Ep. 188: John Greene - Financial Transformation at Discover

Today we go inside the financial transformation process at
Discover Financial Services (NYSE: DFS) with CFO John Greene.
John joins Adam Larson to discuss how Discover’s focus on
innovation and corporate culture has empowered the finance team
to be better business partners to the entire organization.


Connect with John:
https://www.linkedin.com/in/john-greene-/


Full Episode Transcript:
Adam: (00:05)
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. 
 
Adam: (00:51)
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.
 
John: (01:08)
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.
 
Adam: (02:19)
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?
 
John: (02:29)
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%.
 
John: (03:33)
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.
 
Adam: (04:34)
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.
 
Adam: (05:46)
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?
 
John: (06:09)
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.
 
Adam: (07:23)
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.
 
John: (07:39)
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.
 
Adam: (08:22)
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?
 
John: (08:41)
Yeah, so great question. So, you...