Why Team Building and Soft Skills Are Vital in Treasury with Klaas Springer

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. In this week's show I'm joined by Clark Springer, the corporate director of treasury at Royal Friesland Campina. Now Royal Friesland is a Dutch multinational dairy cooperative based in the Netherlands and they supply unsurprisingly a well consumer products, dairy products right the way across massive group. They have branches in 38 countries but they actually export across the world. So over 100 countries worldwide. As always, enough from me chatting, we'll get more into, you know, the, the group and the company. I want to get into classes, actual life story and things like that. So class, let's go back to the beginning. We've had a pre brief call before this and we talked about your strength in economics which leads it very easily into treasury and finance. But maybe you sir, over to you, talk us through how did it all begin back in the day. Over to you.

I was an econometrician, so I had my master in econometrics cum laude. I wrote a PhD thesis, Mathematical Economics type of. And I just wanted to apply my economic financial knowledge. I was applied for a job at Robeko Group at the time a big Rotterdam, in fact the biggest investment company in the Netherlands at that moment in time. I became the general econometrician there, wrote stories about Japan and Asia, macroeconomic stories. At the same time I maintained econometric model, world model, Robeco Group. And at a certain point in time I was invited by the treasurer of the group. Well, I am looking for treasury risk manager, somebody who understands the option pricing models. Well, apparently you are an econometrician so you should be able to do it. And you are good in communicating about macroeconomics in a, in a clear way. So yeah, that combination would, yeah, that makes you fit for this. So I started as a Treasury risk manager. I guided the positions in currency options of a number of funds. What is the interesting thing? Of course if you, if you're in the university you are talking about markets and basically what you say is markets are something like where demand and supply meet and then at treasury you become part of that market. You are a player, a gamer maybe also. And from that moment on I was really fascinated by Treasury. I wanted to know more. Of course I learned the tricks of cash management and so on. But of Course I wanted to also on the corporate finance side, debt capital markets. I would like to have more exposure, more experience, more. That's also why after five years at Propeco, I joined treasury as a treasurer of the applied technology research company TNO in the Netherlands.

Sorry, Klaus. That's quite a step up, isn't it? You know, sort of stepping from treasury risk managers suddenly to treasure. I know we talked about this before, so talk me through that.

That is a step, but I have to be modest. The treasury of T and O at the time consisted about of three people. So basically I was there with a cash manager and a credit manager. It was small, but it was a treasurer function. Interesting part of the T and O Treasury was that it also had an investment part of itself. So we were investing funds that would be. Should be used in the future for the Dutch technology infrastructure. So it was about over 100 million euros of bond portfolio that I had also to manage besides cash management, et cetera. So in that respect it was a first step in terms of becoming a treasurer. And actually after tno, well, I was recruited by ING Investment Management. ING was then, at that time it was a bank combined with an insurance company and an investment company. Later on, or more recently had this ING group has been split up again. But at that time it was a combination. I became the regional treasury manager for Europe at ING Investment Management. A huge. Also a huge investment operation. I had performance responsibility on the. On the currencies over there. So I was really. I had to make money on the basis of positions of ing. That was in many respects also a new experience. And the other side was the corporate finance side. So ing, for example, ING Real estate invested a lot in, let's say Awasha warehouse, series of warehouses in the area. And then, yeah, you have to think of how to finance that in the most effective way. Get involved with tax, with legal. So there the corporate finance was, let's say, touched upon, became part of my experience. I also, at a certain moment we sold a portfolio of real estate to big Dutch investment pension funds. Actually I was also involved in that, which was a very good experience and class.

It's quite different for you to be sort of, you know, market maker. A lot of treasures. That's it. De risk everything, get rid of it and everything else. But obviously you had economics and we. We've talked about this, that that was a real strength of yours before you made the move to our hold and things. But you know, within those roles, you know, was it. Did you find that a bit Sort of challenging in a different way that you'd been, you know, de risk, currency risk, treasury risk, get rid. And then suddenly you're actually position taking. It's like, whoa, okay, you know. But then you went back into a so more traditional corporate treasury role. You know, how did that, you know, how did your brain cope with that?

It's the other side of the coin, of course. So on the one hand, ing, we indeed also had a hedging strategy as a basis. But for example, you have a position in a certain currency, say British sterling or British pounds in the uk. Part of the position has to be hedged, let's say a percentage of 50%. And then let's say my mandate was that I could move up to 52% or 48%. But with those 2% of bandwidth, within those 2% of bandwidth, I had to make money. So if I, if I changed the position, then I should make money with it. And if I would like to change Even more than 2% then I would need the consent of course of the treasurer and higher echelons, so to say. But you are continuously then focusing on the whole of the market and macroeconomics as well as trends, emotion in the market, et cetera.

And then you sort of came back to your, dare I say, your roots, but you came back to corporate treasury. What was that like coming back and not really left. You were still doing it, but you made that move. How was that?

But you have to see it in a step wise way. So basically at TNO and ing I had a lot more exposure to risk management and also to corporate finance. And then Royal Ahold came by and there I became the global treasurer, so to say. And there the focus was much more on debt capital markets. So how to get money out of the market, finance, all kinds of ma. So basically at that company we had acquisitions going on on a monthly basis, big ones, small ones with both currency risk aspects, but also debt capital markets. So having to go to the bond market, we launched an EMTN program when I was there. So yeah, that was a new step for me. I was more on the, on the investment company financial side for most of the years. And then at Ahold I was doing a lot of funding.

You made your sort of move to join your current group, Royal Friesland, and it's evolved and changed and there'll be other people listening today that will be similar situation, joining companies that are growing and things. Can you talk us through, you know, the move from food retail. Food retail and stuff with our hold. But Then you, you know, move to this new sector as such. And then the, you know, over the 20 years you've been there, it's not been the same job. You know, that's one of the key things is, you know, so 20 years there, it's grown, it's changed, it's evolved. I'm looking through, back through some of my notes and you know, it's really interesting the way it has changed. Talk us through that. You know, what was it like when you started? How have you seen that sort of 20 year evolution? We talked about that, you know, again that you were thinking about, you know, jotting down some of your memories of it. What was it like when you started?

It's really a building story essentially. So I was recruited at Friesland Foods, so one of the predecessors of Royal Friesland Campina, a cooperative. I was recruited because of my, let's say experience and my CV on the one hand, but also the cultural element was, was important there. Working for, yeah, essentially farmers, people that have a long term view where continuity is, is key. And my challenge was I had to build an international treasury for, for Freestone Foods. And there was, there was something, but you can call it a really an integrated treasury. And I had to basically start with the restructuring. So think of, let's say, writing down what kind of positions should be in there and then comparing that to the people that, that were walking around. And then, yeah, the conclusion was I can use a few others I have to guide elsewhere, which was also successfully done. So I took care of them very well.

So how did you do that? You know, what was your ethos again? Because other people would be in a similar situation, they've gone in somewhere and they've got to go through a change management program and bring people along with them. And I know that, yeah, if you.

Come to a certain conclusion and that you can't use certain people in the future manning certain positions, then you have to be open about it. I've been open about it from the beginning and I always made them a promise. I will do the utmost to help you find position elsewhere. I committed to that and I helped them.

You had that. What, what were you then seeking in this new treasury area? Was it real technical skills or what? What did the new treasury need, as it were?

It was a combination. Of course you need treasury skills, risk management skills, but you also need soft skills. And that's also one of my. You can have good treasury people with a lot of cash management knowledge or whatever, operational knowledge, but if they are not able to communicate and to explain to others what they are doing and why they are doing this, then you have an issue. So I've always been looking at people that combine the treachery knowledge with, well, the ability to have a steep learning.

Curve and soft skills with the company and the group. Can you talk through what it was like then and how it has grown and changed and then follow that on with just so that, again for the listeners, how that's changed the demands on Treasury? Because you've grown, you've changed, you've sort of realigned, you've been. We again, we spoke before about some of the recessions we've both been through and you know, in the time and stuff. So talk us through.

Well, if you want to build an international treasury with all the pooling stuff and centralization, that takes time. But that was basically my challenge. And to give you a short anecdote, please imagine that from the start, it was quite a decentralized company, Feast on foods. So I'll never forget the Hong Kong managing director pulling me on my necktie and saying, you're taking my money. So all over the world, there were subsidiaries that were doing very well that created a lot of cash, but they were playing their own treasurer. Basically, they were investing it, or at least they made deposits. And then I came and I said, well, it is all cash of the company. I have a mandate from my CFO and I'm going to take it away from you. It's not yours anymore. Let's say that that was kind of a shock to the whole company. It took me a couple of, I would say, two years to really get everybody aligned in this. If you are a managing director and you are earning a lot of part of your, let's say basically part of your business is taken away, that creates some havoc. They were playing gold with their own bankers. That was gone. And that kind of centralization and that took time. And basically when we were ready with it and we could say, and now we do have a centralized international treasury at Freestone Foods, then the merger came and I had to choose. I had to determine whether I would stay on board and start or applying for my own function once more or leave and look for another position. I stayed on and actually the year of the merger was my, I think my top year. That was really. I had to. I had a couple of things to do and I had a small team but an able team. We had to adjust the capital structure. So we introduced a new instrument, enabled us to convert all the other equity type of instruments of the. Of the former companies into. Into one instrument. And it was the year 2008, the year of the credit crisis. So the worst possible year to do a merger. We had to refinance syndicated loans, we had to negotiate with USPP investors on the existing docs. It was a change of control moment. So in all this had to happen within I would say nine months time. We managed. Also being in the center of that whole exercise in fact placed me in a very strategic role from that point onwards because I was the one who was in the midst of developing the capital structure which was rather complicated. In the meantime of course there were CFO changes, executive board changes, but I was still there. So I knew everything.

I don't feel that we've got really a description for the people listening today about the group, you know, and how it's evolved and stuff like that. We, you know I alluded to the fact earlier that you're. You export to 100 countries, you've got branches in 38 your dairy and consumer products, you know. But that's again we've talked about some of the challenges, you know we've recently had treasurer for V on Foods and you know, meat production and stuff like that is, you know, it's making me hungry just talking about it, you know. And I've had you know, some guys and drinks companies and get thirsty.

Yeah, please think of a highly international company. I worked at Royal Arhold at the time and there basically we had a big US subsidiary but Friesland Campina has subsidiaries, big subsidiaries in countries like Indonesia, Thailand, the Philippines and also in the Middle east in Africa. Nigeria is one of our biggest subsidiaries. So we have a huge emerging market operation where you are confronted with different regulatory environments where you really have. You have to take that into account where you can be centralized on the one hand. But for example in case of Nigeria you have to. There are certain exceptions to make in terms of your policy etc. And also important besides the international elements. It's many people and talking about dairy companies, they think of milk, milk in packs. That is let's say one of the least important products. I would, I would say we have. We have an. A whole range and this whole range also constitutes very technology based products, pharmaceutical products, infant food ingredients that stimulate digestion. Basically every. Everything you can, can make out of milk, proteins and fats. That's an enormous range of products from very simple to very complicated.

What challenges did that throw to you as a treasury? We Talked about then the 08 in a crisis and you Know you got through that. But some treasurers, they'll be in services groups, you know, where they're giving services to the group and you know, they'll be affected by different things. But were you affected by more commodities? Because, you know, a lot of the, you know, the farming and stuff like that or, you know, how did you deal that was, you know, was that, did you get involved in that or. No, you were, you know, very much let the business get on with that. I'll give them a hand if they need to. And how did you manage that?

If you look at the evolution of treasury, then part of the story is also about commodities. So we came, let's say, involved in commodity risk hedging more and more step by step. At this point in time, the dairy commodity part is still small simply because the markets are still illiquid. Treasuries also has a big operation in commodities, primarily fuel, so diesel, electricity, those kind of bunker oil, those kind of stuff. But that is also part of the evolving treasury responsibility of Freestone Campina.

As you've seen treasury evolve in this time, what's it been like? Because you guys have won various awards over the time and you've been recognized for some of the stuff. But what did you want to do? Because I know that you've really, as a great thing, a passion of yours is digital treasury and things like that. So talk us through that, would you?

That is an interesting subject. At a certain point in time, you can imagine you are, let's say as a department, but also a treasurer, you are convinced of the added value of a centralized Treasury. There are all kinds of developments in terms of business groups are also powerful, etc. Etc. So that was one of my biggest obstacles that I had to take away at the time and to convince our executive board as well as supervisory board of the rationale of a centralized Treasury. What I did at a certain point in time, and that is mainly after the merger, we had a strategic benchmark review where we were compared with our peers. So with big listed companies like Heineken and Akzonopel, the comparison was in some areas it was quite good. But it was clear that on the operational side and also on the centralization side, we still were lagging behind. And if there is one thing that the CFO doesn't like, then is to hear that he's lagging behind his peers. And that really helped us to get the support and also to to expand our operations team. Also what is an essential step there is at a certain point in time we recruited treasury systems manager. So that really helped us to accelerate all kinds of platforms, cloud based platforms basically. I'm not a specialist in that, but which is another important decision made by the company at the time, which I had to fight for, is to choose for a cloud based solution instead of, let's say the SAP treasury stuff. At the time it was clear that SAP was to become our main ERP system and I am happy that it has been rolled out to basically 95% of the company. But I was not, let's say, convinced of the rationale to work with the SAP treasury module at that time. The let's say competing software coming from others was let's say also cloud based and cloud based was, we're talking now, I think about 2011 or something was still not really accepted. It was a little bit like arguments like security is it not, Will it not enable to take out the money out of Threesome Campina by somebody from the outside. That was one of the worries and together I am still grateful to her. Together with my female ICT corporate director at the time, we were able to convince the CFO that it was much better to have the treasury platforms not, let's say one on one with the SAP ERP system. And since then this really enabled us and it's still enabling us to be very flexible and to make changes much faster than some of our peers.

And when you say that, you know, you partnered with your IT guys, you know, again people will be listening today thinking, oh, you know, how did you establish that? What I mean by that is, you know, did you go to them with a checklist and say, right, this is what we need to be doing, this is how we're going to do it and things like that or how did you work out what you would do together?

Well, collaboration is everything. So we what, what we were at the time, we were in a, in a joint steering committee so we had of course our functional demands for the treasury system. The conclusion was actually that these, these demands could be covered by both SAP based system as well by what I call the more flexible cloud based solution. However, and that was also had, that's also a big thing to take into account. And we are a dairy company so if you look at our margins, we are not a high margin company. We don't billions of P and L. So there's always the question, are we, let's say really lean enough, effective enough when comparing both the SAP related as well as the not SAP related solution. And my conclusion was it was much more cost effective to stay away from SAP at the time, as simple as that. I am open about this. I'm also with colleagues, they know of my views in that respect. It was a major strategic decision. And on the one hand, as mentioned, the ERP system, which has been rolled out, is also in terms of data, et cetera, is a great enabler for our centralized treasury operation. Having, let's say, based ourselves on cloud based solutions. We are at this point in time, we are much more flexible and can move in all kinds of directions.

You've done so much over 20 years I could dive into. You've done green bonds, you've done treasury centralization. Sometimes I talk to a guest. They've been three years as a Treasury, you've done 20 years as a Treasury, you've been there, done it and things like that. What would you say? Maybe the highlights and maybe couple of the tougher times. How have you dealt with that? What are the things that bubble up as you reflect over the period? What would you say?

Let's say I mentioned already mentioned the centralization effort, so I had to take some obstacles there. If you talk about sustainability, that is also a very interesting one. I remember that at one hand in our company there was a sustainability department at a certain moment created and basically the finance function was still looking at that in a, let's say, septicle way. So to say it was seen as a, maybe as a temporary trend or something like that. And we from the treasury side, we were, let's say pretty early in realizing that this is the real future. And especially working for a dairy company, which is, in terms, if you also include the chain of the dairy company, we are a greenhouse gas producer, a big greenhouse gas producer. So if you are not, let's say working and have a continuous improvement culture in terms of sustainability improvements, then you will simply have a big issue going forward. So treasury at the time we issued green bonds in 2016, but preparations for that were being done in 2015. And I really had to bring together our sustainability people and our finance people. And actually our sustainability said to me at the time, well, this is really interesting. We were not, let's say, expecting you from finance to really reach out to us. We from the treasury side, we see the benefits and we want to start the conversation and collaboration. And actually just a few days ago we signed a sustainability link loan with one of our banks. So we are, let's say, taking real steps there. And if you ask me, the future of debt financing in Friesland Campina is really, with sustainability linked, really with green, it fits to the strategy and it fits to financial market developments.

And Klaus, you know, things are changing for you there because things have changed throughout. Well, let's, let's just bring us more up to date. Let's talk about, obviously we've been done before, during and after Covid done the before job. We're starting to move out of it. We know there's an end in sight or we're progressing through that. Things are also changing for you as well. And I wanted to talk to where you see the future Treasury. Maybe you can sort of talk us through that a little bit, if you would.

If I look forward, there is still more work to do on alignment of sustainability finance. So that is I think a big trend that will be followed up in the future. And as you already said or pointed at, basically I've done it all, I've seen it all. And after 20 years of prison, Campina, you know how things go. But the company and I came to the conclusion that it would be good for me. So it's also my own conclusion. It would be good for me to leave the company on the 1st of July after 20 years. Exactly. So that is a nice milestone and I will now be looking to the future. I'm open to basically everything. I'm leaving a team behind that is, is very well suited with yourself.

You, when you say about that sort of future, future treasury as it were, what is it that you're seeing coming down the line as challenges? You know, what are the things that you're thinking? You go out there into that and people are going right what, you know, you say you're doing a consultancy assignment or something like that, you walk in the door, what's your, what's your checklist or what are you saying to people that they should be thinking about straight away?

Well, I think, and that is a conclusion I reached over the years, the real added value of highly educated people in a Treasury is in risk management funding. But basically it's all about business partnering both towards the executive board at the more strategic side, but also to your business groups and your subsidiaries. Especially if you have a lot of emerging markets which require a tailor made approach in many respects. So you have to put in place a very strong digital treasury so that, let's say the normal cash management, normal hedging execution is almost completely digitized or maybe replaced by a robot with some artificial intelligence that you are able to almost spend no time anymore on the operational side of treasury, but you are completely open for, let's say business Partnering and servicing your business. If you can reach that point, then I think you, you really have to reach the highest added value for your.

Company and focusing on that strategic level and things like that. And as it moved forward, you know, treasury, this new, you know, you and I, we've met each other a number of conferen and things when, when they, when they used to exist and things like that. And you see all these different technologies and that strategic move again. If people are listening today, what do you think they should be thinking about? You've run these great teams and stuff like that. Is it, you know, they should be, you know, studying themselves or should they be getting out there working with the business more closely or a combination of this? Or when you look back at some, say some of the team that you've coached and mentored, which ones have stood out to you, that wow, that person's really got it. So I think you're looking down on it, you know, as the treasurer, in a, in a positive fashion saying, wow, they're really good.

Presently I have a team of 13 people, including a trainee. Trainee is, is more or less a fixed member of, of the team, but I am always focusing on the team. Of course you also need your high potentials in the team, but you also need, let's say more medium potentials with a very, let's say servicing attitude. So it's all about having the balance. It's like a good football team. You can't have high potentials, only high potentials because that simply doesn't work. But for people to develop in Treasury, I would say it's first of all important to have a learning attitude, be open for all kinds of challenges. As I also mentioned, I went from ethics risk management to corporate finance to debt capital markets and back and forth. So make sure that you know enough of all the various areas that consist and develop soft skills. Because I meet many people in treasury every now and then, of which I say, well, they are probably, they know more about technology and they are highly experienced on operational side. But in the end it is also about communication. You have to deal with CFOs certainly if you want to become a treasurer, but you also have to deal with finance directors, controllers and have to be able to translate into their language what you're doing. And that is an art in itself. If you do not develop those soft skills, you will never, let's say, make it as a global treasurer.

I would say, yeah, you're going to fail.

And of course coaching leadership, that is also, you know, the German Term, but it's Auftrachtshooreng. In English, it's mission command. If you have a team, do not tell them or tell them what to do, but don't tell them how to do it. Give them freedom of action and of course, always be able or be available to support them if they run into problems or into issues or have to escalate something. Be there for them, but don't tell them how to get it done.

Yeah, don't tell them. Just sort of support them in it as they. They develop and grow and things and. And just, you know, just with yourself and you, you know, you've actually answered a few of these because usually we wrap up then as we do today. We'll wrap up today's show with your sort of top tips. We'll put the details of your LinkedIn profile in the show notes. So, sure, people will want to connect to you after listening to today's show. You've got some great experiences there, but like, with, with that, you know, if you reflect or you're looking at it, you know, someone says, do you know what? I want to have a, you know, similar background to class. This is what I want to do. What would you tell people? You know, what's the, you know, you're sitting there over a coffee with them, what the top two or three pieces of advice if they're, you know, early stages of career, maybe a bit later on or, you know, what are you going to say to them?

Well, be open for various challenges so that you keep on learning and you keep on having this steep learning curve. Invest in soft skills. Absolutely. So also think about effective communication presentation skills. Usually the Anglo Saxon people are much more, let's say experienced in that. It is to a lesser extent in Dutch education, but yeah, those type of there you have to develop and keep on developing and never think that you are already there because there's always something new to learn and beware. Every company is different. So there is also in treasury, there is not one solution for every company that's wrong to think that way. Always you have to mix and match with the special situation in that particular company.

I love it. Klaas, it's been amazing talking to you. As I say that, you know, if you want to reach out to him, he's going to be available and you can be talking to him, you know, later this year and things. But, you know, the key one I thing, and I don't think I've actually had that as a piece of advice which I really like is this side of not one size fits all and that adaptability, you know, we talked about some weeks we talk about curiosity and different things, but I think, you know, it really works. They're not one size fits all and just, you know, just from yourself, you've seen it at different sizes. So, you know, I think that that really works. So, yeah, really good. We'll put your details in the show notes, people can connect to you and you know, look forward to, you know, when we can meeting each other face to face for that long overdue beer and maybe seeing a conference one day soon.

Yes. Well, I also hope for that Mike too long time that physical meetings really couldn't happen.

Yeah, one day we'll get back to it. So yeah, we'll get there.

I'm longing for it.

We're lovely to see you. Thank you very much.

You're welcome.

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 probably appreciate the podcast, there's 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.