How Technological Innovation in Finance is Disrupting Traditional Models

Megan - 00:00:18: Today, my guest is Stephen Hankins. Stephen serves as CFO and CIO of Morgan Foods, with responsibilities including all financial matters, as well as providing leadership in all aspects of Morgan's operational infrastructure and digital transformation. Steve, thank you very much for being my guest on today's episode of CFO Weekly.

Steve - 00:01:10: You're very welcome.

Megan - 00:01:12: Yeah, today our topic is business and digital transformation. And these are two of the hottest topics in business today and critical for surviving and thriving in today's business environment. Steve, I'm looking forward to learning about you and hearing about your experiences within these two areas. So let's get started.

Steve - 00:01:32: Okay.

Megan - 00:01:33: First, and as always, if you could just kind of give us a brief overview of your career and how it is that you got to where you are today.

Steve - 00:01:41: Well, so my career really began in a way formally starting when I entered the chicken business after getting out of graduate school. I worked for a short time, a couple of years for Hudson Foods in Rogers, Arkansas, and then made my way to Tyson in Springdale, Arkansas. Tyson, when I joined it in 1983, was a $680 million revenue company and had nine processing plants. And when I left Tyson in 2004, we were $28 billion in sales. So I spent close to 21 years at Tyson. And you can kind of chalk that up as being the bulk of my career. While I was there, I spent the 80s as an operational accountant. Through most of the 90s, I was in the CIO business. And I was CFO from 1998 to 2004. And so that was my career at Tyson. Following that, I basically took a few years off, played a lot of golf, kind of got lured into some consulting, started a little IT company, which was a lot of fun. I did some consulting out of that. And then in 2011, I got kind of called back into service by an investor group. And I called sort of a Tyson Orbit investor group. Who had made a deal with some people to basically buy some bentonite mining rights, Casper, Wyoming, and they were going to build a plant. And they said, hey, do you want to come do that? And I said, sure. And so I spent a couple of years in the bentonite business. And then I exited myself from that. And then got a call from an individual that I knew from back in my Tyson days from KPMG, who was becoming CEO of a 4PL, a global 4PL. There's a whole story behind that. Interesting that no time to go into. Lisa, would you come be the CFO of that? So I kind of got in the global CFO business for about three years. And then the CEO got really a few opportunities. They put in a CEO that I liked, but I wasn't crazy about from a business standpoint. And so I exited myself out of that, went back to playing golf for a few months, and got another call from Morgan Foods, the CEO of Morgan Foods, a gentleman named Louis Gottsponer, was actually my director of industrial relations at Tyson. And Louis' aspiration was always to run companies. And he became CEO of Morgan Foods and basically called me up and said, come help. And so I went to help Louis at Morgan Foods with basically my main mission. Being to shore up the infrastructure to support anticipated growth. They had been looking at an acquisition. They hadn't made anticipated a lot of growth in the company. And since I've been there, we've done one acquisition. And the company's doubled in size, and we've done a ton of infrastructure work. That's the overview of the career. Getting into the chicken business and being there for what amounted to about 23 years was a lot of fun and fit my background because I came from a small town in northeast Arkansas. My grandfather was a farmer and entrepreneur, and we had a number of family businesses. We had a farm, a grocery store, a crop dusting business. We rented every pecan orchard in a 30-mile radius. And I basically went to work in summers full-time when I was about 12 years old. And I spent a lot of time with my grandfather. I always joke, I got my MBA in the cab of his pickup truck with his Socratic lectures and teachings that he gave me. And really learned a ton about business and people and how to think about business in that. And of course, I went to college and got an accounting degree. I passed the CPA exam, got an MBA at the University of Arkansas, and had all that done by the age of 21. It was shortly after that that I started in Hudson Foods. So my working life really started when I was about 12 years old. And all those family businesses and working daylight to dark. Doing all manner of things.

Megan - 00:06:10: Yeah, definitely teaches you hard work.

Steve - 00:06:13: Yeah, I enjoy working. My wife tells me I'll never quit. And that's kind of my story and what my career history has been so far.

Megan - 00:06:21: I'm curious about the role of this as a CIO, like having your formal education in accounting. How is it that you ended up a CIO?

Steve - 00:06:31: Well, that's a bit of a fun. So in college, I went to a small college in Arkansas who happened to have a computer system that was very interactive. It came from digital equipment. And I took the computing class and just was very attracted to computing and programming. And in fact, even though I was an accounting major, I taught computer lab the rest of the time I was there. And when I got my MBA at Arkansas, my assistantship again put me in computer lab. And so along the way, I learned a variety of computer language aims. And it's just something I've had aptitude for. And then way back in the beginning of my career, I bought the first IBM PC at Hudson Foods. And I also bought the first one at Tyson. And even prior to that, I would use tools. There was a IBM 5110 at Hudson Foods. But I actually, one of my projects was projecting turkey farm financials because we were financing turkey farms. And I actually wrote the entire projection program on the IBM 5110 rather than do it on 26-column spreadsheets by hand. Four-inch screen, eight-inch floppy disk. So I've always viewed the computer as a tool. And when VisiCalc became Lotus 1-2-3. VisiCalc became Excel. Integrating that into accounting work was always a priority through the 80s. I basically got accused of thinking I was the king of shadow computing. And I got in trouble with what was then called the data processing department because I was stupid enough to think the world would run one day on a network of personal computers. And I was very much an antagonist in the whole situation. And from a computing standpoint in the 80s, even compared to the 80s, compared to my college days, things were very antiquated. And so I wanted to do things that just really wasn't possible with what we had. And so that's how I got the shadow computing world started. And then Heisen was growing very fast. So we went from 680 million. We did acquisitions up to about 2 billion. And in my role in operations accounting, I hold all of the plant offices. And so the plant offices did all the transactional work relating to supply chain, as well as cost accounting and payroll and accounts payable and the typical things. And when we started buying these companies, Tyson was wanting to be, I describe it as everybody in the pool. We brought everybody into our infrastructure. And so I began to play really the lead role in integrating acquisitions, not only from an accounting standpoint, but from a supply chain standpoint. And so I knew everybody, every plant and every plant office and every warehouse and how all the transactions took place and such. And so Tyson growing so fast, we were outgrowing our computing environment, which was Unisys. And it was declared that the. The whole problem with our computing world was Unisys. And so we decided we'd get a new computer vendor. And so we had a big playoff between Unisys, IBM and digital equipment. And the IT group chose digital. And we very quickly found out that the only software available on a digital platform, we had decided to use packages as much as possible. The only software that was available was what I referred to as IBM 360. And so we found ourselves implementing a McCormick & Dodge General Ledger system and a Cyborg Payroll System that literally were 1983 versions of 360 software that had been imported. And so everyone was extremely disappointed about that. And then all of the technological capabilities we were going to make use of were quickly getting abandoned by the IT department. And suddenly they wanted to go back to Unisys. And so we decided to go back to the computer world. And so we had to go back to the computer world. And so we had to go back to the computer world. And this happened in July 1990. And he called me down and said, I'm going to give you the computer thing. And he explained that that meant I'm going to be in charge of all software. Okay. Number one, you're the biggest gripper. So there was a little bit of, all right, big boy, let's see what you can do. And he said, number two, you actually know how this whole place works. Which was the important piece, I think, of what he said. And so I took over software, and then very shortly, I had the whole computer infrastructure. So data network, data center, and everything. And my job basically was to make this digital transition work. So all that reported to the CFO, but he didn't want to have egg on his face. My job was to make it work and also make sure it supported the company. And literally, that was the only direction I had. And so, starting with 12 people, and by February 1993, we rolled out a brand new supply chain system. And there's a huge story about how we did that, which plays into transformation. But anyway, we rolled out in February 1993, which was coincidentally the same timeframe that SAP brought SAP R/3 to the market. And so, we did that. And then we went on to, we satellite tracked all the trucks. We automated all the warehouses. We put barcodes on everything. We had EDI integrated into everything. We could communicate externally as well as we could communicate internally. And by 1995 or 96, we pretty much had a top-of-the-line infrastructure that we had put together. And within all of that, I baked the accounting. And we had people in every step of the way. And we had people in every step of the way. And we had people in every step of the way. Because all transactions have accounting. Financial implications. And so all the reporting and accounting and transaction knowledge that I built up in the 80s, I was able to apply into all that work into the 90s. I think it was just the overall aptitude about the computer, aptitude about the tools, understanding how the company worked. And I'm a big frameworks guy. I like to put together frameworks and have everything operate within those frameworks to an 80 percentile level and really a big believer in processes and that technology actually enables business processes rather than IT just exists. And now you've got to figure out what you're going to do with IT, you know. So with me, everything is about the business process. And so that's why I got the IT world. And my closing act in that, I had a couple of closing acts, I guess. One closing act was in 1997, I got moved up a step and I've got back control of the entirety of accounting. We implemented SAP R3 for all the accounting work and as well, we implemented SAP SD in an integrated fashion back to our supply chain system that we had built and used SAP SD to greatly enhance our reporting. And so we put all of that together. We went from closing the books in two to three weeks to five days with all the reports done. Wow. And really baked in a lot of stuff. I visited with Microsoft to find out how they did their reports out of SAP. And I put all the accountants in the conference room and actually taught them how to do it after figuring it out myself. And so I had a lot of fun. That's definitely the best period of my career, just because we went from an antique situation to Computerworld 100, cover of CIO Magazine, all that kind of stuff.

Megan - 00:14:50: That's amazing. And what year was it that you got the clothes down to five days? 98. Wow. Very impressive.

Steve - 00:14:57: It was really impressive considering that we really didn't start until Thursday morning. We had a Saturday month in, and then we had these processes that had to run through basically Wednesday night. And so the close officially started Thursday morning, and we ended by Friday afternoon. All right. Yeah, so one of the things I did when we went to SAP is I actually bid journal entries. I told everybody, if you're having to make more than five journal entries a month in, we've done something wrong.

Megan - 00:15:25: So have you always enjoyed learning new things and taking on challenging situations?

Steve - 00:15:31: I'm very curious. My curiosity extends across a very eclectic range of things. So, yeah, I think that's it. I mean, one of the things I learned from my grandfather riding around in that pickup truck was to be constantly learning and constantly curious and constantly questioning. And so that's just baked in. I mean, it's been baked in forever. And so a lot of people, it's like I'm never content. But my philosophy is, okay, we're good today, but we can be better tomorrow. But we're not going to do that in any type of haphazard fashion. It's an orderly ability to get better. Process that I like to have. And I look at transformation as a journey, okay? Because there are problems I solved in 1998 that I first wanted to solve in 1988. And in order to solve them, tons of stuff had to get done as processors. And so understanding the order to the problem and having the patience to build all the capabilities that are required really hardwork. And one of the results of that was I had a list of 50 things that Tyson had deemed it possible to get done. And by 1998, all 50 were done.

Megan - 00:16:51: And I know throughout your career that you've led significant business transformations from your role at Globe Express Services to now your current position at Morgan Foods. So can you share with us some key strategies that you've employed along the way to navigate these complex transformations successfully?

Steve - 00:17:08: One of the things that happened in 1990 and 91 that I took over IT was I got digital much more involved in what we were doing. And digital brought me a gentleman named Roger Billings. Roger Billings was a program management guru. And digital had done a lot of transformative work in the 80s. And Roger was the leader of that. And so basically, Roger became my teacher and taught me a lot of things. And we executed those from 91 through 93. And I still use them today as far as how to go about that. And there are certain piece parts, too. And one of them is fundamentally, you need to know the landscape of the business. And so. That's the organization, the people, what systems are available, and know the processes. One of the advantages I had at Tyson was I basically knew every process. And what we did with Roger is that we went through a mapping process. Basically, we mapped the entirety of Tyson food using a process that he called the brown paper process. And the brown paper process was one where you go interview, and in those days, there were desks. People had more specific functions. But basically, you framed up. What's the big process here? Order to cash is a little too big. So you narrow that down to sub-processes. And you go and you interview the people in those processes and they tell you how they do their job. And the important part is that is you let them tell you how they do their job. You don't. You play ignorant. And you map. If they use an ugly notebook, then you put part of the notebook on the brown paper. You paste pictures of all the computer screens they use. Worksheets. You put samples of the worksheets. If they get a report, you put samples of the report. They're very ugly. And one of the things I point out to people a lot of time is documenting processes on flowcharts. Whoever draws the flowchart always wants it to look pretty. They want the flowchart to make sense. The problem you have is actual processes in life may not make sense. And when you throw in that notion that you want to find how to make it look like it makes sense, you bias the process. So these brown papers, in many cases, were very, very ugly. We had one process we called the amoeba. Because you never knew where it really started. You never knew where it really ended. And so we used that with people. We would review it with the operative till they were confident that we had placed every piece of their work on that brown paper. And then we would review it up to levels of management. Roger told me several things we would find where I said, no, not us. And we found them all. But one of the really important ones was that when the next level of management would review the brown paper, they would inevitably say, no, that's not what they really do. And then they left this other thing out they do. And I had been wondering how we would write software for people or software had been written for people. But when it went into the business, the business would reject it. And I learned through that process was the reason was that the people writing the software were listening to the bosses. And the bosses really didn't know what was going on with their people. So a fundamental notion with me is what's the reality of the landscape and the processes? You know, are they pretty? Are they ugly? How are they executing it? Are they system technology enabled or not? So I take inventory of all of that. And then once you see all that, you kind of can get a clear view of what the business capabilities are. What's good? What's suffering? What's missing? And to decide what's missing, you've got to bring a business framework on top of that many times. Although within that type of process, people will usually tell you what's wrong. And how they think you should fix it. So you don't have to be brilliant to figure things out. You just have to go ask. And then you really got to get a clear view of the business needs. They're different. So like Tyson needed a whole new technology and supply chain infrastructure to operate under. Globe, our focus was global cash management and an accounting system. I wrote out a worldwide accounting system, consolidated like 170 bank accounts together with one bank and really had to spiff up the cash management and how we got numbers. Because if I wanted a cash balance from the company, it took three weeks. So I got it down to three minutes. So at Morgan Foods, the needs were really more supply chain, supporting growth, and the fact that they had implemented SAP in the year 2000 hadn't changed since. And beyond that, didn't believe it was possible to change it. So the needs are different once you get everything laid out. And then within all that, evaluating what's the desire for change, what's the readiness for change. And then most importantly, what's the capability of changing? Because you can be ready for a change, but not have the capability to make it. And so one of my themes in everything is this building capability. What capability do we have to have to accomplish X? And then as part of that also, I want to know the key challenges. I want to know what's going to be hard and what's going to be easy. I want to know who's going to be the person whose change resistance I'm going to have to overcome. I need to know politically who owns what and how they're going to feel about this and how I'm going to manage that. So I really want to know all of my challenges before being laid out. And then within all of this, you got to communicate, communicate, communicate. And you can package all that up and basically decide what you think you want to do. And then basically, you've got to come back to the organization if you're going to go transform. And be able to make a compelling why. And I came up with that before Simon Sinek did, actually. So, I mean, there has to be a why, and it has to be a why that people will buy into. And there has to be a clear vision of what done is going to look like. So you have to have those things to chart the course of change. And then all your homework you've done gets you in position to really do a deep dive into requirements. So, for instance, when we did the work at Tyson, not only did we map the entire business, but we mapped the entire computer system function point by function point and matched it up with the code that performed that function point. Because to some degree, we were going to do what they call a lift and shift kind of thing. We were just going to rebuild some areas. I was exactly the way we were. But I also had an evaluation of which function points were okay versus which weren't. And the result was that our whole inventory system was rebuilt not that different than what had been in the old Unisys system. Our sales order management system and how we did our sales accounting, leading into sales reporting, everything was completely redesigned. I think it's part of that process. So, this landscape working your way to the why. What you really need to do are fundamental pieces of the puzzle.

Megan - 00:25:13: And how do you identify the supporters versus the people that are going to challenge the change you're trying to implement? What do you do with the people that challenge? Well, typically,

Steve - 00:25:26: if there was enough detail in the process leading into the discussion, the challengers would cave along the way. Because typically, you can make it pretty clear why you wanted to do something. Not always. As far as the people that were going to be from the operative level up in the change, there's always key influencers. And so you really want to identify the key influencers. And I like to make them part of the project staff. It's not a nice way to say it, but typically, I like people peeing out of the tent, not into the tent. I vote all the problem makers. I tend to try to get them involved in the project. But key influencers come along pretty quickly. Other people follow key influencers and people that are really difficult. Once they realize that everyone else is very resolved to make the change, they tend to self-select the in or out. And I have a speech that comes along typically in projects, which basically says you're either on the floor playing or you're out on the street. We don't have people in stands. Company. So pick your spot.

Megan - 00:26:41: And you mentioned having spent more than 20 years at Tyson Foods and having seen tremendous growth during your time there. So how did you navigate the challenges of scaling financial operations there and also integrating digital solutions to support that expansion?

Steve - 00:27:00: That was a bit tricky. The McCormick and Dodds general ledger and Dodds general ledger we put in in 1990 was barely sufficient, but it got us by for that period of time. The accountants actually thought I had abandoned them to go work on the supply chain. What they didn't realize was I was making accounting, which had been very manual, back into the supply chain. And that's when I realized, okay, I got to get them in the project. They've got to understand this better and realize what we're doing and how the things that were being done, particularly on the supply chain, redesign of accounting, which I did with them. I had designed the original accounting system back in the 80s. So the changes that we made, I felt like it was okay for me to drive that, even though I wasn't formally in the accounting department. But I got them real involved and we satisfied a lot of reporting needs. That we had somewhat satisfied in the late 80s using some other tools around the Univac system, but it was very awkward. And it also relied on one particular genius in the company, one hero. In making the change, we moved to where we no longer relied on the hero. It was much more in the control of all the accountants, and they were able to do reporting much, much quicker. And the faster we could do reporting, the less accounting or accounting staff was needed. Okay. And we got to SAP, which is really when the whole story came together. It turned out that we needed about half the number of accountants. And our accounting grew in a somewhat literal fashion with the business up until about 1994 or 5. And then stabilized. And then by 1998, we didn't need half of them. And what I did then was basically I created FD&A groups in all the business units. By then, I was about to become CFO. So I created FD&A groups in all the business units. Because what we did in the accounting transition, we benchmarked everything. And basically came up with a very simplistic bar chart. Here's the transactional work versus here is the analytical work. And I kind of added an hour spent in reporting bar in the middle of that. And when we first did that, the transactional bar was very, very tall. The analytical bar was very short. And the reporting bar was very, very tall. By the time we finished with SAP, the transactional bar was very small. The hour spent in reporting bar was very small. And we had this big investment in Financial Planning & Analysis, planning, analytics. Every business had their detailed people to go to and such. And then when I became CFO. We started doing an investor relations transformation because I wanted all the information to flow to me in a very systematic fashion. So we actually took those Financial Planning & Analysis groups and oriented their work in quarterly presentations and such, not only around business efficiency matters, but it was also all oriented so I could sit on a conference call and forecast earnings per share. And so, again, continual work there that we did. Tyson, in principle, had always tried to automate the accounting transactions. When I got there, many, many transactions happened automatically. Journal entries, in fact, happened automatically. Lots of subletters and such. And so we have a good base to start from, but we greatly expanded that. As I said before, in 1998, if any accountant had to make more than five journal entries a month in, then we had missed a trick somewhere.

Megan - 00:31:05: And you were a keynote speaker at Maximo World where you shared insights into digital transformation. So can you elaborate on the role of technological innovation in reshaping financial operations? I know you've been kind of talking about it along the way, but.

Steve - 00:31:21: So Maximo, we chose Maximo. Or basically old-fashioned maintenance, for bad maintenance. And so Maximo was something I'd been familiar with for a long time. In my IT work in the 90s, we actually rolled out maintenance systems all across Tyson. Saw huge reductions in maintenance inventory and more benefits than anybody would ever imagine. Morgan did not have a maintenance system, did not have a solid approach to maintenance. And we really need to evolve. And so I became a big push within the business to get better at maintenance. We brought in Maximo. We hired some more professional maintenance management and set off on the course. And to go from zero to decent in a maintenance system is about a three-year journey. So we've made that journey. We've gotten pretty good. We've got our maintenance downtime cut dramatically. Just tons of operational improvements, which make their way to the bottom line. Very nicely. And now that they know how to use a computer system and they really understand what we're doing. So now we're combining with the fact that our floor, shop floor, is covered with sensors. Most of our equipment is Rockwell equipment, which has a whole management console built into it. That our challenge now is to go from preventive maintenance to predictive. And that's the main thing. Of course, in the maintenance world, the stats say that half of your preventive maintenance jobs that you perform are unnecessary. And so moving to predictive, making use of those sensors is what we're about. And what Maximo offers us and why I was speaking to Maximo World is we have gone to the latest and greatest version, which is very different. The technology underbelly of that is very, very different. Or that IBM. So it's a huge change from that standpoint. And they added in other pieces of tools to that. They call the product MAS or mass MAS instead of Maximo. And they provide an architecture basically for data capture from all of our gadgets on the shop floor. And they provide the data lake and the reporting capability for that. And this integrates in with a desire we had within our cost accounting. Data capture. We use SAP, manufacturing, we do process orders to make soup and beans. We do production orders to label soup and beans. And we wanted to capture as much data concurrent with the process order as possible. And the reality was folks on the shop floor are running around with clipboards trying to capture a lot of this data anyway. We're piling it into Excel sheets and that we send to Contra Costa County and then put it over reports. So lots of streamlining we can do around that once we've mastered that. So there's a data reporting piece of that. And then there's the predictive maintenance piece, which involves a lot of data capture, analytics, probably going to figure out how to bake in machine learning as they call it. And to solve the simple goal of saying we need to have our equipment tell us before it breaks. I boil things down to simple goals. That's our simple goals. We need to figure out how to get our equipment to tell us before it breaks. So what capabilities do we have to have to do that? And then we work backwards. But I need that architecture. And IBM is all about making that change now. So that's how it puts in there. And it's hard when people talk about digital transformation, which has many definitions. But one notion of it is capture data and make the data more usable. Various ways in the business, whether that be analytics, real-time decision-making, or reporting and understanding to lead to higher-level analytics, such as, okay, do we need to add a processing line, lots of things like that. And so there's a whole journey around that as it relates to shop floor data all the way into how we do our operational reporting and our cost accounting and just continue to add granularity into the process. I have two guideposts I throw out a lot is I'm always wanting to turn the subjective into the objective and keep wanting to add granularity. And so that's what's going on there. And that will play into our financials and how we talk about our product cost. And ultimately, how are we going to make more money? How can we price better? How can we do all those type of things better?

Megan - 00:36:27: So artificial intelligence or generative AI, are you at Morgan doing anything with that technology yet? I know it's relatively new, but it seems to hold a lot of potential.

Steve - 00:36:39: Well, this is one of those. Beings where I think we have lots of opportunity with that. I think our readiness as an organization and that our capability is not there taking advantage of those opportunities and also achieving those maybe a bit cost prohibitive. The next few years anyway. So I see lots of ways I could get baked in, but we're not quite ready yet. Now, me personally, I'm digging into that stuff all the time. And I've been amazed at the questions I can ask it and the information that comes back from our chat chatbot or meeting with Grok lately. But I look at things like, OK, so to go back to maintenance, and there's lots of things in maintenance, but training and then making information available real time during a maintenance operation. Thank you. Such that you can just ask simple questions and it will come back and give you answers based on the manuals or the information we provided. I'm talking they're a constrained environment that we create, kind of a private chat team, so that we don't have people pulling out manuals and we don't have to have a more senior person. Babysitting a junior person as much as we tend to have today. And when new people come on board, we can get them trained in a better fashion. There's lots of uses. Another area of interest I've got from a new technology standpoint. Is continuing to automate processes that don't necessarily, we're predominantly SAP, but to automate processes that don't really live in SAP in such a way as to be automated, or that the workflow automation in SAP is just too complicated. And so digging into things such as UiPath. Process automation tools and everything. That's on my list. That's the next year list. But I can see that having some benefit. We're doing a lot right now with Ariba and doing work with our accounts payable process tied to Ariba. And then we're implementing a comprehensive pay process to increase our throughput and quality in that whole area of the business. And I don't want to add any more accounts payable people. I don't want to add any more purchasing people. I want to keep things steady. One of the things that we accomplished at Tyson in the early 90s, once we put the new system up, is we very quickly went to $4 billion. That was happening in 91, 92. But we went from $4 billion to $8 billion. And if you looked at the sales floor, as far as sales coordinators and sport and all that, we didn't have to add anybody. And we didn't have to add anybody. And that was all because all the new system work we had done, and it made things flow so much more smoothly, so much less manually and such. And I always used to get beat up about, you put in a system, tell me how many people it saved. And in a growing company, it never saves me. Of what it does allow you to do. I say never saves people. You can create situations where you might save people. But what you're more likely to do is get a lot more work through the same number of people you have.

Megan - 00:40:10: Yeah, critical for a company that's scaling quickly.

Steve - 00:40:14: That itself is a huge savings, yeah. And automation allows you to do that. I mean, just from a transformation standpoint, there are just so many things you can get into that maybe they're business, maybe they're technology, digital. But so, for instance, when I looked at our taking of orders. In the early 1990s, almost all of them were being taken by phone and key punched into a screen. And we had a broker network for both food service and retail for dominant parts of our business that basically were the ones calling in those orders. And so we moved from 3% receiving orders by EDI or 97% being keyed in over the phone to 100% EDI, both food service and retail over the course of about four years. And that was definitely one of the things that enabled us to not increase the sales for back office staff. And to do that transformation took... Number of interesting steps, but it also just took assigning a team, a very small team, and perseverance and being resolute that you were going to get this done. And so there were lots of piece parts that I had to facilitate through, but we did that and it ended up saving an awful lot of people. And the fun thing about all the EDI stuff we did and embedding it in the systems was in the 1990s, you kept getting letters from customers that said, if you don't have capability X or capability Y or capability Z within the next two years, we're going to quit doing business with you. And that was usually a doing business electronically being. Type thing. And we actually got one of those from a customer once. By then, we could do everything in the letter. It had been able to for a while. We went and visited the customers. We took the sales team and we took the team that can facilitate all of that and said we were ready to start. And in fact, we were glad to have someone who was really ready to start. Well, it turned out that their letter was all on the facade. They sent the letter because everybody was sending the letters. And the only person in the company who seemed not to know that it was a facade was the CEO. And three months later, they had a whole new staff.

Megan - 00:42:45: Yeah.

Steve - 00:42:45: He was that upset about it. So doing business electronically. And we had an advantage also. Ruth Heisenhoff was 15 minutes from the Walmart office. So many of our firsts were with Walmart. And, I mean, we were a beta customer on Retail Link. We were joined at the hip from the word go. And that really helped us with a lot of our business stuff that we did. But I also, I put Tyson people on all the EDI transaction committees. So we were involved in the development of every EDI transaction in the early 90s. So that framework of doing business electronically, I mean, we were right in the big middle of that. And that's why I baked it. I baked it into a system we wrote out in 1993. All the internal communication in that system took place within a Business EDI type framework. And so, as I said before, an internal warehouse, external warehouse, it didn't matter. We could deal with them exactly the same way.

Megan - 00:43:45: So looking ahead, what do you see as the next frontier in business and digital transformation for CFOs?

Steve - 00:43:51: Well, for CFOs, I think there are CFOs come in many different flavors, but you don't want to as a CFO to get fooled by the possibilities of technology. I observed, I mean, I'm a big fan of reading about business transformation and digital transformation, which many times are war stories of what went wrong. And many times are platitudes about this methodology or some other methodology. I'm a believer in methodologies. I just think we get a little carried away sometimes thinking there's a one size fits all. So this notion that could get presented to the CFO that technology is going to solve some problem. And a lot of people, one of the fundamental mistakes they make is just that. And I think that's not going to go away. For a while, I see things. In fact, I saw an article once that said a digital transformation should take 18 months. So if I'm a CEO or CFO and I read that and halfway believe it, I'm already in trouble because I don't know of any real transformation, business or digital. In any enterprise of any size. I mean, Morgan, we're a half a billion dollar company. I don't know of one that's going to take place that fast. And I also see digital transformations that start out with, let's buy a new ERP system or let's buy this or let's buy that. And then many of the steps that are necessary to success laid out in the methodologies after that. And so I think there's just a lot of bad information out there that CFOs have to be very wary about. As far as transforming a business, they don't really teach transformation very well anywhere, I don't think. I think you have to learn through the school of poor talk. So I think CFOs need to be very wary about all that. But at the same time, I think they need to be curious and dig in and understand the realities and still make progress and then help drive the business. I think as CFO, whether it was at Tyson or every stop along the road I have made, I have found a huge part of my job being in framing up how the people or how the company needs to view its numbers internally. And teaching everybody, literally teaching in many cases, people how to use the numbers to drive the business. Yes. Gain more value. Not all managers are know-your-numbers type managers. I would argue most aren't. Yeah, just because you put a number in front of someone doesn't mean they're going to know what it means or why they care. Yeah. We have a supply chain number today that's a very simple number. It tells us what percentage of orders had to be touched by customer service. And basically, if that number is very low, that tells us we're not having shortages. It tells us we're not having other related problems or whatever. If that number is high, it starts telling us there's a lot of things that are probably going wrong. Yeah. There's a lot of other numbers that could have told us that. But finding one or two or three numbers that you can get people to understand and understand the meaning and then relate that right back to business performance is very important. And I find that just takes a lot of teaching. It takes a lot of work to drive to what those numbers are, but it takes a lot of teaching and training. And so that's a huge part of the CFO's job, I think. Now, some CFOs are basically totally oriented to financing the company and that cash flow. And all of that's tremendously important, too. But maybe those CFOs need to ensure they have someone working with them for them that really understands the operational side of the business. But for that CFO, if they're in a public company, it all comes together that day. You have to sit there. And do that conference call, or you can go do all those investor meetings and everything. I mean, being prepared for an investor meeting at Tyson with all the questions we might get asked was a huge exercise. I mean, that involved probably 100 people during those quarterly reviews. I mean, we had huge business units, billion-dollar business units. I mean, Tyson's, when I left, was a $28 billion business, and today it's, what, it's up in the 40s. So there's a lot of architecture to go in there. And I will say, a lot of the stuff I put in back in that time period has all survived the 1993 system. Was decommissioned in 2016 when one guy that I had worked with, called me and told me the 18-year SAP project was over. So they finally got the company totally transitioned. But that system lasted, by the time it was done, it was supporting over $22 billion in sales. And so the architecture we chose, how we put the thing together, I used to joke we did three-tiered client service before everybody else did two-tiered. And I'm sorry, I'm a geek around tons of stuff. But, I mean, stuff held up, and then the concepts we built around. The structure, the organization, and such have all held up. And I still read articles today that talk about some of the things that people ought to be doing than we did in the 90s. So it's been an interesting, a very interesting career, and I've enjoyed it very, very much. And I think any CFO or anybody walking through all that should be as lucky as I've been to be able to have the experiences and work with just hundreds of amazing, great people because people want to embrace their organization, and people want to make things be as good as they can be. And I'm very transparent, and Morgan, we're very transparent with our numbers. And getting everybody bought in and understanding the whys and understanding the hows, understanding the hows, understanding their roles in that. Of course, in an article, that will simply all be referred to as alignment. It's important. But there is a lot that goes into all of that. And I think the CFO plays a huge role with that. And in fact, besides building the infrastructure to support growth at Morgan. The only other instruction I had was to create greater alignment among the management team and get us more focused on making money. And so that's core.

Megan - 00:51:01: There's no doubt that you have had an amazing career. And yeah, we're going to have to have you back on the show because there's a lot more that I'd like to ask you. But for now, thank you so much for being our guest today.

Steve - 00:51:14: Well, thank you for having me. It's been fun. And I love talking about all this stuff. I bore some people to death and some people like, oh, maybe that was good. I don't know. So, but I enjoy it. So thank you very much for having me on.

Megan - 00:51:27: Yeah, no, I really enjoyed having you on. And thanks for finding the time to be here with me today. And to all of our listeners, please tune in next week. And until then, take care.