Chapter Thirty One

Building and Sustaining a Treasury Culture

IN PART ONE WE DISCUSSED how building and sustaining a Treasury Culture is a part of building Treasury Leadership (see Figure 31.1).

FIGURE 31.1 Treasury Culture

In this chapter, we examine how to integrate Treasury Culture into the company’s human resources (HR) cycle and some parameters for the critical aspects of development and evaluation (Figure 31.2).

FIGURE 31.2 Integration of Treasury Culture into a Firm’s HR Cycle

The Treasury Culture can be a key criterion when looking for potential Treasury recruits. Young raw talent with the right approach need to be screened for essential Treasury Culture qualities, while experienced personnel need to be evaluated in addition for basic and technical skills of Treasury Culture, apart from job skills.

Training and development is a crucial element in the HR cycle. Companies often focus their training and development dollars on specific job requirements. Simulation-based training (see note) has become an increasingly popular method to impart and test job-related knowledge.

In addition, managerial time and effort should be invested in mentoring and planning job rotations, and training budgets should focus on general and technical skill-based training apart from simulation-based job skill-related trainings.

Advantage of Simulation-Based Training

Oftentimes, despite the best intentions of the trainers, trainees, and companies, learning from traditional training programmes ends when the course certificates are handed out. Little follow through is done. If an employee performs better in the coming year, the training is deemed to have been successful. Recently, more and more companies are using simulation or game play modes of training—where participants undergo real-life simulations on a system or by playing a game and applying theoretical learning in situations similar to what they might face at work. These methods give participants an opportunity to try out different solutions, varied approaches and, most important, see if these approaches can work. It is a rehearsal before the real event, where there are no penalties for being wrong but only upsides because the learning has actually been tested. There is no substitute for doing a task; it does not compare with merely listening to someone talking about doing the task. With simulation and game play, more value can be extracted from the same training dollars, and travel time and infrastructure setup time are reduced dramatically. Some simulation training firms, such as Aktrea, provide Internet-based simulations that participants can use on their own time, thus reducing continuous time away from their desks. On-site simulations have their own value, inculcating concepts in environments away from work that can promote lateral thinking and problem solving and also build teamwork as participants interact with each other outside of work and create long-lasting professional relationships.

The concept of game play and learning through simulation can be traced back to the Kolb cycle of learning (see Figure 31.3), propagated by American educational theorist David A. Kolb, whose interests and publications focus on experiential learning. The concept shows how active experimentation and testing barriers to explore situations allows relating concepts to actual work situations, enabling individuals and groups to analyse and reflect on information and paving the way to permanently imprint the learning that can be used practically at work.

FIGURE 31.3 Kolb Cycle of Learning

Source: Created by David A. Kolb

The way in which this method can reinforce learning is shown in Figure 31.4.

FIGURE 31.4 Reinforcing Learning Through Simulation

Treasury can use simulation-based training in different ways and through different themes (see Figure 31.5).

FIGURE 31.5 Simulation-Based Training Related to Corporate Treasury

How does game play actually work? What does a typical simulation contain? Figure 31.6 provides a snapshot.

FIGURE 31.6 Typical Simulation (Markets Simulation or Bourse)

Simulation and game play are here to stay, and smarter firms are already adopting them as a way of life in their training calendars.

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Empowerment and progression is the next stage in the process, and this is worked on by the Treasurer and chief financial officer along with the HR function in line with the organisation’s processes and practices. Also, the Treasurer needs to start involving the next level of management in the parallel support and consultative work that is part of the treasurer’s responsibility (see the next note), as an enabler of empowerment.

Importance of Hats

In the larger context of treasury, the various hats that a treasurer wears (see Figure 31.7) are exceedingly important. The treasurer needs to start making the next level of management aware and ready to take on some of these roles, preparing them to move up the responsibility ladder.

FIGURE 31.7 Many Hats of a Treasurer

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EVALUATION

The area of evaluation of employee performance and their absorbing and practicing of Treasury Culture is perhaps the most challenging part of putting in place a Treasury Culture, especially when some of the aspects of culture are not tangible or measurable by conventional methods or key performance indicators (KPIs). Specific job-related aspects, such as control mind set; process orientation; regulatory, accounting, and technological skills; business skills; and job-specific performance are measurable by KPIs (see Figure 31.8).

FIGURE 31.8 Development and Evaluation of Treasury Personnel in the Context of Treasury Culture

Some of the measurement tools that can be used apart from the performance metrics are assessment centres, surveys, and supervisor reviews.

Assessment Centres

Assessment centres are used for the qualities that cannot be measured by conventional KPIs. An assessment centre is typically a programme that makes the assessee participate in a number of tests across a period of time and finally arrives at a consolidated and consistent score across the aspects that are being evaluated. Many of the situations are subjective and decision based, and good assessment centres try to objectivise the performance on some of these situations and generate scores and assessments after removing potential bias and measurement error (since the assessment is over a period and range of tests instead of a single questionnaire). The author’s preference is to use assessment centres rather than single questionnaires or surveys.

Surveys

Internal customers, such as business and country operations, are the direct end users of Treasury activities and services. Hence, treasury’s output and approach from an internal client’s perspective is best observed through surveying the direct beneficiaries of Treasury performance. For some of the softer aspects, such as cultural awareness for global teams, 360-degree reviews are useful if implemented well.

Supervisor Reviews

Since supervisors have direct responsibility for employee development and performance, it is imperative for some of these aspects of Treasury Culture to be factored in to supervisors’ assessments of their subordinates.

SUMMARY

The role of the Treasurer as people manager is generally underrated. Unlike all true team leaders, the treasurer’s role becomes even more complicated with the need to build a very diverse yet deep set of skills and to ensure that the team remains motivated—the degree of interface and the pace of work at Treasury has seen some churn in organisations. With Treasury roles, continuity is a core asset. That is where a strong Treasury Culture, which necessitates reinvention while playing in a larger organisational team, plays a key role in the development of the Treasury organisation.