Finance and treasury operations rapidly transformed in 2020, while dispelling a few widely held myths.
MSTS CFO Joel Campbell started 2020 as H&R Block’s Vice President, Treasurer & Chief Risk Officer — and as a skeptic of remote work. His opinion quickly changed as he and his newly virtual team successfully navigated the Covid-19 crisis and managed the company’s liquidity position by leveraging several enablers of virtual treasury success: advanced, cloud-based finance and treasury systems; virtual collaboration platforms; and diligent attention interpersonal connectivity. Campbell brought his two decades of domestic and international financial expertise and a deep understanding of payments and capital markets to MSTS this fall. An AFP member since 2002, Campbell has presented at the association’s annual conference and to its executive forum. Here, he highlights notable treasury developments that occurred in 2020.
What were the most formidable challenges you addressed as a finance and treasury leader in 2020?
Joel Campbell: COVID-19 was the biggest disruptor in what was shaping up – at least in early January — as a quiet first quarter. Spreads were near historic lows in the debt capital markets, and the equity market was humming along. When the pandemic struck the U.S. in early March, every organization, including my previous company, immediately entered crisis mode: How do we handle this? What’s the impact on our business? How do we flex to continue to generate revenue and manage expenses? Liquidity quickly became the biggest concern in treasury and finance: How do we think about the liquidity we’ve generated, and what’s our forecast for the next two or three months? How do we get through the immediate crisis, and how do we manage our liquidity position into 2021?
How did the pandemic’s initial economic impacts differ from recent financial crises?
Joel Campbell: The equity and debt markets were pummeled in March and April. In response, many companies started fully drawing their credit facilities and putting it on the balance sheet for protection in the face of extreme uncertainty. Banks were extremely supportive. That was an encouraging sign compared to the 2008 financial crisis when the banks weren’t as well-capitalized as they are today. The amount of liquidity pumped into the market was extremely beneficial. When you look at where we are today — corporate spreads are back to pre-pandemic levels — it’s fairly remarkable. From a financial perspective, we’ve been able to weather the storm quite well. Of course, the pandemic roiled our professional and personal lives in ways that still pose major challenges.
How did you and your team manage the shift to remote operations?
Joel Campbell: For years, I was someone who thought we all had to work in the office together. I thought working from home posed too many control risks and security issues. And I thought our collaborations would suffer. One of my biggest ah-has in 2020 was realizing that we can work from home just as effectively while interacting in meaningful, productive ways.
What changed your mind on remote efficiency?
Joel Campbell: I learned that I had to allow the technology to support what we needed to do, let go of some old-school security and control concerns, and recalibrate my leadership approach. How we communicate as leaders — not just to external stakeholders but also to colleagues and associates — became crucial to focus on. Our group spent hours and hours and hours on video collaboration platforms together, and that technology worked flawlessly. Cloud-based treasury workstations, ERP systems and related financial reporting applications enabled us to pivot quickly to a remote working model — not in a matter of months, but in a week or two.
What messages did you emphasize your team as a treasury leader this year?
Joel Campbell: I certainly stressed our ability to manage cash flow. But it was just as important to keep in mind that Covid created a new reality in our personal lives, too. Many of us were working from home for the first time while supporting children who were suddenly attending school virtually. The information loop that exists in a physical office can dry up pretty quickly in a remote model if you only focus on electronic handoffs and task completion. I promoted the use of frequent one-on-one meetings, team meeting and lots of informal Friday-afternoon meetings to sustain our informal connections. Those sessions helped us collaborate better while ensuring that everyone on our team had all of the information they needed to do their jobs.
Here are Joel’s predictions for treasury and finance in 2021.