Introduction
This week I’m joined by Mark Tonnesen who is the Chief Information Officer at Freedom Financial Network.
In this episode, Mark shares his perspective on what business leaders are looking for and why he approaches problems differently. He talks about his experience leading different organizations and it has helped provide greater business value. Mark explains how emerging technology is a game changer for both customer and employee experiences even in highly regulated and compliant industries like financial services.
Speaker Profiles
Mark Tonnesen Twitter: https://twitter.com/mtonnese
Mark Tonnesen LinkedIn: https://www.linkedin.com/in/marktonnesen/
Freedom Financial Network: https://www.freedomfinancialnetwork.com
Audio File
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Podcast Transcript
Tim Crawford 0:04
Tim, hello, and welcome to the CIO in the Know podcast, where I take a provocative but pragmatic look at the intersection between business and technology. I’m your host, Tim Crawford, a CIO and strategic advisor at Avoa. This week I’m joined by Mark Tennyson, who is the Chief Information Officer at Freedom Financial Network. In this episode, Mark shares his perspective on what business leaders are looking for and why he approaches problems differently. He talks about his experience leading different organizations and how it’s helped provide greater business value. Mark explains how emerging technology is a game changer for both customer and employee experiences, even in highly regulated and compliant industries like financial services. Mark, welcome to the program today.
Mark Tonnesen 0:55
Thanks, Tim. It’s great to be here.
Tim Crawford 0:57
So, I want to set the stage for our conversation, because you’ve been the CIO for a number of companies. You’re currently the CIO for Freedom Financial Network, and even that role has a little bit extra attached to it. You’re not just the CIO. So, maybe you could take a minute and just help us understand, help the audience understand who Mark is and the role that you’re playing there at Freedom Financial Network and beyond,
Mark Tonnesen 1:23
yeah, yeah, so without belaboring the run through of resumes and such, you know, I think I think it is important of CIOs to have a balanced view of the business, and no better way, because we all talk about, you know, understanding the business and connecting with the business, and you know, leading, and all of that, but I think part of the part of what makes a CIO successful is having spent time in other roles, so I’ve, I’ve had operations roles, you know, real business operation roles, I’ve had run central PMOs for companies, I’ve run product and product management before sales operations, and now I run all the product infrastructure and operations. I’ve also been a chief security officer, so I think having a balance of not just the CIO or the IT pedigree, I think bringing in both business experience roles that you’ve played outside of it and also other facets of technology, whether they be product management, as it relates to building products, or if it’s security. I mean, I think all of those parts of your background and experience, and for me personally, I have found it to be a wealth of knowledge to pull from in making really good decisions and enhancing my ability to connect with the business and, and hopefully driving value
Tim Crawford 2:47
that is wonderful, and I think that’s something that’s somewhat unique amongst our peer group, which is having such a breadth of experience and being able to bring that to the conversation, but also bring that to the company that you’re serving. What is your take on how the CIO role is changing, and maybe kind of put in there how those back, the background that you have, and the experience that you have, how you see that playing a role into that changing CIO role.
Mark Tonnesen 3:19
Well, I mean, I think I think at the, at the highest level, the simple way to think about it is that you have shared, shared goals, shared metrics, you know, shared incentives with the business as you drive business outcomes, right? It’s so, it’s, and we’ve talked a lot in numerous sessions around, you know, it’s the CIO role is about delivering on the value proposition for all of the investments that are made, but I think many of us, or most of us, don’t take an active, you know, I own this particular, you know, function or process, and I own improving this process or improving the business result that’s driven out of that, you know, product or project that you’ve taken on. I think that is something that I think is important for CIOs to end there, and also even the directors and VPs below them should take on. I think, as well, many business leaders are looking for new ideas. They’re looking for new ways, not just the simple things that it has done in the past, you know, automate, you know, simplify, integrate processes and and capabilities, but really to bring new ideas. And I think there’s, we’ve talked a lot about, you know, kind of the newer technologies that are on the forefront in front of us, but most of us are, we’re focused on our day job, we’ve got a lot of, you know, alligators biting at our ankles day to day, but we don’t spend the time to really learn and and connect with what’s really going on. And where are the new investments in the VC market, and you know what’s really coming of age in terms of technical advantages or new ways to think about how to solve business problems, and I think that’s one of the things that I try to do. I don’t think I’m perfect anywhere along that spectrum, but I am trying to spend as much time as I can to advantage my business by doing not just what everybody else does, but doing something beyond doing something differently, approaching problems differently, bringing new technological ideas and solutions to the to the company, or to a particular area to really advantage our business differently,
Tim Crawford 5:40
and you know, you’ve talked about how you believe the CIO can be changing the game of technology within an organization. Can you maybe elaborate on that a little bit? I mean, you and I have had a number of conversations over the years and have known each other for a period of time, but I’d love for you to kind of dig into that a little further, and what you mean by the CIO being that game changer.
Mark Tonnesen 6:04
Yeah, yeah, sure. So I spend a fair bit of time, as most CIOs do, really trying to understand and engage on, you know, what what are the areas of opportunity that really need to be thought through differently, and just as an example, you know, we have a pretty large contact center business as part of what we do, and you know, it’s a traditional, you know, there’s a call center, you have a call center, you know, application, there’s all sorts of self-service, you know, mobile applications, etc. And then there’s a lot of people on the phones, and so one of the things that we really were trying to look at was okay, how do we just drive efficiency in the contact center, and you know, so that was of course more technology and automation. So, what I decided to do was to actually sponsor a program, so leading the program with the business alongside me to really look at how we were going to actually deliver services differently, how we would package those services, how we could move to a complete scripted contact center, where the contact center was, let’s say, exception base only, right? So think about your, oh, think about, like, the Apple model, right? When you, you buy an Apple product, you get a warranty for, you know, 90 days or maybe a year, and afterwards, when you call in for support, if they’re, you know, if they’re not nice, you have to pay, you know, per the per hour, right? But there’s a whole bunch of wealth of self-service capability in that, but I wanted to take self-service well beyond just, you know, what you typically find online. I wanted to actually package up and call it a channel or a stream of communication between your business and your client, right. So, I, as a client of freedom, you know, I have a unique relationship, or at least I think I do, and therefore I should get a unique, uniquely styled and shaped communication that in a way that I like to receive it. So I may want to receive it via email, I may want to, I want to have mobile alerts and SMS, I may want to have phone calls, I may, may want to have, you know, in some cases, we have very old clients, and maybe I want to have paper delivered to me, you know, so there’s all sorts of different nodes, and then, of course, the content itself is customizable and can be delivered in a unique way, and so I want the specific summary versions of my relationship, so we do loans, for example, and we do credit consolidation, so I want to be able to see very quickly across all of my credit cards what is my status and how am I doing in terms of paying off those amounts, for example, maybe other people might want to see transaction detail, or what have you, so instead of painting the whole world the same color, it’s being able to deliver contextual content relative to the consumer in a way, in a channel that is suitable to them, and that’s just something that contact centers and call centers, they don’t think about today, or they don’t think enough of, and that’s one of the things that I’m embarking on the era of freedom,
Tim Crawford 9:22
and that’s that sounds like something that goes well beyond the realm of just personalization, where Tim Crawford wants one thing, Mark Tennyson wants something different, but rather you’re really bringing that true market of one and that personalization to the nth degree for each customer, where they feel like they’re unique, they feel like you are tailoring the interaction in the experience for them to just them.
Mark Tonnesen 9:53
Yeah, and then you know, I don’t want to get too deep into the technology itself, but there are machineless. Learning and AI technical solutions out there now that can be incorporated to make these connections with your clients much more well, let’s say more real time, more again, more contextual event based, much more sophisticated than you know. If then else you know, do something right, and, and so, and especially in a finance world, and I would imagine if you’re in automotive, or you’re in oil and gas, or something, based on certain events, could be market fluctuations, could be it could be product issues, or deployments, or it could be field issues, or what have you. In our case, it’s financial transaction occurrences or negative events that occur that might trigger something, so we’re getting much more attuned to all of those changes that are going on that I think you could build a solution eventually, but now that the technologies have really advanced it actually make this a real capability.
Tim Crawford 11:05
Yeah, it also sounds like not only is there the opportunity to buy instead of building everything, but you’re also starting from a business context. How do you change the experience for the customer? Not, hey, we’ve got this great technology. Where do we apply
Mark Tonnesen 11:23
it, right? And now, with things like, look at RPA, for example. So, you know, RPA has been around in some form or fashion for quite a long time, but as you think about financial service businesses, which, which we’re in, you know, heavily regulated, and you know, we’re audited by somebody every week, and then we’ve got all these legal firms that are coming in, and they want all these audit trails of things, right? And so with all of this automation and streamlining, and you can think of these AI engines as almost black boxes, but they don’t make auditors feel comfortable. So now we’re introducing much more transparency, I guess, is the best word with regard to how decisions are made. How the technology came to this conclusion. Hey, this event occurred, this social event as well. The two of them give us a higher probability that this person is going to maybe fault on a loan, or or be late with a payment, or you know, whatever. Then we, you know, we actioned a, b, and c, right. And so those are the things that we get asked a lot about. And hey, why did you make this decision? What was the data that showed you should make this decision versus that decision? Those are the kind of things that now are available to us that you know heretofore really work,
Tim Crawford 12:44
yeah. Well, you know, I wanted maybe take us in a slightly different direction and elaborate on not just the customer, but also the organization itself too. And as the CIO changes and changes how they think, you know there are changes to the organization that’s needed to both the engagement of the IT organization and also the employees, and I know this is a space that you’ve put a lot of thought around and done a lot of work in, but I wanted you to share your perspective on how organizations are changing too, and maybe some of the technologies that are coming into play there.
Mark Tonnesen 13:23
Yeah, sure. As many of us have done, and have you know, lived through right the life of portals and ultimate personalization of content on a website, you know, that’s been done for 1520 years, and I think the real problem, though, is it really didn’t change that much in terms of behavior, it didn’t improve employee satisfaction, it really didn’t drive up employee engagement, which most companies, if not all, are really after, and ultimately retention, right, and so I think one of the things that CIO should be doing, one thing that I’ve been doing is really thinking hard about, okay, who is really coming into my company, right? They’re younger workforce, they’re more millennial in terms of their age group and background, and the way they want to engage with anyone is very different than maybe it was even five years ago, let alone before that, so one of the things that I’ve spent quite a bit of time on is really thinking through, okay, how do I work on my, in my personal life, and then how do I work in my, in my enterprise, and we’ve adopted a lot of the same principles, so, so one of the things that we’ve done is we’ve begun deploying a complete immersion experience around video and audio, so messaging and communication is becoming channel based, so we’ve got a video channel, we’ve got audio channels. Audio only channels, we’ve got a fair bit of problem and technology communication that we’re using chat bots, so a lot of what we’re trying to build now are these what I’ll just call channels of communication again to my employee base, so that finance or HR or, you know, the CIO, and the IT function can communicate to the employees who then subscribe, like we do in our personal life. You subscribe to channels online, and so that’s become much more of an inviting experience that our employees are telling us about, and you know, like one example is we’ve, we’ve built a channel for product releases, and so every time we’re in the midst of building out a new product release, we subscribe, we built out all the communication through the channel, it goes out to our partner network as well, we leverage Slack as part of the delivery vehicle internally and to our partners, and so it has become now the place to get information, and what has really happened is our employees are now asking us for new channels. Hey, can you can you build a channel that integrates into a Starbucks coffee center, so we can buy coffees and use the app like you would normally on your on your mobile device. Oh, wow. Can we, you know, if you work in an enterprise in a building like I work in a four story building, we have, I think it’s like 35 conference rooms, you know, they’re multiple sizes. Geez, I have people that we want to meet. We have five people. Well, what conference room is open that has five people in it, or five chairs? Sure, right. Well, okay, I can go to my Outlook and find a room, but I don’t know if it has five high, five seats. So you know now we have this channel communication that gives you a visual of the conference rooms, either on your floor or other floors that are five seats and above. You’re using natural language to ask the question, you’re getting back natural language and a response. It comes up with a video or a map to show you exactly your route to get there. From where you are, it brings in GPS technology to tell you exactly where you are, and from there, how to get to that room. For example, these are things that have become much more of an inviting experience for the employee, versus, you know, here’s an HTML page, and, you know, it’s a map of the building, and, you know, good luck. Yeah, you got to figure
Tim Crawford 17:41
out how to put the different pieces together. I mean, it sounds like what you’ve, what you’ve been able to do is, a, you’re going to the employees in a way that they are already accustomed to consuming information, but then the second thing you’re doing is you’re trying to create a more frictionless experience for them with just some of the creature comforts of everyday life of working within a corporate environment too,
Mark Tonnesen 18:09
that’s exactly right, that’s exactly right. Our employee base now is we’ve created a channel of communication for, you know, HR issues, and again, it was completely privatized and secure for them. Our culture is very focused on, you know, caring for people and creating a fun environment. So, we’ve, we’ve put some real focus around those experiences as well, and if it’s proven to be a very.. it’s like a.. I don’t know, it’s like a. it’s catching on like wildfire, and people are coming forward now with all these new ideas on things we could be doing and new capabilities in these channels. So I didn’t realize that it wasn’t really part of my plan when I started, but it’s just we’ve really uncovered a lot of momentum and energy around this. That’s
Tim Crawford 19:00
great, and I know this is really more of an anecdotal question that you may or may not have data to, but how has that changed your hiring capability? You know, being in the Bay Area, being in the San Francisco Bay Area, and we have folks that listen to this podcast from all around the world, it’s an incredibly competitive market for staff. I know that firsthand. You know that firsthand. How has changing these experiences for the employee, how has that changed your ability to attract and retain talent within the organization?
Mark Tonnesen 19:40
Yeah, so it’s still early days, but we are seeing a reduction in turnover, and I’d like to take all the credit, but you know there probably are other factors as well, but we have seen about a 10% reduction in voluntary turnover, which is really good, but. More important is the the increase over 50% of our new hires actually closer to 60 now is referrals internal.
Tim Crawford 20:10
Oh, wow, right.
Mark Tonnesen 20:11
And that says a lot, and the mess, yeah, and the messaging we’re getting in through the recruiting process is, you know, the fun environment, the the advancement in technology, right, the tools that that the employees have at their at their disposal, not just get their job done, but, but really to create an, you know, an environment that is suitable to, you know, spending eight to 10 hours a day in, and so that’s that’s been very, very positive in terms of the feedback, and so the messaging from the executives, of course, is, you know, do more, do more, and keep going. So we’re trying to enlist more of our employees, right, to be involved, come up with ideas, help us be the product manager, if you will, to a new design for a new, a new solution, right? So this is, you know, still early, but I think it’s, you know, all the signs are pointing in the right direction.
Tim Crawford 21:07
Yeah, it sounds like it. And you know, from experience, I would say having that internal advocate for your company is huge. I mean, that’s a huge boon from a competitive standpoint. So that’s great. So, as, as we, you know, you kind of mentioned earlier in the conversation a little bit about the technology that you’re using that you’re employing, and I think we would be somewhat remiss to have a conversation without at least touching on some of these emerging technologies, but you mentioned RPA, you mentioned AI as it pertains to contact center and financial services, especially in a regulated industry like you, are how do these emerging technologies play? I mean, is it is it something that’s maybe a little too soon to be able to bring in at a broader level, or do you think that it’s a real game changer for your company and industries like yours,
Mark Tonnesen 22:02
I think it’s a game changer. I think you will always have, in terms of legal, you know, compliance organizations, a little reticence to adopt all sorts of new technologies when, when they don’t understand it, right? So, when you have these five inputs go into a box, and and a decision comes out and it’s a black box and you don’t understand the rules behind it, then it becomes something that you don’t because you don’t understand, you don’t like, you don’t accept, and so we’ve, we’ve got a little bit of that as well, but but we’ve got so much positive momentum now with the solutions that we’ve delivered that we’re seeing a lot greater adoption and more acceptance now, as I mentioned earlier in the call, like with RPA, and also some of the natural language and voice and video technologies, we’re actually keeping records, so we still, in the case of for compliance reasons, any action that we do take, we record those actions, what came in, and the action we took, we record that in ServiceNow. So we, we keep in a system all a record of all those decisions and what happened, so we don’t lose it. Somebody comes in, they want to audit what we’re doing, and then we can, we can pull out all the details. So there isn’t a lot of there, the algorithms may be viewed as magic, but the decision making is all recorded, and and it’s become pretty widely accepted,
Tim Crawford 23:27
and it sounds like from an auditor standpoint they can at least go back and follow the what we used to call the paper trail, but follow the trail that led to the decision, even if you don’t understand the algorithm
Mark Tonnesen 23:40
exactly, and that still does happen. I mean, we’ll still get a, an audit firm or a regulatory body, that government body, that will come in, and they don’t understand how it’s been deployed and what it means. And so we, we take them through a very methodical review of what we’re doing and the result, and they sign off on it in almost every case. So we’re actually, we’re actually in pretty good shape, I think, at this point.
Tim Crawford 24:04
That’s great. So, as we kind of wrap on this episode, I always like to ask my guests – we’ve heard the saying that this is probably the best time to be a CIO, to be working in technology over the course of the decades that it’s been around, what excites you most about the role of the CIO, and where we are from a technology standpoint, and where technology fits in.
Mark Tonnesen 24:30
What excites me the most. Well, to me, I love change. So, change may create nervousness amongst many, but for me, I really love change. So, to see new technologies come to fore to have the wherewithal to, and I think CIOs, maybe CTOs as well. You have it on a small scale, you have the ability to try a few things, right, to just innovate, you know, obviously quickly and cheaply, right, fail fast, but sure. Those things to me are exciting, because what comes out of them are ideas that I didn’t realize a lot of this would would take hold, you know, the use of chat bots, this whole channel of communication, this complete natural language. I mean, all of this is just for me. If you’d called me two years ago, year and a half ago, I would be completely ignorant, and now we’re, we’re building these solutions very, very rapidly, and we’re deploying them, and we’re learning, and we’re innovating on these things constantly. So to me, changes is what is exciting. I can’t wait to see what, what’s coming next, what, what newer technologies are, are coming that I can, I can build into my set of solutions and take advantage of that, and, and change the game, and I think that’s what we’re all trying to do as CIOs, is change the game for our company, and make them the most, make them the most successful, but, but to me, it’s to do it differently than all the other competitors.
Tim Crawford 25:58
Yeah, and it sounds like you’ve had some pretty significant successes with the changes that you’ve made, which is always great to hear.
Mark Tonnesen 26:06
For a CIO, you know, you, you always want to be relevant, right? You always want to be thought of at the table, delivering as much value as anybody in the room, and and this gives me kind of a platform to showcase what what an IT function can really do,
Tim Crawford 26:24
the art of the possible. Absolutely, Mark. Indeed, that’s right, Mark Tennyson. Thank you so much for joining today. It’s always great to chat with you. Like I said, we’ve known each other for, for a period of time, and, and I always welcome the conversations that we have.
Mark Tonnesen 26:41
Well, thank you, Tim. This has been great. Enjoyed it.
Tim Crawford 26:46
For more information on the CIO in the No podcast series, visit us online at CIO itk.com or you can find us on iTunes, Google Play, and SoundCloud. Don’t forget to subscribe, and thank you for listening.
Unknown Speaker 26:59
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