October 11, 2023 • 35 mins
CEO of America’s Best Online Bank, celebrated digital innovator, and all-around great guy “JB” Brown shares the keys to building a culture that does right by customers and teammates. Plus, incredible insights on…
🎙️ Transforming a 100-year-old company
🎙️ Handling the first social media bank run
🎙️ Waiting—and waiting—for self-driving cars
🎙️ The brand power of women’s sports
🎙️ And being Father of the Year
Sometimes nice guys finish first!
Go Deeper:
📚 The Language of Trust, by Michael Maslansky: https://bookshop.org/p/books/the-language-of-trust-selling-ideas-in-a-world-of-skeptics-scott-west/11158970?ean=9780735204560
📚 No Rules Rules: Netflix and the Culture of Reinvention, by Read Hastings: https://bookshop.org/p/books/no-rules-rules-netflix-and-the-culture-of-reinvention-erin-meyer/13332186?aid=7391&ean=9781984877864&listref=the-careerist-professional-development-must-reads
💪 The Career Manifesto, Mike's full reading list, and other resources here: www.mikesteib.com
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Welcome Office hours, where we sit down with the chief
executives shaping the world and answer your most pressing questions
about leadership, career, and life. Mike steib and today's conversation
is a special one for me. Eight years ago, I
joined the board of Ally Financial in the midst of
a major turnaround. The company had not long before spun
(00:26):
out of general motors and an effort to survive the
financial crisis, and had just appointed a new first time
CEO and Jeff Brown. Today, Ally is a Fortune five
hundred company, the largest all digital bank in America, Money's
number one rated digital bank, and one of Fortune's one
hundred Best places to work. Our CEO, Jeff Brown, has
(00:48):
been recognized as American Banker of the Year, the Thirdgood
Marshall College Funds CEO of the Year, and today, my friends,
you get to meet this inspiring leader. So, Jeff Brown,
welcome to the show.
Speaker 2 (01:03):
Well, thanks so much, Mike. Great to be with you
and appreciate how you've been on this journey with me
at ALLI. So for your listeners, Mike has just been
a fabulous board member for us and runs leads our
technology committee on the board. And when you think about
how much of Allies transformation, which I'm sure we're going
to talk about, has been centered around digital and technology.
(01:24):
Mike's been just a great leader, a great mentor, a
great friend, and certainly a great board member and help
them drive our evolution. So Mike, it's a pleasure to
be with you and honored be able to get this opportunity.
Speaker 1 (01:34):
Well, thanks man. Today we got a lot of folks
submitted questions who are interested in the future of banking,
the future of auto, the beloved ally brand, the company's transformation,
and there's a big question in a lot of people's minds.
As my favorite one, I'm actually going to save for
the end. So the first we'll go right to it,
Christina and Almaha says.
Speaker 2 (01:54):
All I was once a part of General Motors and
today it's a big spintet company.
Speaker 3 (01:59):
How did that trans information happened?
Speaker 2 (02:02):
We really centered on this idea that the world is
migrating more and more digital. Let's build a digital bank.
It was more cost efficient, we felt it aligned with
the consumer. We were enable allowed to pay higher rates
because we weren't incurring the costs of running a brick
and mortar network. And then suddenly we had this dramatic acceleration,
(02:22):
and Mike to your point, which really over the past
eight or nine years has further exploded. So I think
back to you know, two thousand and nine you were
talking about, you know, a deposit booklet was around five
billion dollars to today, you know, a deposit booklet's approaching
one hundred and forty billion dollars. How the fast growth,
and that's really transformed our funding posture and along the way,
(02:46):
we've you know, improved our capital levels, we dealt with
our troubled assets. So it has been a great transformation,
you know again from a captive finance company into a
modern day fintech bank. And you know, we're very proud
of of the position we're in today.
Speaker 1 (03:04):
Toybe two things about the transformation I think are particularly challenging,
and you pulled off and I'd like you to share
a little bit about how. The first is the investments
that had to be made. It's really difficult as a
public company to give up on short term earnings to
invest in R and D technology, et cetera. And it
(03:24):
was some small fraction of the billion dollars you're spending
in roughly a billion dollars you're spending a year in
tech today that the company was spending when you came
on board. How do you make room for that investment
and how do you win the support of your board,
your shareholders, the team, et cetera to do what is
what is not cheap and not easy in transforming the business.
Speaker 2 (03:46):
Yeah. Great, great question, and obviously it's dynamic every single day.
But I mean you have to, you know, really subscribe
or set a long term vision and be committed to
sticking to that and recognizing, let you know, in the
short term you may have to make trade offs, or
there may be challenges, or this may be a bit
more painful than the investor community wants to see. But
(04:08):
if you can deliver, you know, the transformative results over
a three four, five year, six year, ten year cycle
and you can prove that out, people get on board.
And so to your point, Mike, I mean, the two
major areas where we've invested in the company outside of
people has been a technology and in particular, you know,
making large digital investments. Hey, if we set out and
(04:30):
our vision really was to be the largest and most
premier all digital bank and awards like you started with
Money magazine and Kiplingers and others have recognized us. You know,
it wasn't ever about the awards per se, but it
was we were going to build the best dam digital
bank that exists out there. We're going to be more dominant,
we're going to have better tech, We're going to and
with that, we believe scale's gonna come. And that's exactly
(04:53):
what's happened. So technology for us is really the singles
largest investment we make in the company. And then a
law on the way we recognize the importance of people
got to know who you are. They got to know
no longer GMAC, you're a totally different brand, a totally
new brand, and what do you stand for? What do
you believe in? And so marketing and branding has been
(05:14):
the second largest investment we've made in the company. So
we've been very strategic along the way of recognizing those
are two very important pillars if you want to get
to that end state of being the leading all digital
bank in the United States. So I'm very proud of
where we're at today, but I expect we'll have to
continue investing in both of those areas going forward. Fortunately,
(05:34):
we've had a board that's believed in that vision and
in that strategy and been very supportive and recognizing that
we've had to make some short term earnings trade offs.
But when you reflect on what's transpired and ally the
past eight nine years, it's pretty dramatic. The company we've
built today, and how do you.
Speaker 1 (05:51):
Get the talent to want to work here. We have
an amazing CTO in Satisha. There's no way he was
going to GMAC years ago, right, But what you built
something that attracts a really terrific leadership team and then
all the way down what's the pitch?
Speaker 2 (06:08):
Yeah, I mean the pitch is one largely about our culture.
I mean when it comes back and I think, you know,
back to my very first town hall as CEO of
this company, and this was before culture became the buzzword
in the world. The past five six years was really
talking about unifying our culture and empowering our culture, where
(06:28):
you know, it didn't matter if you had been here
for thirty years or you were, you know, a fresh
faced intern a week in the door. We were just
going to we were going to have a culture that
empowered people, empowered people to dream big, to think different,
to believe in change, believe in rapid change and if
you have a vision, we'll we'll put capital behind it
to you know, if we believe it's going to lead
(06:50):
to the right results. And so, you know, the culture
is the single biggest pitch when I talk about and
we just you know, welcomed in a brand new CFO
into the me. You know, we're super excited about that.
That so we've been you know, very strategic in adding
great new leaders to the team. Let all share this
philosophy of we're going to empower our people to drive
(07:12):
change and really create great results. And it's been really inspiring,
you know, incredibly proud of my leadership team. A number
of them are racking up awards left and right, and
that makes me very very proud of what we've been
able to accomplish. But they all believe that, you know,
we are unique. We are different from the rest of
the banking industry. But that's what makes it exciting. In
(07:34):
the case of Satish, you know, he was working at
a large technology oriented company and he wanted to come
to financial services. It's a very complex industry, but he
also wanted a platform where he could really evolve the company.
And you think again, whether you know it was a
robotic process, automation, cloud computing, now to AI satishe has
(07:55):
you know, he's having tremendous fun getting to lead all
these new ventures and verticals for ally. So it's been
great to see all these new leaders emerge.
Speaker 1 (08:03):
I think that's great. I mean, people, if you're ambitious,
you spend the majority of your waking hours for forty
years at work. It should be in a place where
you love the culture and you love the people, and
good people want to build things. And what the team
at all has been doing is building something something really special.
(08:32):
All right, we go next to Wallace in Utah.
Speaker 4 (08:35):
America had a financial crisis in two thousand and.
Speaker 2 (08:37):
Eight and then a multiple bank.
Speaker 4 (08:39):
Failures in twenty twenty three. For someone who doesn't work
in finance, can you explain what happened and whether we
should worry about a repeat as the last financial crisis.
Speaker 2 (08:49):
We have the fastest fed tightening cycle pretty much in
the history of our economy, and people were caught off
guard by how fast interest rates moved, so that exposed
some of the weaknesses and risk management of some of
the banks that went down. But also what's different this
time was, you know, relative to kind of two thousand
(09:11):
and eight and two thousand and nine is the emergence
of social media. And you know, the reality was, in
the case of one of the banks that really started this,
a tweet that was put out that suggested your money's
not safe at XYZ bank, and in literally a period
of twenty four hours, there was a forty billion dollar
(09:31):
outflow of retail deposits and commercial deposits from that institution.
You know, you basically had a modern day bank run
that started from social media. And again, not to blame
the tweet or whatever it was, I think this all
comes down to inappropriate risk management. But you know, it
has been fairly startling to see the pace of change
(09:55):
and the pace of stress. You know, So I think
a lot of this comes down to managing your deposit levels,
you know, understanding your customer base, managing your capital levels,
things like that are very important. And that's a lot
of the elements of risk management one oh one that
live inside of a bank, and certainly that Mike is
(10:16):
involved in a daily basis. Now, whether we're exposed to
more of this, I'd say, you know, again, we still
see the environment being very dynamic, but I think the
weakest players were exposed, and those have obviously been dealt with.
I think the rest of the banking system, and in
particular the regional bank institutions what ally falls under. We're
(10:37):
still very healthy, plenty of liquidity, plenty of capital, and
so I think we're all guarded right now, recognizing, you know,
there could be more stress, but I think the magnitude
what we saw in March I do not expect to
get repeated, you know, the rest of this year or
into the future. And I think obviously now we're all
preparing for enhanced regulation that may come upon the entire
(10:59):
banking industry. Let you know, as a result of the
banks that went down.
Speaker 1 (11:05):
I really feel for any company that does not have
the digital DNA like you've built at ally, because that
means you don't understand the consumer in this market. And
the banking crisis earlier this year showed that what's going
to drive consumer behavior in the future are the things
that are happening in digital. So for our audience, when
you think risk, like plan your life around risks that
(11:26):
you can't anticipate, and if you're not a digital expert,
no matter what industry, you have to be because the
consumer is absolutely. Selina in Paris says, it's.
Speaker 2 (11:37):
Been said that every business is now a tech business.
Speaker 4 (11:40):
How do you find this to be true on finance?
Speaker 3 (11:42):
What technologies will shape the future of thinking?
Speaker 1 (11:46):
JBI. I get to spend a lot of time with
the crypto heads who you know, tell me all about
how in the future finance is going to be all digital.
And I always ask, do you think we keep the
one hundred billion dollars like in a safe? It's you know,
finance is already digital. Maybe you could just for our listeners,
maybe who aren't in the banking industry or maybe not
in technology, help them understand how it all works and
then maybe touch on some of the essential technologies that
(12:08):
you see impacting the business going forward.
Speaker 2 (12:10):
Yeah, I mean, to your point, we are we are
certainly we don't. We don't have big vaults, big safes
anymore filled with CAFs or stuff with cash. You know,
ally doesn't even have its own proprietary ATM network. We
rely on others that are that are out there. But
you know, money movement today across the world has gone
all digital and seamless. And that's for you know, retail
(12:32):
consumers like you and I, but also for big businesses today.
So I think, you know, the evolution we've seen really
the past fifteen years has been dramatic where digital has
become you know, broadly accepted and broadly the way people
conduct their business and perform their finances today. And I think,
you know, there used to be there's a CEO that
(12:53):
I greatly admired, and he always had this challenge that,
you know, can you really digitize trust? And I believe
you I believe the banking industry, you know, has shown that,
you know, if you do things the right way, you
have the right technologies, you lock the house with great
cyber defenses and things like that, people will really trust you.
And so for us, you know, money movement, all the
(13:16):
things how we pay our bills today, it is already digital.
And and yes, so I certainly subscribe to banking and
technology or effectively one and the same when I think about,
you know, technologies that are going to shape the future.
And I just referenced a few of them in my
previous comments. You know, started with a few years ago,
we started spending time on you know, researching robotic process automation,
(13:40):
so very manual performing task and repetitive tasks how could
we automate those And in some respects that was you know,
a step one of this journey of artificial intelligence. We
were also very early adopters in an area of quantum computing,
and I'm very proud of the partnerships that we have
with Microsoft and others that are out there in the
(14:00):
quantum space. I got fascinated on quantum by going out
to a technology conference six seven years ago. And you
know today our setish, our chief technology and information officer,
has really latched on the quantum as being you know,
more horsepower to do, to process in a very rapid fashion,
complex algorithms, and you know, can that make us analyze
(14:23):
risk in a faster format? Can that make us decision
to the end consumer in a quicker fashion? And so
there's a lot of power in quantum. We're spending a
lot of time today migrating away from large data centers.
You know, when I think I got to ally, we
had four or five data centers we own, we relied
on others, and today, you know, we're utilizing much more
of a broad cloud framework because it's faster and more
(14:45):
horsepower to analyze. But the single biggest area that we're
spending a lot of time on today is is on
ai and how AI is going to revolutionize the world.
We don't think, I think necessarily that it means, you know,
I'm not out saying it's going to reduce you know,
five percent of our workforce or ten percent of our
(15:07):
technology workforce. We're not making those claims yet. But I
think we're recognizing let ai. While it presents some risks,
it also presents a tremendous amount of opportunity for the
for the company and for all industries as well. And
so I think this is one where where I would
admit Mike to you. But I've been surprised how fast.
You know, AI seemed like a concept that was out
(15:29):
there a year or two years ago, and now with chat,
GPT and barton others, it's been pretty dramatic how fast
this has come to market, and really others are starting
to use it. So it's an exciting space. We got
to be very guarded, you know, we're very cyber focused
here as an all digital bank, so you've got to
make sure your protections, you're back to your risk management
(15:50):
are in line. But we're certainly excited about the use
and the prospects of AI, and in fact, in just
a few days we will launch of our own internal
AI development and Mike will have a chance to share
that with you in just a few weeks at our
nextport media as well.
Speaker 1 (16:07):
Dah wait Amanda in Miami says, I love the Ally brand.
Speaker 4 (16:11):
It seems more genuine and real than typical bank marketing,
and all the stuff the company is doing around women's
sports is terrific.
Speaker 2 (16:19):
How do you build a national brand like that? Well,
I love it. Thanks, thanks for the support the question,
And you know, I think it starts with hiring a
rock star. You know, we have Andrea Bremer who's our
change marketing and public relations officer, and she just you know,
it's a month doesn't go by, it's usually a week
(16:39):
or two doesn't go by where she's not being recognized
with the new award. And she is just a phenomenal
leader in a powerhouse in building a great global brand,
and every award that comes her way she deserves. But
you know, several years ago we really started to look
at how do we get greater brand awareness, how do
we get greater greater connectivity, How do we tell the
(17:02):
Ally story in a different manner? And we latched onto
sports being a big mechanism of that. Let you know,
sports in a lot of respects that you know, you know,
it is a big unifier and it brings a lot
of people together. And even though there's you know, a
left or right side or two opposing teams, but people
come together and celebrate the spirit. And we thought that
was a very unique arena for us to kind of
(17:23):
get the Ally name out there. And so we planted
this flag in the world of NASCAR, the champions PGA Tour,
you know, now in MLS soccer, you know, sponsoring a
NASCAR team. But you know, the past couple of years,
we started really taking a look at you know, equality
is something that's very important at Ally, something we stand for,
(17:46):
and we started looking at you know, women's sports as hey,
this is a huge area of opportunity, and why don't
women athletes command the same respect or the same pay
or the same media rights and all those things. We said,
you know, let's put our dollars to work. And so
we really planted the flag and I applaud Andrea for
her creativity, her passion. And Andrea was a four year
(18:10):
starter of Michigan State Soccer so this is a great
alignment in Mike, what we talked about about. You know,
you're going to work somewhere for forty years, it's okay
to align your personal and professional passions. And she brought
that spirit and helped us really grow women's sports. You know,
we be recognized by a lot of senior media publications
(18:30):
and great other brands for what we're doing in the
world of women's sports. We're on every National Women's Soccer
League jersey as well, and more to come. We got
a great NCUBA kickoff event here in Charlotte, North Carolina
as to start the season with two amazing basketball teams
from last year, and so we're doing a lot more
(18:51):
in the area of women's sports. Expect even more to come.
There's a few surprises that are out there. But we
just look at this as a huge opportunity for us
to grow the brand and therefore grow ally overall. And
I'm so fortunate. You know, our great leaders like Diane
Murray who runs our consumer business, Doug Timmerman who runs
our auto business, they've really latched on and they believe
in everything that Andrew is building and that's helping grow
(19:15):
their businesses as well. So it's really exciting what we've
been able to put together. But it all starts with
having one rock star leader.
Speaker 1 (19:22):
There you go, and I would give you credit to
JB a lot. You came from a background, a cfo's background,
a finance background, And there's comfort in the kind of
marketing that goes in a spreadsheet. You say, I gave
Google a million dollars and we got this many clicks
and a click is worth thirty cents, and and brand
marketing doesn't work like that. Brand marketing is more magic
than it is math. And you really have to have
(19:43):
faith in the team that they can go out there
and create a brand for you. And they can't prove
to you tomorrow that the investment worked, but certainly everybody
knows ally, and it creates an emotion in people. And
that didn't come only from the quality of our products
and our services. It also came from the way we
tell our story through media.
Speaker 2 (20:00):
Exactly right. Thank you. I appreciate that. And I know
Andrew is going to love those comments too, like.
Speaker 1 (20:05):
She's asking more budget you watch yeah, Max, and Seattles.
Speaker 5 (20:09):
Is making statements on social issues like Disney, bud Light
and others have had to walk it back this year
in the face of negative consumer reactions. As a CEO,
how do you think about your company's responsibilities and how
you take stand on important issues while navigating this tricky landscape.
Speaker 2 (20:31):
Yeah, well, thanks for the question. It's an important one,
and I think your word of tricky is absolutely the
right description. I mean, you know, unfortunately, we're about as
divided as a nation as we've ever felt. I mean,
it's kind of fifty to fifty split down the middle
of what people believe in. I think, you know, at ally,
I think plumb is inappropriate or purple is an appropriate
(20:53):
color for us, because you know, it is sort of
a blend of the red and the blues. And you know,
we try to create a company that you know, really
stands for We believe in equality for all. And you know,
when I take this back to I'm not going to
comment publicly on every social issue that's out there. I
certainly will comment on the ones that I do believe,
(21:17):
you know, have an interest in our industry and an
interest in our company, and certainly anything that would make
any of our employees feel unsafe or unprotected, we will
comment on. But really, we're a company that tries to
stand for equal opportunity, equality for all. You know, we've
had a big focus on diversity, equity and inclusion again
(21:40):
since the very first stage I was on stage as
our new CEO. You know, it hasn't been a rush
since we saw some of the tragic events in twenty twenty.
You know, we have always stood for doing the right thing,
being an emotional company, but really one that's centered on
equality for all. And so you know, I try to
(22:00):
get our leadership team, and I really believe our leadership
team embraces those values and those morals as well. And
so again I think they recognize there's certain things, there's
certain issues that we're just not going to comment on.
They're not necessarily pertinent to allies business and our industry.
But when it comes time to protecting the safety of
(22:21):
our employees, we actually, you know, we absolutely will comment
on those areas and we've done that in the past.
But it all comes back to a quality for all.
Speaker 1 (22:30):
It also comes back to an external messaging that lines
up to the companies the company's values. And I watched
with some interest what went down at Disney, and you know,
I think it costs Chapeck's job but he was pressured
by employees into coming out on state legislation in Florida,
and then as soon as he got pushed back, he
blinked and he backed off. And you compare that to
(22:51):
say Nike. When Nike stood with Colin Kaepernick, they got
a lot of pushback and they didn't care. They believed
in what they were saying and aligned to the company's values.
It aligned to how the people who led the company felt,
and it was easy for them to stick to it.
And by sticking to their guns, it made it effective marketing.
It reinforced the values in their company. You can't fake
(23:11):
this stuff. People know when you're authentic and they know
when you're not. And what I appreciate about ally is
when Aly says something publicly to say very authentically and
it ligns up to who we are.
Speaker 2 (23:20):
Yeah, thank you. We try to be very aligned with
our value system and it's been great. But again, it
is a tricky landscape. Let's out there right it is.
Speaker 1 (23:29):
I'll note for our listeners, I'll drop it in the
show notes. I've read a great book called the Language
of Trust by Michael Mislanski, and he talks about how
companies are just not trusted anymore. People have been trained
to take that you think that you're lying to them.
And the art of being authentic, like really saying what
your company values and who you are and doing it
consistently something we're seeing so many companies get wrong and
(23:50):
you get it right.
Speaker 3 (23:51):
JB.
Speaker 1 (23:51):
But for those of us who are listening, who are marketers,
who are in the communications space, are just thinking about leadership,
I'm going to recommend this. I'll drop the book in
the notes. Commended TA in New York, just T.
Speaker 4 (24:03):
I'm Mike. Revenue from charging fees is important to many
bank's finances, but Ally came out of nowhere two years
ago and ended all over draft seeds. What was the
strategic thinking there? Has the decision worked out?
Speaker 2 (24:16):
Yeah, T, thanks for the question. It's something that we're
certainly extremely proud of. And again, I think it's an
example of us living what we talk about as three
little words, do it right. At Ally, that's a big
part of our culture, our value system, do the right thing,
do it right. And so you know, one of the
things that transpired with COVID is obviously you know February
March of twenty twenty, there's a tremendous amount of uncertainty,
(24:40):
you know, when you were going back to work, if
you were going back to work, if you were going
to survive. I mean, there was great uncertainty. And we
made a determination that we were going to pause, you know,
all fees, and we were going to allow deferrals, payment
deferrals of your auto loan, your mortgage loan, things like
that for up to one hundred and twenty days. And
that really allowed people to have the comfort that, you know,
(25:02):
if I'm not getting paid, or I just lost my job,
or I'm not getting tips or wages or things that
I was accustomed to, I don't have to deal at
least for four months with some of that stress. And
that was again a very proud moment for us of
doing the right thing, and we learned a lot. We
learned a lot that even though we offered that, a
lot of people continued paying their bills, paying on time,
(25:26):
doing the right thing, or didn't pay for a month
but then caught up the next month. But the fact
that they had those you know a bit of an
insurance policy really helped them. But we also started looking
at our fee structure, and ally is a very already
a light fee institution. That's not what we've made our
mark on, and we think this again seys us a
(25:47):
part in the world of banking. But we did look
at our overdraft fee strategy after COVID and started saying,
you know, really overdraft fees disproportionately impact the people that
are affected the most. And Diane Murray dan Ray, who
runs our banking business, you know, came and talked to
me and said, JB, I think this is an opportunity
for us again to live our values, to do the
(26:10):
right thing, and we recognize that yes, maybe maybe it's
a short term earnings give up, but the power of
living your brand, living that name of being an ally
was really worth far more. And so that's been a
tremendous decision for us. It's been a strong pride point.
I've been very happy let other financial institutions. Some have
(26:32):
dropped THEIRS as well, others have altered their levels. We
didn't do this because of political pressures. We did this
because we looked at our customer base. We said this
was the right thing to do. And I'm really proud
of Die and our leadership team for bringing this forward
and really I think it helped set us out and
was another uptick in our growth potential as a company.
Speaker 1 (26:52):
Sanjay in Mountain View, California says.
Speaker 5 (26:54):
Alla is a big player in auto with self driving
cars or electric cars, et cetera.
Speaker 4 (26:59):
How do you see the future consumer auto over the
next ten to twenty years and what will it mean
for the auto industry.
Speaker 1 (27:05):
I was glad to get this question, Jay, because you know,
it's my job on the board every quarter to say
the cars are going to drive themselves. So tell everybody,
like no one is closer to the research than you
and the team here, tell everybody what's really going on
in auto and what you see over the coming years.
Speaker 2 (27:18):
Yeah, Sanjay, thanks for the question. And Mike has been
great at poking and prodding on the board about you know,
the transformation of the auto industry in a really healthy way,
and that keeps us on our toes and keeps us
sharp and keeps us connected with the manufacturers and with it.
Speaker 1 (27:34):
Keeps not coming true.
Speaker 2 (27:35):
So thank you, thank you for the tolements. Well, it's
all good. But what I would say is, you know,
I guess with that tone, it's it's it's still evolution,
not revolution, and I think that's going to hold true
even for the next you know, fifteen twenty years or so.
I mean, first, you know, the current wave that's been
out there for about ten years is around you know,
(27:59):
electric vehicle, and you know, I think that's largely been
slower development than some expected. I mean, started with Tesla,
You're now seeing all the various mainstream manufacturers introduce an
electric models, some committing towards you know, most of their
fleets being electric. By twenty thirty, I think you'll start
to see a lot of the manufacturers back off of that.
(28:21):
And I think part of this is twofold one infrastructure,
you know, the US doesn't quite have the infrastructure to
support a mass migration to EV strategy. And then number two,
I think consumer demand, while it's growing, it's still very
light on a relative basis. And so I start with
EV and say, you know, we're watching kind of the
(28:43):
gradual migration gradual trends there. As it pertains to self
driving cars. I think, you know, there's a number of
companies that have been formed spin offs from some of
the big manufacturers like General Motors and others, to try
to focus on you know, autonomous driving, self driving cars.
And I think you know, the challenges are pretty severe.
(29:05):
I mean, you're starting to see development of you know,
things like hit the button your car can kind of
stay on the highway, or hit the button your car
can park itself. But I think the challenges of day
to day autonomous driving are still you know, again, I
think fifteen plus years at the earliest before we'll see
mass adoption.
Speaker 1 (29:24):
And certainly electric vehicles and self driven cars would have
all kinds of very very positive implications for the world,
but unfortunately consumers are on budgets, and consumers are slow
to make changes on things that are very expensive, for
for for in a lot of cases, for good reasons.
So it's going to be a little.
Speaker 2 (29:40):
Bit yeah, i'd say even on that point. Even you know,
when we think about the post COVID world, you know,
the combustible average combustible engine vehicle today has three hundred semiconductors.
The average EV vehicle today has three thousand, and that's
only going to increase. And so you know, even on
you know, production capacity, that's still remains a bit of
(30:00):
a challenge in getting the widespread or the broader adoption.
But it's happening. It's just happened, and probably slower than
most expected.
Speaker 3 (30:19):
Hi Sakima in New York. I've always worried that pursuing
an ambitious career would mean trade offs that will be
too difficult for my family. Mike, you talk about the
balance a lot on the podcast JB a few years ago,
you and Father of the Year award. How do you
balance the demands of your job on your responsibilities at home.
Speaker 2 (30:39):
Yeah, you know, it's day by day, but I mean
it starts with having a great partner. And whether that's
a husband, wife, or or you know, or significant other,
having a great partners is all part of it. And
certainly I've been very fortunate in that regard. But you know,
growing through the corporate ladder, you know, it's not easy.
(30:59):
As we talked about earlier, you do have to work hard,
and that includes weekends and things like that. But you're
also allowed to, you know, take the time for the
things that are critically important for you. And some of
those are the big moments in life, and some of
those are the little things that making your son or
your daughter's game here or there. And an ally, we
try to promote, you know, a family first atmosphere and
(31:23):
environment and that again, as Mike talked about that is
not mutually exclusive with you know, still generating really strong
returns and having a growth company, but it's treating people
as people, saying I respect you, I understand you're going
to have demands and needs at home as you are
in the office, and so you know, trying to know
that you can find balance. You may it may require
(31:44):
at it hours or late night hours or weekend hours
and things like that, but I don't think it has
to be mutually exclusive for me. I also think it's
very important you find time for yourself every day and
whether that's you know, for me, that's you know, getting
up every morning and getting a work out of it,
and that's less about the physical release or it's more
(32:07):
about the mental preparation for the day. And so I
always think balance also starts with creating time for yourself.
And we are in a point in society where I
think mental health is much more the norm today and
it's okay to talk about mental health and that's important.
And I think you know, finding your own space, your
own time to get your own release, I think enables
(32:30):
you to be a better performer at home and a
better performer in the office. And so it doesn't have
to be mutually exclusive, but I do think it is
a day by day balance. And both Mike and I
have kids and that's a big part of our life.
But at the same time we've both been able to
grow our careers quite effectively as well.
Speaker 1 (32:48):
I think that's right. And you're a better professional for it.
Having a significant other and who supports you, and having
a family who motivates you and who you love that
these things make you a better leader. And I was
remind everybody it's twenty four hours in a day. If
you sleep eight hours and if you work eight hours,
you've still got eight hours left. It's not like there's
this last thirty minutes and maybe you can spend it
(33:09):
with your family and maybe not like the average American
spends five hours a day on social media and television.
You've got room, you've got something to give, you can have.
Maybe you can't have it all, maybe you've got to
maybe you've got to give up Snapchat, but you can
definitely have a successful career and a successful and loving family.
(33:29):
That's not that's not the trade off that's out there.
It's all of the it's all the other distractions that
you might have to.
Speaker 2 (33:34):
Cut yeah, you got it right, Mike.
Speaker 1 (33:42):
Well, team, I hope you enjoyed that one as much
as I did. Jbi's a terrific guy. He's set in
amazing culture and brought together a terrific team, and they've
really transformed a company into a brand that people know
and love all across America. And it's that is that
is a real financial ally for millions and millions of people.
And two things really stuck out to me from the conversation.
(34:05):
You know, the first one JB said a bunch of
times culture and culture is it is a buzzword out there,
but really deciding what kind of people are we? What
are the values to dictate how we're going to make
decisions at the company. If you haven't read, for example,
read Hastings, No Rules Rules the Netflix story, it's a
(34:27):
lot about not necessarily the culture you'd want to create
in your team, but how a company so intentionally makes
decisions about its culture. I've seen JB follow a similar
path in his creation of the sort of who we
are at ally, and it's meant that the people who
apply for jobs there and the people who get hired,
(34:49):
and the people who get promoted, and the people who
lead that organization. Are folks who line up to that
consumer first, innovative, brave company, culture that he's created, culture
and people the end of the day is the whole game.
It's really apparent in the successful transformation of Ally. You
heard a lot about that on our pod today and
I thought i'd leave you with those thoughts. Remember, you
(35:11):
can submit your questions to me on Twitter, Instagram, breads,
LinkedIn at Mike steib or by calling us leaving us
a voicemail at two point three four one nine five
nine six. Your questions can help to drive our next episode.
I want to thank JB and JB's team for setting
(35:31):
today up. Of course, Jen, Meg, Jada, Matt, and the
whole crew of Blue Duck Media for putting this all together.
I want to thank Dylan and Christopher at iHeart and Bending,
the team at William Morrison Dever for all of their support.
Remind you all that Office Hours is production of Blue
Duck Media and distributed by iHeartRadio. I will see you
next week. Make sure you stay on your grind. Everybody,
(35:52):
thanks a lot
Welcome Office hours, where we sit down with the chief
executives shaping the world and answer your most pressing questions
about leadership, career, and life. Mike steib and today's conversation
is a special one for me. Eight years ago, I
joined the board of Ally Financial in the midst of
a major turnaround. The company had not long before spun
(00:26):
out of general motors and an effort to survive the
financial crisis, and had just appointed a new first time
CEO and Jeff Brown. Today, Ally is a Fortune five
hundred company, the largest all digital bank in America, Money's
number one rated digital bank, and one of Fortune's one
hundred Best places to work. Our CEO, Jeff Brown, has
(00:48):
been recognized as American Banker of the Year, the Thirdgood
Marshall College Funds CEO of the Year, and today, my friends,
you get to meet this inspiring leader. So, Jeff Brown,
welcome to the show.
Speaker 2 (01:03):
Well, thanks so much, Mike. Great to be with you
and appreciate how you've been on this journey with me
at ALLI. So for your listeners, Mike has just been
a fabulous board member for us and runs leads our
technology committee on the board. And when you think about
how much of Allies transformation, which I'm sure we're going
to talk about, has been centered around digital and technology.
(01:24):
Mike's been just a great leader, a great mentor, a
great friend, and certainly a great board member and help
them drive our evolution. So Mike, it's a pleasure to
be with you and honored be able to get this opportunity.
Speaker 1 (01:34):
Well, thanks man. Today we got a lot of folks
submitted questions who are interested in the future of banking,
the future of auto, the beloved ally brand, the company's transformation,
and there's a big question in a lot of people's minds.
As my favorite one, I'm actually going to save for
the end. So the first we'll go right to it,
Christina and Almaha says.
Speaker 2 (01:54):
All I was once a part of General Motors and
today it's a big spintet company.
Speaker 3 (01:59):
How did that trans information happened?
Speaker 2 (02:02):
We really centered on this idea that the world is
migrating more and more digital. Let's build a digital bank.
It was more cost efficient, we felt it aligned with
the consumer. We were enable allowed to pay higher rates
because we weren't incurring the costs of running a brick
and mortar network. And then suddenly we had this dramatic acceleration,
(02:22):
and Mike to your point, which really over the past
eight or nine years has further exploded. So I think
back to you know, two thousand and nine you were
talking about, you know, a deposit booklet was around five
billion dollars to today, you know, a deposit booklet's approaching
one hundred and forty billion dollars. How the fast growth,
and that's really transformed our funding posture and along the way,
(02:46):
we've you know, improved our capital levels, we dealt with
our troubled assets. So it has been a great transformation,
you know again from a captive finance company into a
modern day fintech bank. And you know, we're very proud
of of the position we're in today.
Speaker 1 (03:04):
Toybe two things about the transformation I think are particularly challenging,
and you pulled off and I'd like you to share
a little bit about how. The first is the investments
that had to be made. It's really difficult as a
public company to give up on short term earnings to
invest in R and D technology, et cetera. And it
(03:24):
was some small fraction of the billion dollars you're spending
in roughly a billion dollars you're spending a year in
tech today that the company was spending when you came
on board. How do you make room for that investment
and how do you win the support of your board,
your shareholders, the team, et cetera to do what is
what is not cheap and not easy in transforming the business.
Speaker 2 (03:46):
Yeah. Great, great question, and obviously it's dynamic every single day.
But I mean you have to, you know, really subscribe
or set a long term vision and be committed to
sticking to that and recognizing, let you know, in the
short term you may have to make trade offs, or
there may be challenges, or this may be a bit
more painful than the investor community wants to see. But
(04:08):
if you can deliver, you know, the transformative results over
a three four, five year, six year, ten year cycle
and you can prove that out, people get on board.
And so to your point, Mike, I mean, the two
major areas where we've invested in the company outside of
people has been a technology and in particular, you know,
making large digital investments. Hey, if we set out and
(04:30):
our vision really was to be the largest and most
premier all digital bank and awards like you started with
Money magazine and Kiplingers and others have recognized us. You know,
it wasn't ever about the awards per se, but it
was we were going to build the best dam digital
bank that exists out there. We're going to be more dominant,
we're going to have better tech, We're going to and
with that, we believe scale's gonna come. And that's exactly
(04:53):
what's happened. So technology for us is really the singles
largest investment we make in the company. And then a
law on the way we recognize the importance of people
got to know who you are. They got to know
no longer GMAC, you're a totally different brand, a totally
new brand, and what do you stand for? What do
you believe in? And so marketing and branding has been
(05:14):
the second largest investment we've made in the company. So
we've been very strategic along the way of recognizing those
are two very important pillars if you want to get
to that end state of being the leading all digital
bank in the United States. So I'm very proud of
where we're at today, but I expect we'll have to
continue investing in both of those areas going forward. Fortunately,
(05:34):
we've had a board that's believed in that vision and
in that strategy and been very supportive and recognizing that
we've had to make some short term earnings trade offs.
But when you reflect on what's transpired and ally the
past eight nine years, it's pretty dramatic. The company we've
built today, and how do you.
Speaker 1 (05:51):
Get the talent to want to work here. We have
an amazing CTO in Satisha. There's no way he was
going to GMAC years ago, right, But what you built
something that attracts a really terrific leadership team and then
all the way down what's the pitch?
Speaker 2 (06:08):
Yeah, I mean the pitch is one largely about our culture.
I mean when it comes back and I think, you know,
back to my very first town hall as CEO of
this company, and this was before culture became the buzzword
in the world. The past five six years was really
talking about unifying our culture and empowering our culture, where
(06:28):
you know, it didn't matter if you had been here
for thirty years or you were, you know, a fresh
faced intern a week in the door. We were just
going to we were going to have a culture that
empowered people, empowered people to dream big, to think different,
to believe in change, believe in rapid change and if
you have a vision, we'll we'll put capital behind it
to you know, if we believe it's going to lead
(06:50):
to the right results. And so, you know, the culture
is the single biggest pitch when I talk about and
we just you know, welcomed in a brand new CFO
into the me. You know, we're super excited about that.
That so we've been you know, very strategic in adding
great new leaders to the team. Let all share this
philosophy of we're going to empower our people to drive
(07:12):
change and really create great results. And it's been really inspiring,
you know, incredibly proud of my leadership team. A number
of them are racking up awards left and right, and
that makes me very very proud of what we've been
able to accomplish. But they all believe that, you know,
we are unique. We are different from the rest of
the banking industry. But that's what makes it exciting. In
(07:34):
the case of Satish, you know, he was working at
a large technology oriented company and he wanted to come
to financial services. It's a very complex industry, but he
also wanted a platform where he could really evolve the company.
And you think again, whether you know it was a
robotic process, automation, cloud computing, now to AI satishe has
(07:55):
you know, he's having tremendous fun getting to lead all
these new ventures and verticals for ally. So it's been
great to see all these new leaders emerge.
Speaker 1 (08:03):
I think that's great. I mean, people, if you're ambitious,
you spend the majority of your waking hours for forty
years at work. It should be in a place where
you love the culture and you love the people, and
good people want to build things. And what the team
at all has been doing is building something something really special.
(08:32):
All right, we go next to Wallace in Utah.
Speaker 4 (08:35):
America had a financial crisis in two thousand and.
Speaker 2 (08:37):
Eight and then a multiple bank.
Speaker 4 (08:39):
Failures in twenty twenty three. For someone who doesn't work
in finance, can you explain what happened and whether we
should worry about a repeat as the last financial crisis.
Speaker 2 (08:49):
We have the fastest fed tightening cycle pretty much in
the history of our economy, and people were caught off
guard by how fast interest rates moved, so that exposed
some of the weaknesses and risk management of some of
the banks that went down. But also what's different this
time was, you know, relative to kind of two thousand
(09:11):
and eight and two thousand and nine is the emergence
of social media. And you know, the reality was, in
the case of one of the banks that really started this,
a tweet that was put out that suggested your money's
not safe at XYZ bank, and in literally a period
of twenty four hours, there was a forty billion dollar
(09:31):
outflow of retail deposits and commercial deposits from that institution.
You know, you basically had a modern day bank run
that started from social media. And again, not to blame
the tweet or whatever it was, I think this all
comes down to inappropriate risk management. But you know, it
has been fairly startling to see the pace of change
(09:55):
and the pace of stress. You know, So I think
a lot of this comes down to managing your deposit levels,
you know, understanding your customer base, managing your capital levels,
things like that are very important. And that's a lot
of the elements of risk management one oh one that
live inside of a bank, and certainly that Mike is
(10:16):
involved in a daily basis. Now, whether we're exposed to
more of this, I'd say, you know, again, we still
see the environment being very dynamic, but I think the
weakest players were exposed, and those have obviously been dealt with.
I think the rest of the banking system, and in
particular the regional bank institutions what ally falls under. We're
(10:37):
still very healthy, plenty of liquidity, plenty of capital, and
so I think we're all guarded right now, recognizing, you know,
there could be more stress, but I think the magnitude
what we saw in March I do not expect to
get repeated, you know, the rest of this year or
into the future. And I think obviously now we're all
preparing for enhanced regulation that may come upon the entire
(10:59):
banking industry. Let you know, as a result of the
banks that went down.
Speaker 1 (11:05):
I really feel for any company that does not have
the digital DNA like you've built at ally, because that
means you don't understand the consumer in this market. And
the banking crisis earlier this year showed that what's going
to drive consumer behavior in the future are the things
that are happening in digital. So for our audience, when
you think risk, like plan your life around risks that
(11:26):
you can't anticipate, and if you're not a digital expert,
no matter what industry, you have to be because the
consumer is absolutely. Selina in Paris says, it's.
Speaker 2 (11:37):
Been said that every business is now a tech business.
Speaker 4 (11:40):
How do you find this to be true on finance?
Speaker 3 (11:42):
What technologies will shape the future of thinking?
Speaker 1 (11:46):
JBI. I get to spend a lot of time with
the crypto heads who you know, tell me all about
how in the future finance is going to be all digital.
And I always ask, do you think we keep the
one hundred billion dollars like in a safe? It's you know,
finance is already digital. Maybe you could just for our listeners,
maybe who aren't in the banking industry or maybe not
in technology, help them understand how it all works and
then maybe touch on some of the essential technologies that
(12:08):
you see impacting the business going forward.
Speaker 2 (12:10):
Yeah, I mean, to your point, we are we are
certainly we don't. We don't have big vaults, big safes
anymore filled with CAFs or stuff with cash. You know,
ally doesn't even have its own proprietary ATM network. We
rely on others that are that are out there. But
you know, money movement today across the world has gone
all digital and seamless. And that's for you know, retail
(12:32):
consumers like you and I, but also for big businesses today.
So I think, you know, the evolution we've seen really
the past fifteen years has been dramatic where digital has
become you know, broadly accepted and broadly the way people
conduct their business and perform their finances today. And I think,
you know, there used to be there's a CEO that
(12:53):
I greatly admired, and he always had this challenge that,
you know, can you really digitize trust? And I believe
you I believe the banking industry, you know, has shown that,
you know, if you do things the right way, you
have the right technologies, you lock the house with great
cyber defenses and things like that, people will really trust you.
And so for us, you know, money movement, all the
(13:16):
things how we pay our bills today, it is already digital.
And and yes, so I certainly subscribe to banking and
technology or effectively one and the same when I think about,
you know, technologies that are going to shape the future.
And I just referenced a few of them in my
previous comments. You know, started with a few years ago,
we started spending time on you know, researching robotic process automation,
(13:40):
so very manual performing task and repetitive tasks how could
we automate those And in some respects that was you know,
a step one of this journey of artificial intelligence. We
were also very early adopters in an area of quantum computing,
and I'm very proud of the partnerships that we have
with Microsoft and others that are out there in the
(14:00):
quantum space. I got fascinated on quantum by going out
to a technology conference six seven years ago. And you
know today our setish, our chief technology and information officer,
has really latched on the quantum as being you know,
more horsepower to do, to process in a very rapid fashion,
complex algorithms, and you know, can that make us analyze
(14:23):
risk in a faster format? Can that make us decision
to the end consumer in a quicker fashion? And so
there's a lot of power in quantum. We're spending a
lot of time today migrating away from large data centers.
You know, when I think I got to ally, we
had four or five data centers we own, we relied
on others, and today, you know, we're utilizing much more
of a broad cloud framework because it's faster and more
(14:45):
horsepower to analyze. But the single biggest area that we're
spending a lot of time on today is is on
ai and how AI is going to revolutionize the world.
We don't think, I think necessarily that it means, you know,
I'm not out saying it's going to reduce you know,
five percent of our workforce or ten percent of our
(15:07):
technology workforce. We're not making those claims yet. But I
think we're recognizing let ai. While it presents some risks,
it also presents a tremendous amount of opportunity for the
for the company and for all industries as well. And
so I think this is one where where I would
admit Mike to you. But I've been surprised how fast.
You know, AI seemed like a concept that was out
(15:29):
there a year or two years ago, and now with chat,
GPT and barton others, it's been pretty dramatic how fast
this has come to market, and really others are starting
to use it. So it's an exciting space. We got
to be very guarded, you know, we're very cyber focused
here as an all digital bank, so you've got to
make sure your protections, you're back to your risk management
(15:50):
are in line. But we're certainly excited about the use
and the prospects of AI, and in fact, in just
a few days we will launch of our own internal
AI development and Mike will have a chance to share
that with you in just a few weeks at our
nextport media as well.
Speaker 1 (16:07):
Dah wait Amanda in Miami says, I love the Ally brand.
Speaker 4 (16:11):
It seems more genuine and real than typical bank marketing,
and all the stuff the company is doing around women's
sports is terrific.
Speaker 2 (16:19):
How do you build a national brand like that? Well,
I love it. Thanks, thanks for the support the question,
And you know, I think it starts with hiring a
rock star. You know, we have Andrea Bremer who's our
change marketing and public relations officer, and she just you know,
it's a month doesn't go by, it's usually a week
(16:39):
or two doesn't go by where she's not being recognized
with the new award. And she is just a phenomenal
leader in a powerhouse in building a great global brand,
and every award that comes her way she deserves. But
you know, several years ago we really started to look
at how do we get greater brand awareness, how do
we get greater greater connectivity, How do we tell the
(17:02):
Ally story in a different manner? And we latched onto
sports being a big mechanism of that. Let you know,
sports in a lot of respects that you know, you know,
it is a big unifier and it brings a lot
of people together. And even though there's you know, a
left or right side or two opposing teams, but people
come together and celebrate the spirit. And we thought that
was a very unique arena for us to kind of
(17:23):
get the Ally name out there. And so we planted
this flag in the world of NASCAR, the champions PGA Tour,
you know, now in MLS soccer, you know, sponsoring a
NASCAR team. But you know, the past couple of years,
we started really taking a look at you know, equality
is something that's very important at Ally, something we stand for,
(17:46):
and we started looking at you know, women's sports as hey,
this is a huge area of opportunity, and why don't
women athletes command the same respect or the same pay
or the same media rights and all those things. We said,
you know, let's put our dollars to work. And so
we really planted the flag and I applaud Andrea for
her creativity, her passion. And Andrea was a four year
(18:10):
starter of Michigan State Soccer so this is a great
alignment in Mike, what we talked about about. You know,
you're going to work somewhere for forty years, it's okay
to align your personal and professional passions. And she brought
that spirit and helped us really grow women's sports. You know,
we be recognized by a lot of senior media publications
(18:30):
and great other brands for what we're doing in the
world of women's sports. We're on every National Women's Soccer
League jersey as well, and more to come. We got
a great NCUBA kickoff event here in Charlotte, North Carolina
as to start the season with two amazing basketball teams
from last year, and so we're doing a lot more
(18:51):
in the area of women's sports. Expect even more to come.
There's a few surprises that are out there. But we
just look at this as a huge opportunity for us
to grow the brand and therefore grow ally overall. And
I'm so fortunate. You know, our great leaders like Diane
Murray who runs our consumer business, Doug Timmerman who runs
our auto business, they've really latched on and they believe
in everything that Andrew is building and that's helping grow
(19:15):
their businesses as well. So it's really exciting what we've
been able to put together. But it all starts with
having one rock star leader.
Speaker 1 (19:22):
There you go, and I would give you credit to
JB a lot. You came from a background, a cfo's background,
a finance background, And there's comfort in the kind of
marketing that goes in a spreadsheet. You say, I gave
Google a million dollars and we got this many clicks
and a click is worth thirty cents, and and brand
marketing doesn't work like that. Brand marketing is more magic
than it is math. And you really have to have
(19:43):
faith in the team that they can go out there
and create a brand for you. And they can't prove
to you tomorrow that the investment worked, but certainly everybody
knows ally, and it creates an emotion in people. And
that didn't come only from the quality of our products
and our services. It also came from the way we
tell our story through media.
Speaker 2 (20:00):
Exactly right. Thank you. I appreciate that. And I know
Andrew is going to love those comments too, like.
Speaker 1 (20:05):
She's asking more budget you watch yeah, Max, and Seattles.
Speaker 5 (20:09):
Is making statements on social issues like Disney, bud Light
and others have had to walk it back this year
in the face of negative consumer reactions. As a CEO,
how do you think about your company's responsibilities and how
you take stand on important issues while navigating this tricky landscape.
Speaker 2 (20:31):
Yeah, well, thanks for the question. It's an important one,
and I think your word of tricky is absolutely the
right description. I mean, you know, unfortunately, we're about as
divided as a nation as we've ever felt. I mean,
it's kind of fifty to fifty split down the middle
of what people believe in. I think, you know, at ally,
I think plumb is inappropriate or purple is an appropriate
(20:53):
color for us, because you know, it is sort of
a blend of the red and the blues. And you know,
we try to create a company that you know, really
stands for We believe in equality for all. And you know,
when I take this back to I'm not going to
comment publicly on every social issue that's out there. I
certainly will comment on the ones that I do believe,
(21:17):
you know, have an interest in our industry and an
interest in our company, and certainly anything that would make
any of our employees feel unsafe or unprotected, we will
comment on. But really, we're a company that tries to
stand for equal opportunity, equality for all. You know, we've
had a big focus on diversity, equity and inclusion again
(21:40):
since the very first stage I was on stage as
our new CEO. You know, it hasn't been a rush
since we saw some of the tragic events in twenty twenty.
You know, we have always stood for doing the right thing,
being an emotional company, but really one that's centered on
equality for all. And so you know, I try to
(22:00):
get our leadership team, and I really believe our leadership
team embraces those values and those morals as well. And
so again I think they recognize there's certain things, there's
certain issues that we're just not going to comment on.
They're not necessarily pertinent to allies business and our industry.
But when it comes time to protecting the safety of
(22:21):
our employees, we actually, you know, we absolutely will comment
on those areas and we've done that in the past.
But it all comes back to a quality for all.
Speaker 1 (22:30):
It also comes back to an external messaging that lines
up to the companies the company's values. And I watched
with some interest what went down at Disney, and you know,
I think it costs Chapeck's job but he was pressured
by employees into coming out on state legislation in Florida,
and then as soon as he got pushed back, he
blinked and he backed off. And you compare that to
(22:51):
say Nike. When Nike stood with Colin Kaepernick, they got
a lot of pushback and they didn't care. They believed
in what they were saying and aligned to the company's values.
It aligned to how the people who led the company felt,
and it was easy for them to stick to it.
And by sticking to their guns, it made it effective marketing.
It reinforced the values in their company. You can't fake
(23:11):
this stuff. People know when you're authentic and they know
when you're not. And what I appreciate about ally is
when Aly says something publicly to say very authentically and
it ligns up to who we are.
Speaker 2 (23:20):
Yeah, thank you. We try to be very aligned with
our value system and it's been great. But again, it
is a tricky landscape. Let's out there right it is.
Speaker 1 (23:29):
I'll note for our listeners, I'll drop it in the
show notes. I've read a great book called the Language
of Trust by Michael Mislanski, and he talks about how
companies are just not trusted anymore. People have been trained
to take that you think that you're lying to them.
And the art of being authentic, like really saying what
your company values and who you are and doing it
consistently something we're seeing so many companies get wrong and
(23:50):
you get it right.
Speaker 3 (23:51):
JB.
Speaker 1 (23:51):
But for those of us who are listening, who are marketers,
who are in the communications space, are just thinking about leadership,
I'm going to recommend this. I'll drop the book in
the notes. Commended TA in New York, just T.
Speaker 4 (24:03):
I'm Mike. Revenue from charging fees is important to many
bank's finances, but Ally came out of nowhere two years
ago and ended all over draft seeds. What was the
strategic thinking there? Has the decision worked out?
Speaker 2 (24:16):
Yeah, T, thanks for the question. It's something that we're
certainly extremely proud of. And again, I think it's an
example of us living what we talk about as three
little words, do it right. At Ally, that's a big
part of our culture, our value system, do the right thing,
do it right. And so you know, one of the
things that transpired with COVID is obviously you know February
March of twenty twenty, there's a tremendous amount of uncertainty,
(24:40):
you know, when you were going back to work, if
you were going back to work, if you were going
to survive. I mean, there was great uncertainty. And we
made a determination that we were going to pause, you know,
all fees, and we were going to allow deferrals, payment
deferrals of your auto loan, your mortgage loan, things like
that for up to one hundred and twenty days. And
that really allowed people to have the comfort that, you know,
(25:02):
if I'm not getting paid, or I just lost my job,
or I'm not getting tips or wages or things that
I was accustomed to, I don't have to deal at
least for four months with some of that stress. And
that was again a very proud moment for us of
doing the right thing, and we learned a lot. We
learned a lot that even though we offered that, a
lot of people continued paying their bills, paying on time,
(25:26):
doing the right thing, or didn't pay for a month
but then caught up the next month. But the fact
that they had those you know a bit of an
insurance policy really helped them. But we also started looking
at our fee structure, and ally is a very already
a light fee institution. That's not what we've made our
mark on, and we think this again seys us a
(25:47):
part in the world of banking. But we did look
at our overdraft fee strategy after COVID and started saying,
you know, really overdraft fees disproportionately impact the people that
are affected the most. And Diane Murray dan Ray, who
runs our banking business, you know, came and talked to
me and said, JB, I think this is an opportunity
for us again to live our values, to do the
(26:10):
right thing, and we recognize that yes, maybe maybe it's
a short term earnings give up, but the power of
living your brand, living that name of being an ally
was really worth far more. And so that's been a
tremendous decision for us. It's been a strong pride point.
I've been very happy let other financial institutions. Some have
(26:32):
dropped THEIRS as well, others have altered their levels. We
didn't do this because of political pressures. We did this
because we looked at our customer base. We said this
was the right thing to do. And I'm really proud
of Die and our leadership team for bringing this forward
and really I think it helped set us out and
was another uptick in our growth potential as a company.
Speaker 1 (26:52):
Sanjay in Mountain View, California says.
Speaker 5 (26:54):
Alla is a big player in auto with self driving
cars or electric cars, et cetera.
Speaker 4 (26:59):
How do you see the future consumer auto over the
next ten to twenty years and what will it mean
for the auto industry.
Speaker 1 (27:05):
I was glad to get this question, Jay, because you know,
it's my job on the board every quarter to say
the cars are going to drive themselves. So tell everybody,
like no one is closer to the research than you
and the team here, tell everybody what's really going on
in auto and what you see over the coming years.
Speaker 2 (27:18):
Yeah, Sanjay, thanks for the question. And Mike has been
great at poking and prodding on the board about you know,
the transformation of the auto industry in a really healthy way,
and that keeps us on our toes and keeps us
sharp and keeps us connected with the manufacturers and with it.
Speaker 1 (27:34):
Keeps not coming true.
Speaker 2 (27:35):
So thank you, thank you for the tolements. Well, it's
all good. But what I would say is, you know,
I guess with that tone, it's it's it's still evolution,
not revolution, and I think that's going to hold true
even for the next you know, fifteen twenty years or so.
I mean, first, you know, the current wave that's been
out there for about ten years is around you know,
(27:59):
electric vehicle, and you know, I think that's largely been
slower development than some expected. I mean, started with Tesla,
You're now seeing all the various mainstream manufacturers introduce an
electric models, some committing towards you know, most of their
fleets being electric. By twenty thirty, I think you'll start
to see a lot of the manufacturers back off of that.
(28:21):
And I think part of this is twofold one infrastructure,
you know, the US doesn't quite have the infrastructure to
support a mass migration to EV strategy. And then number two,
I think consumer demand, while it's growing, it's still very
light on a relative basis. And so I start with
EV and say, you know, we're watching kind of the
(28:43):
gradual migration gradual trends there. As it pertains to self
driving cars. I think, you know, there's a number of
companies that have been formed spin offs from some of
the big manufacturers like General Motors and others, to try
to focus on you know, autonomous driving, self driving cars.
And I think you know, the challenges are pretty severe.
(29:05):
I mean, you're starting to see development of you know,
things like hit the button your car can kind of
stay on the highway, or hit the button your car
can park itself. But I think the challenges of day
to day autonomous driving are still you know, again, I
think fifteen plus years at the earliest before we'll see
mass adoption.
Speaker 1 (29:24):
And certainly electric vehicles and self driven cars would have
all kinds of very very positive implications for the world,
but unfortunately consumers are on budgets, and consumers are slow
to make changes on things that are very expensive, for
for for in a lot of cases, for good reasons.
So it's going to be a little.
Speaker 2 (29:40):
Bit yeah, i'd say even on that point. Even you know,
when we think about the post COVID world, you know,
the combustible average combustible engine vehicle today has three hundred semiconductors.
The average EV vehicle today has three thousand, and that's
only going to increase. And so you know, even on
you know, production capacity, that's still remains a bit of
(30:00):
a challenge in getting the widespread or the broader adoption.
But it's happening. It's just happened, and probably slower than
most expected.
Speaker 3 (30:19):
Hi Sakima in New York. I've always worried that pursuing
an ambitious career would mean trade offs that will be
too difficult for my family. Mike, you talk about the
balance a lot on the podcast JB a few years ago,
you and Father of the Year award. How do you
balance the demands of your job on your responsibilities at home.
Speaker 2 (30:39):
Yeah, you know, it's day by day, but I mean
it starts with having a great partner. And whether that's
a husband, wife, or or you know, or significant other,
having a great partners is all part of it. And
certainly I've been very fortunate in that regard. But you know,
growing through the corporate ladder, you know, it's not easy.
(30:59):
As we talked about earlier, you do have to work hard,
and that includes weekends and things like that. But you're
also allowed to, you know, take the time for the
things that are critically important for you. And some of
those are the big moments in life, and some of
those are the little things that making your son or
your daughter's game here or there. And an ally, we
try to promote, you know, a family first atmosphere and
(31:23):
environment and that again, as Mike talked about that is
not mutually exclusive with you know, still generating really strong
returns and having a growth company, but it's treating people
as people, saying I respect you, I understand you're going
to have demands and needs at home as you are
in the office, and so you know, trying to know
that you can find balance. You may it may require
(31:44):
at it hours or late night hours or weekend hours
and things like that, but I don't think it has
to be mutually exclusive for me. I also think it's
very important you find time for yourself every day and
whether that's you know, for me, that's you know, getting
up every morning and getting a work out of it,
and that's less about the physical release or it's more
(32:07):
about the mental preparation for the day. And so I
always think balance also starts with creating time for yourself.
And we are in a point in society where I
think mental health is much more the norm today and
it's okay to talk about mental health and that's important.
And I think you know, finding your own space, your
own time to get your own release, I think enables
(32:30):
you to be a better performer at home and a
better performer in the office. And so it doesn't have
to be mutually exclusive, but I do think it is
a day by day balance. And both Mike and I
have kids and that's a big part of our life.
But at the same time we've both been able to
grow our careers quite effectively as well.
Speaker 1 (32:48):
I think that's right. And you're a better professional for it.
Having a significant other and who supports you, and having
a family who motivates you and who you love that
these things make you a better leader. And I was
remind everybody it's twenty four hours in a day. If
you sleep eight hours and if you work eight hours,
you've still got eight hours left. It's not like there's
this last thirty minutes and maybe you can spend it
(33:09):
with your family and maybe not like the average American
spends five hours a day on social media and television.
You've got room, you've got something to give, you can have.
Maybe you can't have it all, maybe you've got to
maybe you've got to give up Snapchat, but you can
definitely have a successful career and a successful and loving family.
(33:29):
That's not that's not the trade off that's out there.
It's all of the it's all the other distractions that
you might have to.
Speaker 2 (33:34):
Cut yeah, you got it right, Mike.
Speaker 1 (33:42):
Well, team, I hope you enjoyed that one as much
as I did. Jbi's a terrific guy. He's set in
amazing culture and brought together a terrific team, and they've
really transformed a company into a brand that people know
and love all across America. And it's that is that
is a real financial ally for millions and millions of people.
And two things really stuck out to me from the conversation.
(34:05):
You know, the first one JB said a bunch of
times culture and culture is it is a buzzword out there,
but really deciding what kind of people are we? What
are the values to dictate how we're going to make
decisions at the company. If you haven't read, for example,
read Hastings, No Rules Rules the Netflix story, it's a
(34:27):
lot about not necessarily the culture you'd want to create
in your team, but how a company so intentionally makes
decisions about its culture. I've seen JB follow a similar
path in his creation of the sort of who we
are at ally, and it's meant that the people who
apply for jobs there and the people who get hired,
(34:49):
and the people who get promoted, and the people who
lead that organization. Are folks who line up to that
consumer first, innovative, brave company, culture that he's created, culture
and people the end of the day is the whole game.
It's really apparent in the successful transformation of Ally. You
heard a lot about that on our pod today and
I thought i'd leave you with those thoughts. Remember, you
(35:11):
can submit your questions to me on Twitter, Instagram, breads,
LinkedIn at Mike steib or by calling us leaving us
a voicemail at two point three four one nine five
nine six. Your questions can help to drive our next episode.
I want to thank JB and JB's team for setting
(35:31):
today up. Of course, Jen, Meg, Jada, Matt, and the
whole crew of Blue Duck Media for putting this all together.
I want to thank Dylan and Christopher at iHeart and Bending,
the team at William Morrison Dever for all of their support.
Remind you all that Office Hours is production of Blue
Duck Media and distributed by iHeartRadio. I will see you
next week. Make sure you stay on your grind. Everybody,
(35:52):
thanks a lot
Host
Mike Steib
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