Welcome back to Count Me In,

the podcast that looks at business
issues and trends from the management

accountant's perspective. Today,
we are speaking with John Greene,

the CFO of Discover Financial Services,

the company behind the Discover credit
card and the television ads with the

catchy tagline, "We Treat
You Like You'd Treat You".

I'm sure you've heard the term
financial transformation before,

which is basically the process of bringing
digital tools and technology to the

finance team inside organizations. Today,

we are gonna look at how that process
actually works at Discover and why it's

critical to strike the right balance
between driving innovation and making sure

team members feel empowered
along the way. Let's get started.

So, John, I just really want to thank you
for coming on the podcast today. It's,

really a pleasure to have you on and
today our focus is gonna be around finance

and innovation and how those two connect
together. And so as we start off,

I just want to ask what are your guiding
principles when it comes to finance and

innovation and how they connect.

Great. Adam, great to
be here. So, you know,

my guiding principles are first,

we want to make sure we have the right
people and the right sort of jobs.

So by that, I mean, people with the
right skillset, the right values,

high level of integrity that are
working towards a common mission,

which would be to going to
benefit our customers and the

organization and the financial outcomes
that we're seeking. So that's really,

really important. And being able
to connect the organization mission

to individual objective's
really, really important,

both from an innovation standpoint, as
well as from a team building standpoint.

And then the second guiding
principle would be to ensure we have

the right organization design and the
right structure to make people successful.

So that includes having the
right level of technology,

the right commission,

the right focus on innovation in
order to have people feel like

they're empowered to be able to make
the changes that we're seeking to drive

within the organization.

But then when you look at innovation
from an organizational perspective,

is there like a definition
of what counts as innovation?

And then what does that
look like for each employee?

Yeah, so for me, innovation is a
really, really broad concept. It

can be as simple as changing
the way we do do something on a

day to day basis, which
would be innovative,

or it can be leveraging
technology in entirely different

way or leveraging new technology
to drive innovation. So, you know,

a couple examples of kind of changing
the way we've done things here

at Discover, without the benefit
of technology would be, you know,

our journal entry process.

So we were doing almost two,

2000 journal entries a month.

Every time we closed the books and
through some process redesign some

change of policies,

as well as taking a different look at how

we focused on certain accounts,

we reduced the number of journal entries
we did on a monthly basis by about

40%. So,

think about it. That is, that
is 400 entries that, you know,

someone doesn't have to
kind of put together,

get the backup file, and then review.
So, you know, without technology,

a high degree of innovation there in terms
of process redesign, we did the same.

We did the same sort
of thing with our FPNA,

processes. So think budgeting
and forecasting. We,

took a look at what was
important for the organization,

how timely we needed updates on,

where the company was going financially.

And we eliminated, one third
of the forecast we were doing.

So what went down from six to four,

what it did is it freed up capacity
to spend time on analytics.

Now,

there are two examples that
involved process redesign,

not necessarily technology.

Now we've deployed RPA, so

we call them bots here in
Discover and, you know,

that has also enabled us to
further reduce journal entries.

It has also taken manual
work out of a number of

different areas within the
finance organization. So,

that that's been a win. And on top of it,

we switched out from an old McCormick
and Dodge, general ledger system,

and just implemented, Oracle
cloud, here. We put it in about,

a year and a half. It went
in, frankly, in a really,

really smooth way on time under budget,

but what that's enabled us to do is
take out nearly half the cost centers we

have here. So,

the combination of kind
of process redesign and

leveraging technology and new technology
we've really changed the way we work.

And we freed up significant
amount of time to analyze the

business rather than tell the business
or report on what has happened in the

business. So as you've freed
up that time to analyze,

have you seen, have you already been
seeing the benefits from even team morale

being able to change their
job description of, Hey,

I'm going to stop these 400 extra
journal entries to analyzing something

else, has that improved even just
employees as they get to do new things?

Yes. Actually, so, you
know, change can be,

you know, harder on some people
than others. And so what,

what we've tried to do
here is focus on a culture

of, of creating positive change that
will improve analytics and efficiency

without the risk of job loss. So in
the situation we're in right now,

we have a level of normalized turnover,
just like every organization does.

And we've been able to absorb that

turnover redesign, you know,

people's kind of responsibilities or

organizations without impacting kind of
employment in a negative way by that.

I mean, you know, we haven't had
wholesale layoffs or reductions.

What we've done is enrich people's
jobs by taking out what I'll say

is more transactional or
non-value work. And, you know,

that's translated into some positive
results on our engagement surveys.

And I feel like it's really
been beneficial in terms

of motivating some folks as
we've been able to expand job

responsibilities.

That's amazing to hear that that's
the initiative you've taken.

I know that I'm sure the
employees appreciate it,

but it's also an innovative way of,

looking at the human capital and investing
in them as opposed to just slashing

them and saying, well, we
need to get rid of them.

Yeah. And you know,

lot of credit for that
is to the organization,

in the entirety. So
Discover spent, you know,

decades trying to create the right balance
of financial performance and culture.

And, you know,

the folks that come here,

I think have enjoyed that aspect of the
culture in terms of trying to create

an atmosphere that, you know, operates
with as little bias as possible,

that values innovation,
that if values change,

but also respects kind of human capital
and tries to create the best experience

for our teams.

So you've been talking about the great
improvements and innovations that have

happened through technology
and other ways that, you know,

have helped the journal ledgers
and using RPAs and bots.

But what changes have you noticed in
your responsibilities, and expectations,

especially during these
last two years with COVID?

Yeah, so great question. So, you know,

the core responsibilities
haven't changed really.

But what has changed as is the,

focus points, right? So
when the pandemic hit,

you know,

our responsibility collectively here
as leaders was to first ensure people

were safe. The second was to make
sure that we created a remote

work environment that allowed us
to get our core responsibilities

done, and then it, certainly evolved
to, okay, can we close the books?

Can we execute on our
public disclosures and

earnings calls? And, while doing that,

also making sure we have plenty of
capital liquidity and our credit.

So we're a lender. So, you know, when
we lend money, we want to make sure,

we collect it or are
within our risk tolerances.

So we spent a lot of
time focusing on that.

And our finance organization
was instrumental in terms
of the value helping the

business evaluate kind
of the trajectory of

the credit portfolio,

the trajectory of our liquidity and

capital. And then also really
importantly, focusing on,

at that point, controlling expenses,

given there was so much uncertainty.

Then as we came out of the
pandemic, really the focus changed.

So the focus turned to, okay, how
can we, how can we grow profitably?

Where can we invest?

Where can we allocate expense
dollars in order to get

the best return for our
shareholders and that evolution,

the ability to pivot from kind
of one focus area to another

at the right time, really,
really important. So, so there,

there's a saying you want
to go to where the puck will

be, not where the puck is.
And so, for hockey fans,

they'll appreciate that comment,

but certainly being able to
anticipate and get to the right spot

timely so that we make good decisions.
And we execute strongly really,

really has been a focus
point for, you know,

our leadership team and the
finance organization as a whole.

And it seems like the innovative
changes that you've discussed earlier,

have a big effect on being able
to meet those needs. Right?

Yeah, absolutely. And, you know,

we've become much more
effective as a finance

organization, leveraging
technology and innovation.

I feel like we've become a
improved business partner to the

organization that was, you know,

a key contributor to Discover
delivering record results in 2021.

Now 2022 looks to be a, you know,

really positive year
as well. And, you know,

my hope is that we'll continue that
strong execution to allow the business to,

continue to grow profitably.

Definitely. So just before we
close, I was just thinking about,

you know, as you're working through
process improvements and, you know,

innovation within
finance, helping the team,

see the big picture can be difficult.

Can you maybe give some insight of what
it was like as you were going through

these innovative process improvements,

what it was like to help the team
stay on task and get on board

as change is difficult as we've mentioned.

Yeah. So, really good
question. So, you know, for me,

the first bit is to make sure that the

organization's strategy is
well communicated so that

we can connect it to some aspect
of every single person's job

within the finance organization.

So we spend a lot of time in terms
of communicating kind of what's

important for the organization
and the aggregate.

And then how does that translate
into people's jobs? We also,

as a finance leadership
team launched what we call

our, the Discover Finance and
Corporate Services Success Traits, and,

that, that launch of that,

which I'll explain and a minute
was to give our teams the tools

to be able to continue to execute
and support the business. So,

the success trait, as we define
them are critical thinking.

So analytical thinking and an honest
approach to analysis. And by that,

we mean, you know,
looking at the facts, not

necessarily judgments,

but lay out the facts and then
using those facts to make judgments

really, really important.
The second aspect,

which I touched on
briefly was communication.

So being able to communicate
with influence in

order to ensure that
when decisions are made,

they're made free of bias and based
on actions that will help us deliver

on our strategic objectives.

There's also an element which is coaching
and providing feedback with the right

level of empathy and specificity.

So that our teams learn from what
they've done well and what they can

do better. And then a
core component also is

driving digital ambitions.
So embracing technology,

embracing concepts of
continued improvement,

improving insights and analytics
through leveraging technology

and proposed solutions,

that'll help deliver kind of new tools
and new capabilities to the organization.

And then the last two, I
won't go into detail on these,

relationship and team building,
really, really important,

so that we're effective as an
organization. And then lastly execution.

So being clear on what you're trying
to do, and then execute in a way that,

is skilled to, to get the best outcomes.

This has been Count Me In,

IMA's podcast providing you
with the latest perspectives
of thought leaders from

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