Guerilla Treasurer

Small companies have one clear advantage over large corporations: they can act flexibly and innovatively without much bureacuracy. Successful small companies try new things, make a lot of mistakes, and learn from them. This enables them to quickly react to a changing environment.

From the Secret Guerilla Treasurer Academy

I know the difference as I worked in large corporations – in banks and corporate treasuries – from the late 80′s until the turn of the millennium when I started as an entrepreneur. We can now make decisions in one afternoon that would have taken countless meetings, memos, and arguments over several months in a large corporation.

This can be crucial when things change fast. For instance, at the onset of the credit crunch in 2007, we saw more than half of our budgeted revenue for the next 12 months just vanish within weeks (a lot of our revenue came from work for major banks at the time). Our ability to make fast decisions is the only reason for us being able to stay in business and now be back in growth mode.

Many corporate treasuries are now in a situation that requires agility and the capability to act fast. Top management is monitoring cash flows with a very keen eye. A treasurer is expected to be able to accurately predict any and all future cash flows – unfortunately, few treasuries can easily do this.

This is why it makes sense for a treasury to adopt a small company mindset in many things:

• It is the results that count, not how you arrive at them
• Speed is of essence; things cannot be pondered to death
• One should not be afraid of making mistakes, but learn to correct them quickly and learn from them
• Developing new things requires constant small steps that eventually translate into the right solution; you simply cannot expect to directly jump to perfection

This means that a traditional software project in which the problem is documented, requirements are specified, the RFI-RFP-RFQ merry-go-round is run for a several months, and so on, is simply not a functional solution. A much better alternative is a small steps approach. Make constant small improvements, study the results, and correct the inevitable mistakes quickly while it is still easy and inexpensive. Using a traditional software project model, the mistakes are found two years later when the solution is fully deployed and correcting them is no longer financially feasible.

If the immediate problem is unreliable (or non-existent) cash forecasting, you should select a solution that can be deployed in a few days – and that can be easily dumped if it does not turn out to be a good choice. It will not meet all your needs, but the key issue is fast improvement so that you can move on to the next important project.