COPENHAGEN, Denmark -- Part of being a treasurer in today’s environment is being able to adapt to change. During a panel session Thursday morning at the EuroFinance International Cash and Treasury Management conference, executives from major companies explained three ways to respond to major changes.
Divide and conquer
Mayela Stuparitz, global treasury director for Wm. Wrigley Jr. Company, explained that about two years ago, her organization decided to change the system it used for foreign exchange management. The solution that treasury had in place was becoming obsolete and it was no longer going to be supported by the company.
Adding such a mammoth task onto treasury’s already considerable workload was not easy. “We had to quickly adapt in the sense of figuring out how we would approach this, on top of the daily tasks and activities that we needed to perform to support the business units from a treasury perspective,” Stuparitz said. “We knew that cash management still had to be in place, even as we had to roll out a new FX system.”
Treasury assigned two associates from the team to work primarily on the FX project, from the RFP to the testing, implementation and deployment of the solution. Another associate also joined later to help deploy the solution at Wrigley’s more than 40 units around the world.
Treasury still had to accommodate for its day-to-day activities, so the rest of the team handled these tasks, with help from the other associates as needed. “The way we did it was to just divide and conquer, and at the same time support in different ways,” she said. “All of this was in a year or less. It was a very tight timeframe.”
Rely on experience and work together
Henning Jakobsen, vice president and general manager for Colgate Palmolive’s Nordic hub, noted that in 2007, his organization recognized that something was “not good” in Greece and Southern Europe. “Very quickly, when it dawned on us what this could actually mean in terms of profitability for the whole division and the whole corporation, we did what we do best in our company and learned from each other,” he said.
Jakobsen contacted Colgate’s operations in Latin America, because some Latin American regions experience crises similar to what Greece was experiencing—often on a daily basis. The Latin America team helped Jakobsen make up a contingency plan for what could (and did) happen in Greece.
However, this called for more than just a plan for Greece. “What you’ll remember that the crisis in Greece could ultimately spread to Italy, Spain and Portugal, just to start with,” Jakobsen said. “So we got a number of people together from treasury, finance, supply chain, marketing and sales, and went through different scenarios of ‘what would happen if’. We found what our downsides were, what the opportunities were, and how to deal with it.”
One the plan was formed, the team presented it to the board of directors, as well Colgate’s employees. “We explained to them how we were going to attack the plan, and it was actually very powerful,” Jakobsen said. “The employees felt that there was a plan and they all knew what their role in executing the plan was. We came out of this with a much stronger plan than we had going in.”
The way a business responds to an unexpected change often has a lot to do with the culture it has in place. David Nelson, vice president investor relations and treasurer for IT services provider Cognizant, is a big proponent of what he calls the “culture of paranoia.”
Tosh noted that there is definitely a sense of paranoia among Cognizant’s senior management, in that they are constantly aware that what is important today might be meaningless tomorrow. This can be traced back to the history of IT services in general. “We’ve seen significant change in the last 20 years in IT services, and it revolves around client demand,” he said. “At one point, almost 100 percent of what we did was around Y2K services; that came and went. But then what happened was then client demand quickly shifted and the demand for IT services basically collapsed.”
The demand for IT eventually began to build back up, but this time, the focus was on was on labor arbitrage. So again, with client demand changing, Cognizant had to adapt. Later, after the recession and recent developments in technology, client demand changed again, and Cognizant again had to adapt.
“So the worst thing we can do is get complacent,” Nelson said. “If we don’t continually change the types of services we offer, we could become less and less relevant to our clients. So we have to continue to change and evolve so we stay relevant.”Check back here, or on Twitter, Facebook or LinkedIn, for more updates from EuroFinance.