thing I would say is actually enjoy it because we're at work an awful lot of time. Treasuryman is a fantastic opportunity to meet new people, to go and challenge yourself technically. So don't get in a. In a rut. Make sure you're enjoying your job and if you're not, make sure that you're doing something about it.

Yeah, amazing advice there from a treasurer with so much to offer and, well, enjoy your collection of guitars and, yeah, getting the guys to listen to them. You know, some of the tunes coming from that. We were just talking about your Fender. Nice. And you know, a bit of, bit of guitar jealousy there, sir. Enjoy it. John, thank you very much for your time and the advice you've given. I think the guys are going to really enjoy it. And again, you know, do connect with John. He, you know, maybe doing further things and stuff and it's a. He's a great person to have in network. So thank you for your time today, sir.

Thank you very much, Mike. I really enjoyed it.

Thank you.

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 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.