May 2022
In the fifth episode of our ‘In Conversation with…’ podcast series for 2022, Partner Lucy Lewis speaks to Kevin Cook, CEO and co-founder of TreasurySpring, a fintech company launched in 2016.
Kevin discusses the ESG demands that are at play in the market and explains how awareness and focus on ESG has shifted over the past few years. With pressure coming from both investors and employees, Kevin explores the importance of ensuring a company’s views and strategy for fostering an ESG agenda are clear, with a warning not to fall into the trap of greenwashing or lip service. Lucy and Kevin also discuss why TreasurySpring took the decision to become remote first, with Kevin sharing some practical tips to avoid two-tier culture.
To find out more about TreasurySpring, please visit https://treasuryspring.com/
In Conversation With…Kevin Cook
Series 2: Episode 5.
Lucy Lewis: Hello and welcome to the Future of Work Hub’s ‘In Conversation with…’ podcast. I’m Lucy Lewis, a partner in Lewis Silkin’s Employment Team and in this podcast series I’ll be hosting exclusive discussions with innovators, business leaders and thought leaders to explore their perspective on what the future of work holds.
The pandemic has accelerated longer term societal, economic, technological trends and we have this unique opportunity, a once in a generation challenge to rethink who, how, what and where we work and although the pandemic has been a significant catalyst for change, it’s only one of the things driving change in the world of work.
One of the things we’ve been watching on the Hub is a significant shift over recent years in relation to trust and increasing scrutiny of business behaviours, a focus on the legitimacy of an employer’s role in wider society and part of that has been an increasing focus on ESG – so Environmental, Social and Governance issues and we’ve been looking at how shifts in employee expectations around work and trust and responsible business, how that reflects wider shifts in society and lots of our discussions on this Hub have looked at what the change means for business and how it impacts a business’ people proposition.
Today I’m delighted to welcome Kevin Cook, CEO and co-founder of TreasurySpring. I’m hoping that Kevin’s going to help us unpack a little bit about how that shift is starting to affect start-ups and the financial services and investment sector more broadly. TreasurySpring is a fintech company – it’s designed and developed a ground-breaking platform with a standardised regulated framework to connect cash rich firms to institutional borrowers seeking short term funding. Since its launch in 2016 TreasurySpring has been through a period of really rapid growth raising $10M of new equity in the last 12 months and achieving more than 1,600% growth in assets since the start of the pandemic, so I’m really fascinated to explore with Kevin how businesses and how their key stakeholders are navigating this shifting ESG landscape. Welcome Kevin.
Kevin Cook: Thanks Lucy, great to be here.
Lucy Lewis: So, I’ve said I’m going to talk to you about ESG but actually before I do that, one of the things that interests me about TreasurySpring is your remote first set-up and you’ll know that the pandemic has forced lots of companies to dip their toe in that remote working world and lots of them have done that through necessity.
You’ll know that we’re now seeing hybrid working by design in lots of businesses but in the tech sector a lot of businesses have retained that fully remote working and I wondered if you could share your experiences of that with us.
working remotely
Kevin Cook: Sure, so for those who don’t know me, haven’t come across me, I’m 41-years-old, I’ve been working in finance for the best part of 20 years and almost all of that time was very office based and so when we set up the company in 2016 that was how we assumed that we would work – we had a small team, it was growing, we thought it was really important for people to learn by osmosis and generally by being around and listening to others and so we operated I guess in the way that most business would have done pre-pandemic, so people could take the day to work from home if they had a delivery or there was a particular place they needed to get to at lunchtime or what have you but otherwise, we were very much an office first culture.
And then of course the pandemic hit and I think it was 23 March, just over two years ago, when all of a sudden everybody picked up their laptops, went home, turned them on and we didn’t know how long we were going to be there.
From our perspective, we were lucky in that we had already always set up the business to enable us to be properly tech-enabled and one of the things that we did from the very first day that I think really helped us was we had a team meeting every morning, depending on the day, at 8:30 or 9am – full cameras on, for everybody and we operated obviously in a completely remote world for a few months and then a very heavily remote world for the most of the following 18 to 20 months or so.
As the world started to open up again last summer, we had to think what the future held and what that meant for the purposes of how we were going to operate what was then a significantly larger team than it had been at the start of the pandemic and I think the things that really surprised us were the levels of efficiency and levels of cultural fit and togetherness that we’d been able to generate in a remote working environment. We’d also listened to our team and found that lots of people preferred working remotely, at least for some part of their week and so, we decided before kind of pushing people to come back to the office that we’d take a survey, we’d see what people wanted and what came back was that the overwhelming majority of people did not want to be in five days a week. I personally didn’t want to be in five days a week, neither did my two business partners and so we’ve gone with a remote first culture.
What that means is, as it has for much of the pandemic, everybody has to be set up at home to work, just every bit as efficiently as they could be in the office, but the office is open – people can come in – some choose to come more than others, some are hardly ever there. We have one of our lead developers who’s spent most of the pandemic following the sun around the world, working from wherever the fancy takes him and that’s worked remarkably well and so for us being able to operate in this remote first world, giving people the flexibility to be away from the office if that works better for them but to come in if for them, their colleagues, their teams, they think that that’s more efficient, seems to be going well so far. Obviously not without its challenges, some of which I’m sure we’ll talk about but generally I think it was a really good decision and one that I would never have expected that we would have made if you’d asked me two years ago.
Lucy Lewis: The challenge I think that comes up most often when we’re talking to people about this is whether you can avoid a two-tier culture.
Whether you can really promote the values that you stand for in a completely remote way or whether overtime those things are going to dissipate a little bit and you’ll end up with people wanting to revert to the office, and is that something you’ve managed or do you think that’s looking further ahead?
work culture examples
Kevin Cook: So I think it depends a little bit – a lot of companies we’ve seen are requiring people to come back two or three days a week and by doing that, I think you’re sort of setting your stall to say, “we think that working in the office is better, but we’re allowing you to spend some time away from the office” and we’ve very deliberately taken a different approach to that which is we’ve said to people “remote is first, and you can come in” and so I think maybe just in the framing of the question a little bit, people are not made to believe that “oh well I kind of should be in the office”, or those folks that are in the office are probably going to be better regarded in the eyes of management, so I think from a perception perspective the way that you frame the question can be quite helpful.
And I think also in terms of the way that we interact, we very much to continued to use a lot of the tools that got us through the lockdowns from a collaboration perspective and from a team engagement perspective and I think as long as we keep those up and so whether you’re in the office or out of the office people still engage, even if they’re sat opposite each other at a desk they will engage via slack on a group that has all of the relevant people in it rather than having a silo conversation that obviously the people that are not in the office can’t hear. As long as you’re able to continue to promote that, I think that you can avoid that feeling of a two-tier culture between those who are in the office and those who are out of it.
Lucy Lewis: Now I’m going to get to ESG but before I do that, one last question because last month on the podcast I spoke to Dr Eliza Filby – she’s a generations expert, she’s a historian of social contemporary values and we were talking about what motivates people to work and one of the really interesting things she talked about was different statuses and perceptions that different jobs have and she explained that actually, in this current moment if you’re working in a technology start-up culture that’s a really desirable position to have – it’s a really desirable status.
Do you think the employment deal is different when you’re working for a start-up? How does it compare with the traditional kind of big corporate business?
working for a startup
Kevin Cook: So obviously I can’t speak for all scale-ups, start-ups, what have you, but I can tell you our own experiences and those of a lot of companies that we see that are similar to ours, which are that people come to work for TreasurySpring or come to work for a particular start-up, I think generally because they want to be there for something beyond the pay cheque you know, and I think particularly for the generation of folks who are coming out of university or education and into work right now, it feels to me like that’s more important than ever – that people want to be doing something that they can really buy into, something that they can believe in or you know, for some decent period of time, something that they can invest in, or if they can’t find that, then you end up with a much more transactional relationship and those transactional relationships that we see a lot of the time with bigger companies are “well, okay, I’ll take this job here, it moves me to a certain place along the traditional career ladder and I’m going to earn X amount”.
You know, we very much try to make sure that we pay people good market salaries but we also very much incentivise people by equity in the business, so everybody in the firm irrespective of their level has options in TreasurySpring and will do well assuming that TreasurySpring does well and so they’re all both kind of mentally and actually invested in the business and in its success and I think people are always very interested in why we do what we do, what drives us.
We had a team event just last week and one of our newer employees was asking “why do you do this? Like what’s the goal? Where do you want to end up from it? Is it a certain amount of money? When do you sell it?” and you know, explaining – I was with one of business partners and we were explaining to him that for us, this really wasn’t about money, there were infinitely easier ways to earn money than going and trying to build this business, but it was about the fact that we saw a problem that we thought was fairly deep-rooted and hadn’t been solved for a long time and we thought that it would be pretty cool if we were able to solve it both from a sort of intellectual perspective, from a personal achievement perspective, but also from the perspective of being able to change some of the largest, deepest capital markets in the world to a place that operated more efficiently, more robustly and more safely ultimately and I think – it’s difficult to tell for sure – but I think that the team generally buys into that and appreciates the fact that that’s why we’re here and as a result, that’s why they’re there and so yes, of course everybody needs to get paid and everybody needs to earn money but I think with a lot of scale-ups/start-ups there is a purpose or a desire for a purpose that goes a long way beyond that traditional contract between employer and employee.
Lucy Lewis: Thanks Kevin and thank you for sharing that and your experiences. It’s really useful. I am now going to come to ESG because one of the things that you know, we tend to think about when we look at start-ups/scale-ups is that their key focus is funding and obviously attracting investment but at the same time, we’re seeing this idea of ESG rising up the agenda in terms of consumer reputational risk and we’re also seeing it become more of a focus for investors and so, I’m wondering whether you think that the ESG demands on companies and fund managers, whether that’s shifted over the past few years and I mean at every stage of the investment process, so selection, due diligence, final investment –
has that changed and if it’s changed, what is the thing that’s now really important to focus on?
esg investing
Kevin Cook: So, I think I’ll answer the question in two ways if I may because we’re in a slightly strange position that we are both a venture capital backed corporation but we’re also a regulated fund manager and so, when you say “investors” I think of that in two different ways – I think of investors in our products, so our clients, the people who are coming to our platform to place their excess liquidity into underlying banks, governments, corporations what have you and I think if you look in that space, so sort of the investment funds space, I think there’s been a massive trend towards ESG over the course of – and it’s been coming probably for a decade but I think very much since the beginning of the pandemic it’s accelerated and maybe our bit of the market, so the cash management segment of the market, is one of the later ones to the party because I think historically people have perceived that ESG was something that was only relevant to long-term investors, to people who were buying equities in companies and they didn’t really see how that necessarily applied to short-dated fixed income or cash management investing. I do think that’s changing – I was on a panel just yesterday with the ACT – Association of Corporate Treasurers – cash management conference talking about this very subject because we are seeing from our clients, from our issuers, that it’s something that their stakeholders really care about and people are trying to find their way to understand how can they be better, how can they do things that meet the sustainability and the ESG goals of the organisations that they represent and ultimately, the stakeholders in those organisations.
If I think of investors in the context of our particular business, so venture capital investors, I think that again big trend towards ESG but in a slightly more focussed way perhaps, so there are lots, there’s huge amounts of money going into climate change start-ups, people who are doing carbon offsets and lots of other clever technological ways in order to help – whether it be different farming techniques and so there’s a huge business in that and I think again, if you look at where these venture capital investors are funded by, it all goes back to the long-term holds of capital – the pension funds, the insurance companies, the endowments – because these people are representing you know, each and every one of us, and therefore the groundswell of opinion is the time to think about ESG is not in five years or ten years, it’s now and so that is then translating through the investment universe and finding its way into particular pockets.
I would say that there are still plenty of scale-ups/start-ups that don’t have obvious ways where they contribute to something that is directly relevant to an ESG agenda and I think venture capital investors are fine with that and are still very happy to invest in things in kind of non-ESG sectors, albeit that I think even in those sectors the investors and increasingly employees want to understand what the views of even an early stage company might be towards its carbon footprint or to try to do something to foster that ESG agenda.
Lucy Lewis: Yeah and that’s really helpful and certainly your last point about internal pressure from employees, businesses of all size, that’s something that we’ve been exploring quite a lot on the Hub.
I guess sort of looking at it from a practical perspective, ESG is becoming more important – we’re seeing that changing – a start-up business or a business going about looking for investment in a sort of scale-up cycle, how do you go about articulating your ESG proposition you know? How do you go about deciding what the right metrics to measure are and is it easy to get investors to focus on some of the things that we talk about on the Hub, so some of the future of work sort of related trends, creating tangible value from people for example and your approach to managing your people – are those easy things to do?
esg issues
Kevin Cook: So I think maybe to answer the second bit of the question first, which is you know, investors are very focussed on team and culture and dynamics, so you know, I think almost any venture capital investor will tell you that ideas are cheap, execution is the hard bit and in order to execute, it’s absolutely imperative that you have a team and a culture that has bought into whatever the mission of the particular company is and so, I think that has not necessarily with a specific focus on ESG albeit that the G of governance definitely comes into it there – that’s been something that venture capital investors have realised for decades.
Now, I think when it comes to an ESG agenda, again, it probably depends a little bit on the business that you’re in – you know, if you’re in food delivery then it’s quite easy to understand how you might advance an ESG agenda in things like supply chains and packaging and delivery and logistics and all of those items.
If you’re in finance like us, it’s a little less obvious and so we are actually now launching new ESG products for our clients, again in response to market demand but I think as a start-up you always have to be careful that you’re not greenwashing or you know, paying just lip service to something, so we were looking for instance at whether we should engage in a carbon offset programme but the fact is that you know, we’re a small 20 person technology business that works in finance and has very little carbon footprint at all and so, putting out something that says, “you know, we’re a net-zero company” it’s great but it’s not very hard for us to do so it doesn’t feel like there’s anything hugely genuine in that, and so I think there’s very much an increasing awareness of there are always opportunities for people to do things for the right reasons, but also sometimes because they feel like they need to or for the wrong reasons. So, certainly for us, not being considered to be engaged in any form of greenwashing or purely paying lip service is something that’s been really important as we start to think about how we better engage with that ESG agenda.
Lucy Lewis: One of the things that we talk quite a lot about when we look at the future of work particularly and when we look at this idea of ESG is whether we need more legislative change or more regulation, possibly more mandated reporting – taking things beyond the sort of voluntary commitments businesses have around ESG or actually partly what we’ve been talking about here – the soft influence of investors.
Do you think that to really drive progress for the ESG agenda we need to have something that’s more concrete, whether it’s legislative, regulatory, mandated reporting, targets for example?
esg reporting
Kevin Cook: I don’t know if this would be a very popular view, but my honest view is no because I think that regulation particularly at a time where everybody’s still trying to understand exactly what we mean by a lot of the terms that get bandied around in this bit of the market, and trying to find the right ways to measure the sustainability of particular companies or particular activities, you know, still very vague and opaque and so, in general, I’m sort of a free marketeer and believe that the market will come to a better solution than regulators often can and regulations often bring with them unintended consequences – regulators are often chasing their tails a little bit and the market just evolves a couple of steps ahead of them the whole time, but I think that’s particularly true when you’re looking at something that’s more of a frontier like ESG and I think it would be very unlikely that if we put regulations in now, they a) wouldn’t be out of date very quickly, and b) we would have got it exactly right.
So, in general, I think it’s much better to engage in these conversations as market participants, as investors, as companies, employees and try to find our way to the best path and to the extent that regulation needs to come later – sure that may be a necessary, in order to standardise some of the reporting in order to make sure that we can get the right level of transparency for investors. I think if you go too early, it can be counterproductive.
Lucy Lewis: Thank you, Kevin. It’s been really fascinating talking to you. I’ve got one final question and actually, it’s a question that I’ve been asking everyone on this podcast series:
We know that the world of work is going to look completely different in ten years’ time and probably in ways that neither of us could predict, but if sitting here today you had the power to ensure one change for the workplace of 2032, what would that be?
Future of Work
Kevin Cook: Assuming that it’s going to be impossible to teleport myself straight to the British Virgin Islands for a bit and then back to my desk and then to the ski slopes which I think is probably a bit of a big ask, as amazing as technology is.
I think that some of the challenge for now is that we are still living in a remote world with all of the methods of communication that we started to use during, and really accelerated the use of during that pandemic period, but we’re also now back into the real world with all of the methods of communication that we use in that and I think – as mentioned earlier – I think it’s really important that you manage those in order not to have a two-tier culture but I do feel like at the moment it’s quite easy to suffer from information overload when you’ve got messages coming through on multiple different systems, you’re talking to people in real life, you’ve got a phone ringing and I think humans need to find a way to better compartmentalise some of the notifications.
You know, there’s that screen time app on the iPhone that tells you how many notifications you’ve got and I think one day last week I had over 500 notifications come in and so, I think trying to manage and streamline those methods of communication in a way that enables us to better compartmentalise the time that we are in an office, understand what we’re there for and deliver that, versus you know, maybe when we’re working remotely is you know, something that I’m sure that the market will evolve to and probably a long way before ten years, but I think that’s something that is definitely causing angst to a bunch of people right now and probably isn’t great from a mental health perspective either – oh, and teleportation!
Lucy Lewis: Ha, well I completely empathise with that – the information overload and maybe there is the idea for your next start-up having tackled the one that you have at TreasurySpring.
Thank you so much Kevin for joining us, for your insights both about TreasurySpring and the journey you’ve been on but also about the ESG agenda and sharing with us some thoughts about how investors are looking at that.
If anyone listening would like to find out more about TreasurySpring, you can visit www.treasuryspring.com.
Thank you.
Kevin Cook: Thanks Lucy.