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The Future of Work is in Diversity and Innovation with DJ Casto, Synchrony Financial

Kristen Bellstrom, Deputy Digital Director, Fortune and DJ Casto EVP & Chief Human Resources Leader Synchrony

Synchrony isn’t your average financial services company. The company has designed diversity into its DNA – from the boardroom to the call center. Combined with its start-up, agile approach, how employees work is critical to driving innovation at speed and scale.

As emerging technologies such as artificial intelligence (AI) transform every industry and profession, Synchrony helps employees deepen their skillset through an ethos of learning and technology training that enable higher-value work and responsible use of AI systems. The company also helps create a local pipeline of STEM talent through its public-private partnerships and real-world skills applications.

And it is driven at the top as it is infused throughout. DJ Castro will share insights into the company’s unique approach to innovation, and how its commitment to a diverse, skilled workforce unlocks the value of every person within the organization, living the Innovation By All model. DJ will offer her perspective on the need for businesses to infuse diversity of thought now and into the future to deliver long-term growth.

Since being spun off from its parent company in 2015, DJ has led Synchrony with a strong vision and has created a culture of inclusion driven by employees, advancing innovation at every level.

Key Takeaways:

• Develop an understanding of how inclusion, innovation, and responsibility in the AI era maximizes the human potential for all

• See how an organization’s diversity of thought and skills initiatives are integrated into its business success strategy.

• Hear practical advice for how leaders can create a truly authentic Innovation By All culture.

Show Transcript

Interviewer:                     Hi,  DJ.

DJ Casto:                           Good morning.

Interviewer:                     I have to say, before I interview people for the first time, especially if I haven't gotten to interview them before, I obviously like to read up, and see maybe if I can find some videos of them speaking. And did you know that there's an actual deejay, DJ Casto?

DJ Casto:                           I didn't know that.

Interviewer:                     There is.

DJ Casto:                           How was he?

Interviewer:                     I mean, I listen to a lot of house music.

DJ Casto:                           Okay.

Interviewer:                     I was a little confused about how it'd fit into the summit, but-

DJ Casto:                           You didn't know what this was gonna be like.

Interviewer:                     Should check him out. But we are not here to talk about house music. As you just heard, the background of Synchrony is that it was originally a company that ... A business unit within GE, and in 2014, it spun out into its own company. You were with the company at that process of the IPO. GE is known for having a very strong and particular corporate culture. It would have been easy for Synchrony to just kinda continue that.

DJ Casto:                           Yup.

Interviewer:                     But you didn't. You decided to take a moment to think about what you wanted to keep from that old culture, what you wanted to jettison, what new things you wanted to add. So, can you tell us a little bit about that process?

DJ Casto:                           Yeah, absolutely. It was a remarkable experience to go through. I think at a time, when we were separating ... GE capital was a [inaudible 00:01:26], for those that are familiar with the financial services [inaudible 00:01:28].

                                           And so, there's a ton of regulatory work that had to happen for the approval, and our ability to separate and become our own independent company. And so, where we could've just been laser focused on that work and said, "Hey, you know what? We'll get to the culture elements a little bit later. We'll think about who we want to be after we actually officially separate." Margaret, our CEO, really said, "We have to kinda double down on the culture, and we have to help explain to our employees the things that we're gonna protect and ensure we keep as we separate, and what are the things ... As you get to kind of whiteboard and rethink who you want to be, where you want to focus."

                                           And so, we brought in some partners, one being Great Places to Work, who has been just remarkable for us, in the way that they focus on trust, which was critical. Our employees had to trust where we were going with this IPO and separation. We also partnered with the Purpose Institute, and reframed our purpose and values, and really explained to our employees that this was gonna be our way of identity, how we were gonna lead. We're a leadership-based organization, right? Values-based. And so, it was really important, and we think it helped us to get through a really aggressive timeline to IPO and separate, and it has really set the company up for success as we've been on our own now.

Interviewer:                     I mean, can you tell us maybe an example of something that you kept from the GE culture, or something that you decided didn't fit with what you saw as the future of Synchrony?

DJ Casto:                           GE was very well-known for their leadership development. They had a ton of great, kind of iconic leadership programs, and we wanted to ensure our employees felt that we were gonna give the same level of commitment and investment in leadership development. So, we kept it, and we took their early leadership programs, and modified them to become more specific to us. Right? When you're GE, it's this conglomerate, and you're becoming more of a general manager mindset that sometimes didn't sync up on the industrial side, as it did in financial services. So one thing we ensured we protected, and really invested in in a bigger way, in a more unique way for Synchrony, were our leadership programs.

Interviewer:                     Okay. Some of the employees at Synchrony had been at GE for a long time, I imagine.

DJ Casto:                           Yeah.

Interviewer:                     And had been living that culture, and that way of working. As the HR leader, what did you do to help people sort of transition to this new culture?

DJ Casto:                           Well, you know, again, we had a great culture to start with, and we kept reinforcing that along the way. We want to double down and protect the things that got us here. We want to celebrate our heritage, right? But then, also kind of lean in to this company we want to be. We called ourselves like an 85-year-old startup. Right? We started with financing GE appliances, and now today, we've got these amazing partnerships with PayPal and Amazon, that are really kind of future-forward. And so, we have to continue to be more agile than we've ever been before. Right?

Interviewer:                     Mm-hmm (affirmative).

DJ Casto:                           And so, we want you to be the great leaders that you've always been, but we also want you to think about agility. We want you to ensure that you're being a critical thinker and creative. Because if you're not focused in those areas, and we're not all kind of moving forward in that same direction, the competition is gonna beat us, and we have to instill this winning culture at Synchrony that's gonna allow us, in an uber-competitive time, to really differentiate, and win new and different clients, PayPal being one of those.

Interviewer:                     Yeah. One thing that I know that Margaret Keane, your CEO, talks about as being important to her as far as the culture goes, is this idea of acknowledging that things happen to employees outside of work, and that you bring some of those stresses or difficulties that you might be dealing with at home or in your community ... You can't just kind of check them at the door.

DJ Casto:                           Yup.

Interviewer:                     So, can you talk a little bit about how that has sort of manifested itself at Synchrony, and how that has helped build your culture?

DJ Casto:                           Yeah, absolutely. First I do want to say, on Margaret's behalf, I know you were expecting her here today. She is a remarkable leader. Unfortunately, her brother has been battling cancer, and he lost that battle on Sunday. And so, she is with her family, and I think that speaks to her character and what she prioritizes in life. It goes back to what we're saying. And so, I did want to just say that to this organization. I know you were expecting a Fortune 500 CEO, one of the most powerful women in finance. You got me.

                                           But at the end of the day, she leads by example, and she talks all the time where ... And we heard this from one of our presenters earlier today. Listen. You can't departmentalize your personal life and your professional life. Right? In today's world, with everything that's going on in society, and everything that's kind of out there, we need to be a safe zone that allows our employees to bring their full self to work, that allows our leaders to feel comfortable engaging on really hard topics. I thought Kelly did an amazing job prior to me, coming in here really talking through some hard topics that are on a lot of our minds as leaders of these big companies.

                                           So our cornerstone is, "Be your full self." Right? And if we're gonna say that, we've got to deliver with leaders who are comfortable kind of going there. And we don't have all the answers. I think for us, we're just trying to be honest, authentic, real in these discussions, to say, "We don't know what we don't know." I don't really know what's the right way to answer that, but what I will commit to you is that I'll listen, and what I will commit to you on is that we as a leadership team will take all that in, and see where we can help support our employees on this kind of personal and professional journey they're on.

Interviewer:                     You mentioned the need for innovation. That's obviously a big theme that we'll be talking about today. I'd love to hear a little bit about how you've tried to build this culture of innovation at Synchrony. I know one thing that you are doing is that you actually have innovation centers.

DJ Casto:                           Yes.

Interviewer:                     Tell us a little bit about those, and how they work.

DJ Casto:                           There's two examples that I'd love to talk about that we have. We have empowerment stations, and we have innovation stations. To your point, right?

Interviewer:                     Mm-hmm (affirmative).

DJ Casto:                           If you think about Synchrony, we're 17,000-plus employees, in the U.S. as well as Asia. Our employee makeup is, of those 17,000, around 13,000 that are in our contact centers. These are the individuals that are answering the calls from our customers, our cardholders, and they oftentimes have the best ideas. And so, what we tried to do is create, in a formal way, and encourage our employees that when they see something is broken, when they feel like they aren't anchored in providing the best customer experience ... If they feel like one of the other cards that are in their wallet are providing a better service, in an area that we aren't offering today, tell us about it. Right? And so, we actually dedicate time where our associates can come out of their jobs, into these innovation stations or empowerment stations, and really work together on solving problems.

                                           We also have an EVV system, where employees at any level in the company can kind of cascade these new ideas and concepts that they've seen out in the market, or internally to Synchrony, so that we can look into that and help prioritize our strategy for the future, to ensure it's really meeting our customers' needs. They are on the front lines every day, listening to our customers.

Interviewer:                     Right. To that point, of making sure that you're empowering all of your employees, one thing that was very interesting to me is that Synchrony made a change where you allow your hourly employees to participate in your employee resource groups. Is that right?

DJ Casto:                           Yeah.

Interviewer:                     Can you talk about why you made that decision, and what you think it is doing at the company?

DJ Casto:                           Well, this is where oftentimes, you've got to make sure, in any initiative that you're rolling out, that you're allowing access to every employee to participate. I just walked you through kind of our mix, and if 13,000 of our employees are on the phones, they can't easily kind of walk away and engage in a lot of these initiatives that we have across the company. Right? It's a little bit easier for our exempt, salaried employees to kind of say, "Oh, I'm gonna take 30 or 45 minutes, and I'm gonna go engage in this women's network discussion, or this Hispanic network discussion." But they can't, because they're scheduled.

                                           And so what we did is, we worked with our workforce planning team as well as our finance team, to ensure that each employee has the ability to engage 11 hours annually into some of these initiatives, because we want to make sure that the ones that are engaging kind of represent all of Synchrony, not a select few. And so, I just think it's a great way. They can actually schedule and clock out. "Hey. This hour, I want to be a part of the African-American network's sponsorship for black history month," or, "Hey, I want to volunteer for an event that's being sponsored by our women's network. It's gonna be offsite. I now can take two or three hours ... " That we're gonna pay for, as a company, and encourage them to participate and be able to engage.

Interviewer:                     All right.

DJ Casto:                           Thanks for that.

Interviewer:                     Let's take a minute to talk about AI.

DJ Casto:                           Yeah.

Interviewer:                     Which is technology that Synchrony is engaging with, and I'm sure many of your companies are, also. But I know for still a lot of employees, when you hear AI, you just think, "The robots are coming to take my job."

DJ Casto:                           They're coming.

Interviewer:                     And in some cases not exactly that, but many jobs will in fact go away.

DJ Casto:                           Mm-hmm (affirmative).

Interviewer:                     So talk to me about how, as a head of HR, you help employees with the anxiety around that idea, and then as a company, how you guys are working to train and re-skill people so that they might move into different jobs.

DJ Casto:                           No, it's a great question. I'll be honest with you. If you would have asked that question to me probably six months ago, I might have a little bit of a different answer, because I was trying to be a little more conservative in the messaging, to try to minimize the fear for our employees. But what I realized is, in the lack of our narrative, a narrative was forming by our employees. And so, we needed to become more proactive than reactive on what some of our commitments were gonna be.

                                           Again, Margaret and the entire leadership team got together, and we said, "What is our obligation? What is our responsibility in this space?" And what we said is, "We do have a moral responsibility, as a company, to ensure that we are creating and ... " I love this word ... "Intensifying the learning and development opportunities we're providing for our employees for up-skilling efforts." But what does that really mean, right? We talk to our associates and say, "Super agents are coming," but we haven't defined what a super agent is. And what we're basically saying is that through the unlock of technology, our associates will be able ... Instead of being in collections and customer service and fraud, down the road, they probably will be able to do all of it, versus being siloed in certain areas, because technology's going to allow that to happen. It's gonna allow them to focus on kind of that more strategic work, and the tactical elements hopefully are sun-setted through technology, and leveraged through AI.

                                           We just had a global town hall with all of our employees a couple weeks ago, and we brought up this discussion. We said, "Listen. We don't have, again, all the answers, but our commitment is to be honest and transparent as we're on this journey." And what I said to all 17,000 of our employees, is said, "All of our jobs will change and be impacted by AI and technology. Will some jobs sunset? Absolutely. But also, some new jobs will come online, and then other jobs will just modify, as the technology helps to advance the work." And so, what we're trying to do is engage our workforce early on, to be more proactive in investing in themselves.

                                           In our contact centers, we've said, "Hey, listen ... " And we just launched a new initiative. We're very proud that we're gonna go to $15 an hour as an entry rate, July 1st, for all of our employees across the board. It's a big investment from the company. But as we made that investment to take them to $15 an hour, we also had some silos that were being built based off of our historical comp philosophies, between collections and customer service and some of these roles. We eliminated that, as a part of some of our changes. And so now, employees can easily do lateral promotions into these different areas, that allows them to compete for future jobs in a better way.

                                           The other thing we've been looking at is partnerships. Again, because other organizations are either farther along on this journey, or some passionate organizations are out there to try to help close the gap on some of this skill development. In Ohio, where for Synchrony, in the U.S., is our highest employee population area, we have partnered with two organizations. One is called Thrive, and the other is Tech Elevator. What we're offering to our employees ... And we got this through some of the partnerships we have. Lowe's and Amazon ... Who are our partners. We provide their financing ... actually were farther along on this journey than us.

                                           But we went to our employees and said, "If you are willing to sign up for these boot camps ... " And that's what they are, to try to help people get coding skills, and some of these technology skills ... "If you want to sign up, we will fund this for you." In a pilot format, because we don't know. It's kind of test and learn, and that new agile methodology, where they will start to partner with these organizations to do these boot camps, and get trained for jobs actually outside of the organization. Right? And so, they could have an opportunity to leverage those new skills even faster than us. We're gonna pay for it, and we're gonna help invest in them to compete for these jobs of the future.

                                           The last thing that we did is we just reframed tuition reimbursement. Historically, we do a best in class tuition reimbursement. Up to $20,000 a year, we will reimburse for our employees. On average, most companies do $5,000 to $8,000. But what we are reframing is, we historically only invested in tuition reimbursements for jobs that benefited us. And we're still gonna do that. We have a ton of jobs, and a ton of need. But we also are opening up the tuition reimbursement for where we see there is a community need in certain areas. So in Ohio, and in Arizona, and in Florida, where we have large footprints, we will now be investing in ... If our employees choose to go down this path, in the theme of up-skilling ... To invest in roles in healthcare, as well as education. So an employee for us, if they want to become a schoolteacher ... Which, we all know we need more great schoolteachers here in the U.S. ... we will help fund their education to become a schoolteacher, and then they will leave us and join that industry. Same thing with healthcare. So, we're really trying to push our thinking around all these different areas.

Interviewer:                     I guess one question about that is, we're in an incredibly competitive talent market right now. Right?

DJ Casto:                           Yeah. Yeah.

Interviewer:                     So, what do you do to compete in that market, especially as you're sending some of your best folks out into the world to be teachers, or take other types of jobs?

DJ Casto:                           Well, listen. At the end of the day, I still have a ton of great jobs. Right? And I will have a ton of great roles in technology, and I've got individuals in my contact centers that are investing in themselves right now, and getting engineering degrees. I can leverage those degrees across my entire company. So, I still want to keep the best talent, but you go back to being a ... You know. What is our vision? Our vision is to help individuals achieve their ambitions. And so for us, if our employees have this ambition where they want to help, and invest in themselves in certain areas, be it healthcare or education, we're okay with that. And I actually think it's gonna allow those other employees that want to stay with us, respect us even more. They say that we're actually living our values, living our vision. I think that'll allow us to retain the best talent in the future, and it helps us just to be a moral, responsible leader, in the communities in which we do business.

Interviewer:                     All right. I think that's a great place to leave it. Thank you so much.

DJ Casto:                           Okay. Thank you.