Why Networking Is Key to Building Your Treasury Skills with Alan Goldblatt

FOREIGN.

Welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to them about how they've built their careers, where they are now, where they see both themselves and the treasury profession going to next. Let's get on with the show. This week's show, delighted to be joined by Alan Goldblatt, the vice president treasurer at Farmer Mac. Now Farmer Mac, for those of you don't know, is the Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac, stockholder owned government sponsored enterprise or GSE as it's known in the US Created by Congress to improve the availability of credit for a long term credit for America's farmers, ranchers, homeowners, businesses and communities. Now we're really going to get into that a little bit later in the show, but again, we're on a time limit today. So I want to get the most out of Alan and get him doing all the talking as always. Alan, if you would take us back to the beginning of your career. I know we've got some interesting moves through, you know, more recently government and everything else. But before that you originally qualified, you did your degree and then took us through from those days. And then we'll walk through and get more information come up today. Over to you, sir.

Well, thank you, Mike. I really appreciate being on your show. My background starts with I was a chemical engineer and worked in the oil industry and quickly realized that, you know, what I was really interested in was the economics of running an oil refinery versus, you know, the actual engineering aspects. And so I went to business school, the Darden School at uva. And it was there where it opened my eyes to, you know, what the world of finance was really all about. It. I felt it was something I was missing along the way in my prior career studies. So with my mba, I went to work for Mobil Oil and started out in the in the oil commodity side with transport and operations and all that was great till I realized I really had a passion for once again going deeper into now finance. And what I ended up doing was going from being involved with understanding the whole trading of crude oil to joining the Treasury Department over at Mobil. And that's where I really got exposed to the capital markets, swaps, derivatives and all new things that were happening.

Alan, why was that so interesting to you? I mean, I know that we'll touch on that as we go through the show, but why is that a passion? Is that just that you just love all things financial risk or what does it for You.

Yeah, it was a combination of being in touch with the markets and understanding how the markets and the economy around the world because of course, mobile Global. And it really opened my eyes to all those economic indicators that come out all the time, were truly fascinating and actually had relevance to the things we were doing at Mobile with managing our risk. And it was, you know, the, the. This is where actually my, my background in engineering came into handy as well because I was also able to, you know, truly understand not only the hedging, but the, you know, stochastic equations behind the, I would call Black Scholes types of calculations that, that go on with respect to, to financial derivatives. And we were, we were definitely very, very, very involved with, you know, understanding, you know, that whole aspect. So I would say it was, it was interesting because it was a combination of a number of items within my career that, that all came together when I was at Mobile.

And again, interesting working within that kind of industry versus some of the other things that you've done. You're obviously big numbers, you know, and I've spoken to a number of people at the, you know, similar like the shells and everything else. But did you feel that you were making a real difference or how did, you know it come about that you thought, right, it's time to make the next move? How did it come about from there?

Well, for me it was, you know, more, more that, you know, upon the merger with Exxon and Mobile, you know, I figured it was time for me to figure out what the next step in my treasury career would be. And I realized that there was gap where I truly understood the markets. But, you know, there was areas that I wasn't involved in, such as cash management, M and A in particular, as well as, you know, areas regarding the different type of industry altogether. So from there I went to a company called American Management Systems and was an IT consulting company. Eventually I worked my way to become the treasurer of that company. And I was so into the M and A world. It was truly fascinating to me because. And that's also where I really got involved. And this is another area that I was not involved in. Priority to, you know, financial reporting and how much that matters, you know, with respect to not only financials, but also, you know, the treasury and working with rating agencies, et cetera. So once again, that was an area that opened up my, you know, career path and expanded my toolkit of things I was involved in. But I then realized that there's one aspect of my career that, you know, is kind of lacking in that My prior two jobs in, in the world of finance, I was not at a finance company. And, you know, one of the things that happened with American Management Systems or ams, worked very hard to sell the company. And at that point I moved over to Fannie Mae. I was there during a very interesting time with changes in management, changes in, you know, the way risk managed. Everything was risk managed as, as well as eventually the government taking over control of that company.

Can I jump in there and just ask, you know, went into it with your eyes open. It was a challenging time for the group. And again, we're not going to deep dive in that. But what I mean, for you as an individual, you come in with that and it's more the human aspect. How did you cope? You know, what is it like in that environment? And how would you, you know, because there might be other treasury professionals in a similar situation or facing that, you know, certainly tumultuous times in their markets the past few years, but, you know, how would you say that, you know, what should they think about? How should they do it?

Well, there's a couple of aspects here, and one is that the work we did at Fannie Mae or I was involved in was, was truly fascinating and also, I believe, was doing the absolute right thing in helping homeowners in, you know, throughout the United States. And it, you know, had a, we had an environment while I was there and it was, it was to learn and to help one another and to push boundaries on, you know, truly understanding the risk aspects with regard to, you know, financial that, you know, the company had. But the question is, how do people, you know, cope when there's, you know, when you have bad press or, you know, situations are, you know, kind of looking grim for the, for the industry as a whole is to me, it's, it's be aware of what's happening around you and why it's happening. And at the same time, when you see things, it's great to speak up and because people will listen, your management teams will listen and, you know, make changes. And this goes for, you know, the health and welfare of individual employees to things that people are seeing on the ground that, you know, they should be encouraged at all times to, you know, speak up if they run across things that, things that may not seem right or could be problematic in the future. And it's better to have those discussions upfront before it's something out of one's control.

Yeah, as I said, you went through that tough period. But then it was interesting, the Department of Treasury, what Was that like. And a bit of a shift?

It certainly was. I really was interested in, in making a difference for housing finance reform. I was doing that at Fannie Mae to a limited degree. And then I learned all about the wonderful things that were going on at the Treasury. This is back in 2012 and I joined the Treasury's capital markets group and the team there was all about working on what's happening in the capital markets that traditional treasury doesn't necessarily look at. And it was make a difference for policy as well as, you know, really dive into, you know, merging items and, you know, so for the most part there I was very much involved in the housing finance reform, learning all about it and trying to make a difference there. And then also while I was there, it turned out that there was a need to really focus in on risk managing or understanding the, the student loan portfolio that the Department of Education manages, but it's funded by Treasury. So it was very interesting to be very, very much a part of, you know, certain efforts that went on that, you know, truly made a difference for, you know, student borrowers.

What was it like? You know, you'd gone from that, you know, some exceptionally corporate environments, you know, so very much public companies and everything else. And then you're in that. And you and I talked about this. So, you know, you know, I'm looking back at my notes and things and thinking how different that was. Did you find it a different way of being or acting within the job itself because you were sort of giving back to the, you know, the student loan portfolio, sorting those things out and stuff like that. How did it feel differently for you as a Treasury professional, would you say?

I learned quickly and this is something that is not spoken about too much, but there's a, there's a fundamental difference between a private industry or whether or not it's public or private company, but industry versus the government. And really what that difference is in a nutshell is that in an industry, basically the corporate management can do anything they want as far as investments as well as building out their company and the ways and into the market, unless there's a law against it. The difference when you're in the government is that you can do anything you want as long as there's a law or regulation permitting and funding that activity. So it's a fundamental difference because many people would come to the treasury from the outside and say, oh, treasury should do. XYZ sponsored this program and that, and maybe a great idea, but if we don't have the authority to do so then it doesn't quite happen or it happens in a delayed fashion because until the funding gets appropriated. So to me that was a key learning while I was there. It made it difficult coming from the corporate environment to move things quickly. However, the key for working with the government was really understanding the perspective that the government was approaching problems. When I was at Fannie Mae, we approach it in a very logical financial minded way and say, oh, we could do this but it doesn't make sense because of all the money would be lost. And you go to the Treasury Department on the exact same issue and the differing view was well, it may be uneconomical today, but the last thing we want to do is have the government, for example, bail out homeowners again, et cetera, or bail out the corporations when things go south. And so it's a very different approach and focus, more focused on the very long term and the systemic risks versus most corporations are focused on, you know, the risks that they see, you know, coming up in the near term and in the, in the, you know, next couple of years.

And you move from that to renewables. So obviously, you know, one of the, I'll tell you what, you explain Terraforma or terraform, however you say it.

Yes, I was fascinated to move back at certain point back into, I would say the private industry. It's a publicly traded company, Terraform Power Renewable Energies in the US and its sister company Terraform Global was also doing renewable energies in emerging markets. It was fascinating to be part of that. Unfortunately, the timing of my move there in 2015 was a bit challenging because that was exactly the time where oil prices started plummeting and the economics for renewables weren't quite there. But what it did for me was it got me back right into, you know, the treasury world and also into long term foreign exchange contracts and exposing me to many things that I had not been exposed to in several years. I then realized that an opportunity came about that to become the treasurer at Blackboard. And Blackboard is an ed tech company. And I was there for four years and you know, even though I was not that close to that quote, unquote capital markets, being a treasurer for that firm was, was truly, truly for me, career building in many ways. Once again I got involved in areas as the treasurer in item or areas or focuses that I would not necessarily have, you know, hadn't encountered before. Some examples are, you know, running the procurement running, you know, insurance program. And also I got involved in accounts receivable. And these are things that, you know, Treasurers typically don't get involved in. But what it did for me was in addition to all the treasury work that one would have, it really helped me, you know, more fully understand the finance function. And the final thing, you know, at Blackboard, it was, you know, it was a company that also had to do quarterly reporting and I was the person handling all the investor relations with our debt investors. And that once again, was another area that really helped me understand the importance of a treasurer or a finance function, of truly understanding the business and being able to explain it to others as well as the future strategies.

That's something you've taken on in this current role. Not giving you a break here because it's, you know, I want to rock it through and get the most out of you. So it's apologies because it's also been a while since Alan alive. We first spoke a number of months ago and as I explained to my colleague, I was saying I really want to get him on the show. And I know that you've been very kind to give us your time, but I know that there's some other great nuggets there and what I was going to say. So you then may made the move to Farmer Mac, which again explain what Pharma Mac does. You know, I did my research, but you then described it to me when we first ever spoke and I was like, all right, okay. And I said, well, why do you do this for all the farmers? Or can they not just go to the bank and get a loan? And you were sort of explaining it very well to me as a newbie to the sector, as such. What is it? Who is it? Why is it important?

Would you say Farmer Mac federally chartered and it has a mission, a goal to provide a source of funding, a secondary market to banks and financial institutions that lend to both farmers, ranchers and to. For rural America. Now there are, you know, very, I would say, very specific areas that we can invest in and, but what essentially we do. And this is kind of analogous to the housing, you know, GSEs like Fannie Mae, Freddie Mac, where they're able to, you know, buy loans or securitize loans, you know, to take the, the capital needs of a bank that is providing the loans, in this case farmers, ranchers, by us buying the loans, we're able to give them capital relief such that they are able to make more loans and more loans. And so that's what Farmer Mac's out to do, is to really help what we call the secondary market and mortgage, I should say agricultural mortgage. Finance as well as in the, call it in the rural infrastructure and that would be, you know, electricity and you know, renewables as well.

And so sorry, Alan, why is it so needed? You know, why is there such a requirement for this sort of thing? And again, I touched on it. Again, I'm looking back on my notes and I thought you gave some great explanation before.

Well, essentially, you know, any financial institution that makes loans are, you know, capital constrained and you know, sometimes liquidity constrained. And in order to be there for the farming community, for example, those banks or associations are really there to help rural America and the farmers do what they need to do to make affordable living in business opportunities with their farms. And in order to do that, you know, the bank has to, you know, let's put it this way, a Bank made 10 loans and held those loans, then it'd be capital constrained because it doesn't have enough capital to do any more loans. And so what they do is by selling the loans that they've originated, you know, over to a company like Farmer Mac, what it would do is it would provide the ability or capital relief for them to make, you know, so many more additional loans. So in a way it really expands the ability for, you know, the, the institutions making the originating loans to make more loans.

So that's your role now and you know, you're doing it very successfully and everything else, you know, where do you see treasury developing? I know that, you know, when I originally connected with yourself is because I know that you've done some speaking at some of the conferences and you know, virtually and you know, and one day we'll get back to the real world. We know this. But before then, you know, what, what are your sort of, do you see the areas that treasury should be thinking about now and the future and post, as we move slowly stumbling out of the pandemic and everything else, what do you think is important? Where do you think be focusing efforts for treasury and things?

The term treasury is kind of interesting. Particularly what I've seen over time is everyone defines the Treasury a little bit differently and I like to look at it in its most broadest sense and that is professionals that are in a Treasury type organization. For me, what's important is to continue to move forward, move forward in many, many aspects. And there's of course the challenges of working moving away from spreadsheets and onto systems that you can have, you know, really good controls and it takes away the manual aspects, you know, out of the work that so many people in the treasury departments are, are involved with. And it's. It allows them, you know, individuals to really, you know, do more, as opposed to just spending their time, you know, ticking and tying numbers, which unfortunately, you know, when you're moving cash, it's very, very important. But having technology as a partner, it really can make one's life not only easier, but it enables one to spend a lot more time focusing on what are the risks and potential new things that are coming down the pike. When I think of treasury, it's not just it improvements and enhancements, it's really, from my perspective, it is imperative that folks in treasury should know the business that they are in. It's very easy, and this goes probably for all finance positions, how important it is to truly understand what is the business and what do we need to be prepared for? Because if the business does something different or unusual, you want to be in the treasury area in particular, ahead of the game, so you're prepared for what's. What's coming.

How do you encourage that in your team? You know, you guys are very busy in treasury, as always, and lots of stuff going on, but how do you then sort of. I was talking to a couple of clients recently and they said, you know, that they. They are focusing on that bit of bigger picture and they're trying to get some of their team, but some of the. Some of them are getting it right and they're getting out to the business alongside their day job, but, you know, trying to handhold their team and say, look, you really need to understand the business to help the business. Now, how do you think, you know, certainly, how do you do it? Or how do you think any other treasurer also needs to, you know, focus on the business and helping, you know, the different. Different people out there.

Yeah, that's an excellent question. And. And my role as. As treasurer is one in which I. I do. I am involved in, you know, many of the strategies that, you know, the business is undertaking or planning to undertake. And it's my role to make sure it gets disseminated in an appropriate manner to my team members so that they are aware of what's happening. But it doesn't always come top down. A lot of times, because the treasury team members, at least on my team, are also working side by side remotely, of course, with many of the members of other teams within the company, not just finance, they are learning about things too. And it's this dialogue and this openness where if something new is happening, it's not necessarily only impacting their area, it may be impacting others. So I encourage my teams to bring it up to talk about it. So that because of what may be impacting one area of treasury may also be, you know, big impact on another area that or finance that we're not aware of. So it's having that engagement with one's team to make sure on a regular basis to make sure that they're aware of the things I'm seeing, but at the same time the rest of the team is aware of what others are seeing.

And before we get to the end of the show and we'll come back to get to the top tips, but just before that, and just as a sort of semi springboard from what you've just said there, it's incumbent upon them to sort of reach out to different businesses and, and try and help them with the different challenges they face. What are the challenges you. That are on your mind? You know, what's keeping you awake and what are you thinking? Guys, we need to be thinking about this for the future. Again. This is sort of advice for those listeners today. Sometimes on the podcast, you know, we talk about junior guys and what they should be thinking about, but maybe round table type fashion with other treasurers. What would you say is key that people need to think about Again, Alan and I spoke before the show that one of my clients, we talked about cyber warfare. That's a big thing for him and his business. But what are you focusing your attention on that you think maybe other people should also be thinking about?

Would you say the things we should be focused on is not solely impacting treasury and obviously, you know, the diligence everyone has to have with respect to, you know, cyber warfare is, you know, is imperative for, you know, entire, entire corporation. However, there are, are aspects that, you know, are more impactful to the treasury side than, you know, other topics. And the big one, of course is, you know, a transition away from Libor and how that impacts the entire business. And, and that's been thing that has been a true focus. And the point about that is it's an example of something that's emerging, when it was emerging a couple of years ago, of how to transition away. It's best to start understanding that really early as opposed to trying to jump in today when we're way down the path of the whole Libor transition. And I just use that as a simple example that it's the earlier that one gets involved in, you know, different aspects of preparedness for the future. It's the, to me, it's the, the best, the best way it's it's like folks who, if you hear about, you know, things like, you know, cryptocurrencies, there's a lot there to, to really learn and dissect and, and understand and the implications and whether or not it has any implications, any relevance to one's specific job, but just being knowledgeable of what's happening around the world with respect to new ways of transactions, I think it's key to truly understand that as well.

And as I said before, we're approaching the end of today's show. We'll put Alan's details and his LinkedIn details in the show notes so that people, if it's right to have them in your network, you can connect with them. If not, then don't, you know, it's, it's, it's fine. It's LinkedIn, so it's a free for all, for everyone out there. But, you know, joking aside, if, if there were people out there and they were looking at your background and they look through and say, actually that's something I want to do, sort of follow a similar path, what advice would you give to people today? Listening to the show, or, and, or, you know, what other bits of advice would you give to treasury professionals out there? We're going through, you know, all the challenges we've had over the past few years, which is top of mind, but what else would you, what the closing pieces of advice would you give to everyone? Alan, over to you.

To me, what really is important for everyone is networking and mentoring, mentoring folks, you know, if you're in the treasury field today, you know, mentoring, you know, the junior treasury team members or people who are not necessarily, you know, in your organization, but establishing the context, contacts through networking and maintaining those contacts over the course of one's career is truly, truly important from my perspective. And everyone has a different path of how they arrived at Treasury. And it's kind of, to me, what shapes one's career in treasury is not necessarily, or what you did in the past, but what you learned from your past experience and how you're bringing that, you know, to your present job. And, you know, I've, I've been able in many, many, many occasions to draw upon my experiences, you know, in different, you know, work situations outside of Farmer Mac. That, you know, has helped me, you know, think about different, different ways to really make a difference and come up with creative, innovative solutions to, you know, what would have otherwise have been a very challenging problem to solve.

And you mentioned there about networking as well. That's obviously a key thing. And it's challenging to do in today's time, but you do that very effectively. I've seen you, as I said, seeing you at different conferences and things. Why do you think that is so important in the treasury field in all spheres, but why, particularly in treasury terms, would you say.

I think there's two, two key aspects here is that it's really helpful through networking to understand what else is going on in your field. And I don't specifically mean about what jobs are available, rather it's more of what are you working on and what someone else is working on. Being inquisitive about the things that folks are focused on at various points in one's career. And you know, so, so to me it's very helpful. And also, you know, through your, you know, through your networks when you run into a challenging issue or one that you need, need to, you know, talk with people in other, at other firms or even other industries just to, you know, try to understand best practices. You know, it's, it's great to be able to reach out to that, you know, network, established network that you have to, to get, you know, some advice and from people that you know and trust. It's a lot easier to get those conversations going with folks that you've established a long term relationship with than the many cold calls that people would get. And it's also the same oftentimes you only hear from someone when they're looking for a job. That's okay. But at the same time building that longer term relationship is key. And one thing you mentioned about, it's challenging to do all this in a virtual environment. I would argue that it is also the virtual environment has facilitated a lot of networking. It's a lot easier to arrange time to meet with someone for a video chat for 30 minutes versus the traditional way of trying to find the time to meet and travel to meet for coffee or something like that. I do not mean to minimize the importance of face to face interactions. Those are, those are key in and in among themselves. However, you know, there are, you know, lots of ways to, to really connect and stay connected with people, you know, in today's environment.

Yeah. Just looking back, draw upon your past experiences by as you say, taking a step back and looking at things and considering other things. We've got the networking, we've got the mentoring and I think actually not dissimilarly there. And you mentioned about the having that strength of network and building up through virtual similar with, you know, I say this sometimes when I do LinkedIn sessions, if you've only got four or five people in your LinkedIn network. You can't really turn to people and get their advice. Whereas as you say, if you've got that massive bench, you can go, oh, actually I'll call Bob or Jane about this and they can give me maybe a bit of input from their side. So brilliant advisor, brilliant. So amazing. Thank you for your, your great words there and well, as I say, we'll put your LinkedIn details in the show notes you can connect if it's appropriate or whatever. It's been long overdue and thank you for your time, Alan. I can't wait to see you virtually or really on stage soon.

Well, thank you, Mike. Really appreciate being participant on your podcast. It's, you know, truly an honor to be here. Thank you.

Thanks. Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen, whether that's itunes, Spotify or another great place to listen to the show from. It's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there, you could even leave a quick review. Reviews and ratings are among the most important metrics for a podcast to effectively rank. And as you can probably appreciate, the podcast is a lot of hard work to produce. Every week it'd be amazing. Just take, say, 20 seconds, leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.

Sam.