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Welcome back to Count Me In,

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

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

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the CFO of Discover Financial Services,

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

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

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

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

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finance team inside organizations. Today,

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

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

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

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

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

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

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

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innovation and how they connect.

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

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my guiding principles are first,

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

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

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

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which would be to going to
benefit our customers and the

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

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really important. And being able
to connect the organization mission

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to individual objective's
really, really important,

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

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

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

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So that includes having the
right level of technology,

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the right commission,

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

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

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within the organization.

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

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is there like a definition
of what counts as innovation?

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And then what does that
look like for each employee?

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

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

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day to day basis, which
would be innovative,

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or it can be leveraging
technology in entirely different

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

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

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

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our journal entry process.

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So we were doing almost two,

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2000 journal entries a month.

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

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change of policies,

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as well as taking a different look at how

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we focused on certain accounts,

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

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40%. So,

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

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someone doesn't have to
kind of put together,

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

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

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We did the same sort
of thing with our FPNA,

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processes. So think budgeting
and forecasting. We,

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took a look at what was
important for the organization,

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how timely we needed updates on,

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where the company was going financially.

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

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So what went down from six to four,

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

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Now,

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there are two examples that
involved process redesign,

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not necessarily technology.

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Now we've deployed RPA, so

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

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that has also enabled us to
further reduce journal entries.

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It has also taken manual
work out of a number of

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different areas within the
finance organization. So,

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

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

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

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

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really smooth way on time under budget,

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

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have here. So,

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the combination of kind
of process redesign and

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

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And we freed up significant
amount of time to analyze the

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

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

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

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being able to change their
job description of, Hey,

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

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

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

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

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

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

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

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

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And we've been able to absorb that

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turnover redesign, you know,

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people's kind of responsibilities or

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

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

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

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

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

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

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

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responsibilities.

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

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

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but it's also an innovative way of,

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

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

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Yeah. And you know,

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lot of credit for that
is to the organization,

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in the entirety. So
Discover spent, you know,

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

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And, you know,

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the folks that come here,

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

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

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that values innovation,
that if values change,

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

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for our teams.

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

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happened through technology
and other ways that, you know,

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have helped the journal ledgers
and using RPAs and bots.

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

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especially during these
last two years with COVID?

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Yeah, so great question. So, you know,

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the core responsibilities
haven't changed really.

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But what has changed as is the,

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focus points, right? So
when the pandemic hit,

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you know,

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our responsibility collectively here
as leaders was to first ensure people

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

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work environment that allowed us
to get our core responsibilities

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

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Can we execute on our
public disclosures and

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earnings calls? And, while doing that,

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

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

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we collect it or are
within our risk tolerances.

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So we spent a lot of
time focusing on that.

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

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business evaluate kind
of the trajectory of

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the credit portfolio,

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the trajectory of our liquidity and

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capital. And then also really
importantly, focusing on,

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at that point, controlling expenses,

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given there was so much uncertainty.

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

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

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Where can we invest?

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Where can we allocate expense
dollars in order to get

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the best return for our
shareholders and that evolution,

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

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

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

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

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they'll appreciate that comment,

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

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

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really has been a focus
point for, you know,

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our leadership team and the
finance organization as a whole.

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

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

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Yeah, absolutely. And, you know,

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we've become much more
effective as a finance

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organization, leveraging
technology and innovation.

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

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organization that was, you know,

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a key contributor to Discover
delivering record results in 2021.

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Now 2022 looks to be a, you know,

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really positive year
as well. And, you know,

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

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continue to grow profitably.

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

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

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innovation within
finance, helping the team,

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see the big picture can be difficult.

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

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these innovative process improvements,

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

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as change is difficult as we've mentioned.

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

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the first bit is to make sure that the

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organization's strategy is
well communicated so that

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

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within the finance organization.

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

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important for the organization
and the aggregate.

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

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as a finance leadership
team launched what we call

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

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that, that launch of that,

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

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

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

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

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

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necessarily judgments,

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

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really, really important.
The second aspect,

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which I touched on
briefly was communication.

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So being able to communicate
with influence in

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order to ensure that
when decisions are made,

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

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on our strategic objectives.

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

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level of empathy and specificity.

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

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do better. And then a
core component also is

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driving digital ambitions.
So embracing technology,

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embracing concepts of
continued improvement,

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improving insights and analytics
through leveraging technology

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and proposed solutions,

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

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

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relationship and team building,
really, really important,

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

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

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is skilled to, to get the best outcomes.

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This has been Count Me In,

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

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the accounting and finance profession.

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If you like what you heard and you'd
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