Radical Innovators #20 leading with wellness: supporting people in the moments that matter with Ally Financial’s Kathie Patterson

In this episode of the Radical Innovators podcast, host Frank Congiu sits down with Kathie Patterson, CHRO of Ally Financial. During the conversation, Kathie shares her journey from a modest Detroit upbringing to leading HR at a major digital bank, offering deep insights into how Ally Financial maintains a competitive advantage through its people-first culture. 

She also discusses how her background as a first-generation college graduate shaped her perspective on economic mobility and the critical role of corporate citizenship in the modern workplace.

Other highlights of the discussion include:

• holistic employee experience: how Ally Financial supports the financial literacy and overall wellness of both its internal workforce and the broader community.
• moments that matter: the importance of an employer showing up during vulnerable life events, from starting a new job to navigating a loss in the family.
• internal career mobility: overcoming "manager hoarding" and encouraging employees to continuously learn, grow and move into new roles across the organization
• human-centered AI: integrating AI tools as a supplement rather than a replacement, ensuring people remain part of the process for judgment and empathetic connection.
• leading through transformation: addressing "transformation fatigue" and the necessity of maintaining grit, judgment and resilience during rapid technological and market shifts.

Transcript

SPEAKER_00 0:00

Welcome back to the Radical Innovators Podcast. I'm your host, Frank Hanju, and for this episode, I sit down with Kathy Patterson, CHO of Ally Financial. Watch as Kathy shares how her company supports employees financial literacy, shows up in the moments that matter, maintains human connection in the AI evolution, and overall drives wellness in the face of transformation. So let's dive in with Kathy Patterson. Kathy, welcome to Radical Innovators. So great to have you on the podcast today.

SPEAKER_01 0:33

Thank you, Frank. Um, wonderful to be here.

SPEAKER_00 0:35

It's funny because when I was at MYU, I studied psychology and I had this thought that that's the path I'd pursue. And then I shifted degrees and I went into accounting. Now I don't do either of the two. You know, you you pursued it further than me. And then you're in uh the role of a CHO now. I'd love to hear, and I'm sure the audience would love to hear in terms of what that has done for you in terms of empowering you to be the best CHO and leveraging all of the education you have in the in your current role.

SPEAKER_01 1:02

Um I grew up in the heart of Detroit, um, very modest family, first generation college grad. Um I had a mother that pushed me really hard to be independent, and I had a father who had a very pragmatic view about what truly matters in terms of deep, meaningful relationships and good health. And I think that foundation really served me well. I fell into IO through academics, but I started off in engineering and it became really clear, Frank, that I was not with my people. Um, and I um switched over to industrial organizational psychology because it built to some degree on the mathematic component. I originally thought I was gonna go off into teaching um in industrial organizational psychology because that's usually what you got to do with a psychology degree. You got to pursue that of uh a doctorate. But I was um fortunate early on in my master's program, I had to find a practicum. And um, as a result of that search, I thought it was a full-time job. And it was from that point, my my career sort of took off. I um was part of rebuilding HR systems that was really a result of a discrimination law. So you want to talk about sort of like activism by fire at a very early stage of my career. It taught me that HR, you can't hide behind policies, you need strong judgment, you need to understand the business, you need to have the courage to make the tough calls. And uh, through that journey at that first uh my first place of employment, I met my husband. And when the opportunity came to come over to GMAC, I was 26 weeks pregnant with my third child, which is not the ideal time to sort of jump from one another. But I learned that, and what I still believe is that timing's never perfect. So you have to make bold moves when the opportunity is right, and so not necessarily when it's convenient. So I've been here for 18 years, which is a little shocking to say out loud. I started at the time it was GMAC and then they transformed into a digital bank. So it's been quite the journey. So that's a little bit of my background, and you know, hopefully gives you some insights of, you know, as we continue this conversation, what has sort of shaped my path.

SPEAKER_00 3:16

Yeah, the non-traditional career path. We hear it um a lot on here. So it's always great to hear that because I think many of the people who are listening aspire to eventually be in the role that you're in. And the reality is there's a number of different paths to get there, and we've certainly um had uh varying uh stories of what that's looked like for leaders on. But you've taken on more responsibility and more recently. So I think about your your role and and how that's and now includes corporate citizenship. Um and what does that fundamentally change the way you're you know you're looking at the role and the way you're leading the organization?

SPEAKER_01 3:51

Well, I've taken on responsibility for our philanthropic ethic, which includes our citizenship outreach and our foundation. And it's isn't just organizational logic in terms of how do you bring the structure together, it's personal for me. Um, you know, as I mentioned, being first generation college grad, I have seen sort of firsthand how hard it is to break through the poverty lines without a strong foundation. So, you know, when I think about my role leading human resources and that the number of teammates that we have that probably live paycheck to paycheck, um financial literacy and management is not something or a discipline that's probably well taught within the school systems. Um, I recognize that it requires access, opportunity, and strong financial foundations. And that's not just what we need to do for our communities, but how we how we support our own employee base. At Ally, we've rolled out money roots and money skills, all efforts around financial wellness and programs to understand their mindsets around money. But you know, what are we doing for our internal employees? So really thinking about how we're bringing those services to an education for our internal employees. It's no different than what we're doing within our community if we're just supporting economic mobility. So it's, I think, even via lens of how to create more of a holistic employee experience. But, you know, even for those that don't live paycheck to paycheck, there's an enormous amount of pride I think employees have in being part of an employer that gives back to their communities. So there's that connection as well in terms of driving the engagement of our employees, strong points of pride. So integration has been strong, and it definitely is really thinking about how we're we're strengthening the employee experience.

SPEAKER_00 5:43

Yeah, I mean, you hit on two things, uh, right? One, which was where this podcast was born out of, which are what are the world's leading organizations doing to improve the lives of their employees? And then something that I'm very personally passionate about and growing up in a very wealthy town, but um an uneducated family, where I'm the first person ever to go to college. And so one of the biggest things that I always found was the school system does not prepare you. Um, and and why I was so inspired by partnering with John Hope Bryant years ago around getting financial literacy to be more of an imperative. So it's phenomenal to hear that you're not only helping do this for the community, but also for your own employees. And I think that shows up, right? Because you were recognized and listed as Fortune's 100 best companies to work for in 2024 and 2025. And it's one thing to make the list. It's hard to continue to be on the list. But I'm curious, what are some of the key changes in employee feedback or the talent strategy between those two years that helped you um maintain uh or improve the ranking? And then also, what are you looking at doing in the coming years to continue to stay on that list?

SPEAKER_01 6:46

So I believe, I think at the core that employees want to have a strong personal and professional connection with their employer. And I believe that we to really have a competitive advantage, you're figuring out how to drive that intersection. I believe it starts as an employer of showing up in moments that matter for our employees and understanding the moments that they're vulnerable and how are we providing support to them in those moments. That can range. We've we went out and we uh surveyed our employees to get a better sense of like where's the moments in which they're really uncomfortable. And some of it is what you'd expect, right? It's I'm starting a new job, just got promoted, it's the uh death in the family, you know, so something just happened and now I need to navigate the most are really high. I have an employee concern, concerned about raising my hand in terms of how to how to handle it. We really step back and try to understand what those moments that matter to our employees are and design a process and a support system that's there that meets them. And you know, that ranges not just from company like HR services, but it's about benefits too. Like, how are we modernizing our benefits to make sure that we support our employees? And so I do think a large part of our recognition for being one of the best companies to work for has to do with the fact that I think we really work hard to be in tune with our workforce. Um, we also just recently earned a first-time recognition for um for women and parents. And this matters because it's it shows inclusion. So it includes, you know, identifies the fact that we are designing for inclusion and also designing for the reality. Being a mom with uh three kids and managing an enormous amount of change, I'll be the first one to tell you that. Uh life is you know, life can be very floppy at times, right? Most people have very full lights. And so as an organization, you don't want to frame that as an accommodation. We have to design around it. We have to realize that that's the reality. And truthfully more than likely, that's the type of teammate that we want. I think that a little bit of the secret thought competitive advantage, but when I start to think about what we need to do as we continue to move forward, I think a lot has to do with continuing to drive career mobility, have having employees make sure that they stay career else and how they're continuously learning and growing. And I think that will just be an ongoing sort of learning. You know, right now it's about AI and understanding what that means and educating the workforce. And you're you're seeing now more days that um employees also expect to have not just professional learning, but personal learning, um, time management, wellness. So really keeping up with that agenda, I think will be at the forefront.

SPEAKER_00 9:40

Yeah, and you hit on a few things I want to just go a step more into. I think about you've launched your purpose, people, and impact report and and talked a lot about this people first, human capital approach. So I'd love to hear how that's also helping drive the business goals. And then you also in that last comment talked about um the internal mobility, which is a number of the organizations that I'm talking with now. It's such a priority around how do you retain this talent that's like been historically a great fit for the culture, but maybe isn't a fit for the for where the organization is going from a skilling standpoint. And so curious, like what you're doing to help encourage some of those uh organizational transitions and and to make sure that these people do stay with Ally.

SPEAKER_01 10:23

Hands down, our culture is seen as our competitive uh differentiator. I mean, all we have is our talent, right? I mean, that's uh really the the core of our our organization. That's it's that that's our intellectual property. That is what's making the difference. And it's not just managing for compliance, it's making sure that you know we are leveraging a strategic advantage. And people can vote with their feet nowadays. It's so easy, especially in the financial industry. I'm gonna go across the street. Really creating a workplace that people want to be a part of. And they feel like they connect, they feel like they're they're heard and they can contribute. And I at the core, I believe people really want to contribute to something that's meaningful and bigger than themselves. So I mean, we're all in with our employees. I mean, we've we've worked hard to make sure that we've modernized our benefit. We've worked hard to make sure that our frontline employees feel like they have a voice. And if you are all in with your employees, your customers feel it. And if your customers feel it, your shareholders feel it. That's a very simple equation, but man, it's one that I think was sometimes it's easy to get backwards. If you were to say, what is that people first human capital? It really is about recognizing that your employees are your biggest competitive advantage, they're human, they live full and sloppy lives. How are you driving sort of greater meaning for them through their work? Um, and helping them continue to grow. We as an organization use like the do-it-right mantra, which um is part of the ethos of who we are. And you know, we've when we launched our brand, the one thing that we said is like, wow, do it right is that's really aspirational. But uh, you can't do that if your employee value prop doesn't line up to it, right? You can't you you need to have your employees believing that so they're driving that same value prop to the customer. And so as we talk about that purple people first, I do want to highlight that that brand promise is deeply connected with the way in which you know we lead internally as well. I'll tell you the biggest hurdle with mobility is manager mindset. We work really hard. It's the same story, Frank, that people leave managers, they don't leave companies, and you can argue one way or another, but um, either way, that manager relationship is important. We don't talk about it a lot, but managers are just equally as invested. And that mindset of managers really feeling like when they lose talent to another department, that it's a loss versus this is truly what your role is, and this is the right scorecard for you in terms of how you're developing and growing our leadership pipeline. So that I have to say is probably the biggest hurdle and continue to drive the fact that managers need to be empathetic, they need to have strong connections, they need to know their employees um personally and connect with them on that front. But then when the employee sort of advances or leaves their department, I think it's a breakup that doesn't always feel good in the moment. And so helping managers understand that that's their role and rewarding managers for developing their talent and moving their talent forward. Um we're still working on it. We're really happy with our mobility rankings, but I, you know, there's still opportunities for us to sort of continue to grow our leaders. They can let go and encourage their talent to move on a little faster.

SPEAKER_00 13:50

It's a tricky one, right? Because talent hoarding is not new. This is what is historically happened in most organizations. And to your point, people feel stuck and then they leave. And you see the most successful organizations in the world that have thrived at this. I think about the work I did GE with GE 10 years ago, they were very intentional about their rotational programs and actually measuring and incentivizing managers who did move people around the organization. So they were recognized and rewarded for that. And it's those policies that help drive the right behavior. But your point, it's um it's it, that's that is a hard behavior to shift because you you, if that scorecard is I need to be pre-producing and the team I have around me is helping me produce, it's hard to want to um have that person's best interest at heart. I'm sure we you know we've all been on both sides of that equation.

SPEAKER_01 14:36

And then when you add that resources are tight or that the learning curve for a role, there's and geography, you know, truthfully, sometimes geography plays a part because you know, we in Detroit might have certain functions, same thing within you know, other markets, it might be predominantly customer service. So that has also um probably created a little bit of a hurdle for us that we're working through. But I am proud to say that you know, the majority of our posting positions go to internal. We do get preference uh internal candidates over external continued effort. We want to be your destination for your career.

SPEAKER_00 15:15

How are you equipped as an organization to help really with employees with this? And what are some of the best practices? Are there some great partners? Are you being very intentional about the the time allowing people the time to leverage these resources? Are they rewarded for doing it? Just curiously, if there's any best practices that you would share of which other um organizations that are thinking about this can benefit from.

SPEAKER_01 15:38

So we rolled out our ally AI across the enterprise in 2025. And our focus was really about creating um educating our employees around how can they use this tool to become even more productive, using it more as a supplement as opposed to a replacement. And being within the financial industry, I think we have to be very careful around taking unnecessary risks. So we've we've worked hard in terms of making sure that we have the right governance in place of how AI is being used in uh specific parts of our business. But so much of our focus has really been on the education workforce of how to use the tools, how to create good. So some of the things that we've done is we've gone into uh like collections, gone in, pulled sort of the change agents, and asked them tell me how this tool can make your life easier. Tell me how uh a frontline collector needs this. And so leveraging um actual teammates, some of those change agents to really help us think about what the applications are to reduce that sort of scariness. So I I would say that that's what the other is that we are working uh really hard to democratize our data. Um, so much of making AI fuel that you need to have clean data. Um, and so so much of our efforts have really gone into data governance, looking at how we can democratize our data so people can use AI to really speed up their work. And so I I I wouldn't claim that we have a silver bullet on this particular front, but yes, you know, so much of it is trying to reduce the scare for employees and getting them a little comfortable. I just recently uh had an interview, and so much of it is you know, the difference in skill set, you know, you might not need someone of the the same rote type work, but you will always need a level of human interaction when it comes to judgment, decision making, programming these agents. Um and yeah, like we are human species that strive for connectivity. And so when when there's moments that matter where emotions are high and that's complex, people don't want to keep hitting the the button for an AI agent, right? They want to talk to a human um that can listen, that can be empathetic. And not that an AI agent can't be programmed to be empathetic, but I think there's a high need for human connection in moments of stress or when stakes are high. And so from that standpoint, we do have, I think, a strong do-it-right view of like there will always be a human in the middle and recognizing, especially being a digital bank, um, there's gonna be times where our customers are so, you know, we want to move fast and it's efficiently, but then there's gonna be other moments where it's like, I want to make sure that you understand what my issue is, I want to make sure that you heard me. I want to know if there's an exception that goes above and beyond what you programmed your computer to do. Um, and I don't I don't necessarily see that changing. Um, even with the younger generations, I still think that there's in those moments a need for judgment and deep connection. So when we start talking about upskilling, you know, really trying to get our employees to be more agile, embrace technology, um, be more open to change, seeing around corners. Um, but it a lot of it's really sort of trying to drive more life skills into our DNA within our organization and reinforcing it.

SPEAKER_00 19:16

As you think about that, what's the one non-negotiable trait you look for when you're hiring senior people, whether that's in the HR organization or just across the business? Because you talked about this idea of data cleanliness and transparency, the value of not leveraging bots and AI and agents and everything, right? And making sure that the human element and touch is still there. As you're thinking about the people you want to bring into the organization from the outside, what's what is that one non-negotiable trait?

SPEAKER_01 19:45

When it comes to early talent or interns, I want to see that they're they can take feedback. I want to see that they're they're open to feedback and they have a level of learning agility. I want to know that they're they're learners. I want to learn that they're adaptable. I want to see that. I don't want interns that are overly fragile for feedback that um will help them grow. I I don't want knowers within. I want somebody that is willing to inquire and ask questions. To me, that's an important quality. That if you have that foundation skill, it's pretty easy to sort of develop and grow your talent from there. When it comes to HR, and it goes back to a little bit of my early learnings, man, grit and determination, but probably more specific judgment are really important for me. I struggle with how we HR leaders that might hide behind policies. You know, that's their first instinct in a tough situation is to like, you know, run and hide behind it versus saying what's the right thing to do, what's the spirit here? Um, that's important to me. And I don't want HR to be seen as a compliance theater, um, really about the strategic business functioning and thinking deeper about what the impacts are and change management. And so it's it's that judgment and it's also that grit that I look for. Like if I'm in the trenches, I want to know that my team's gonna be right there with me.

SPEAKER_00 21:10

So, and just I want to maybe wrap on a future uh focused question for other CHROs. I'm just curious what advice you'd give around elevating HR's role because the work that you're doing is so important. And I think a lot of HR leaders um don't have this as a formal role and responsibility. You're seeing more and more um, like the CHROs of ServiceNow Moderna take on the integration of AI being adopted in the organization and that being a focus. But this idea of having both human capital and corporate citizenship oversight, are there best practices or or even whether it's an organization wide level or at the individual level where you'd share some of the great work that you're doing that others can pick up on and scale as well?

SPEAKER_01 21:53

I think one of the things that uh for me is a principle that I continue to just want to apply. Especially when you talk about being a purpose driven company, is like how you treat your people during the hard times speaks volumes about the organization and what it says to those that are remaining within the organization or are in the not too long ago we we had a um a reduction in force. And I for me the it is so easy to think about how that could be a moment that could be driven through efficiency by an I think Kathy probably have seen it in some cases where people find out after 25 years that their positions being eliminated through an email or you know, uh a large employee broadcast. Um how you handle those moments I really think speaks volumes about your organization and what you're working. So for me, you know, really thinking long and hard about those decisions that were making those strategic pivots. And how are you mobilizing your team? How are you thinking about motivating them, inspiring them, um, and supporting them through? And how you handle those tough decisions, I think speaks buying. And I think that's where um strong HR leadership comes in because they help sort of think through with the level of intentionality.

SPEAKER_00 23:15

Yeah. I mean, as an organization, um, we support obviously a lot of organizations sourcing talent, but on the flip side of it, we work with a lot of organizations that are making those tough decisions and making reductions in forces and helping individuals find new roles. And to your point, I certainly see organizations that handle it incredibly well, and then there's others that handle it very poorly. And so that's one of those, if I go back to your earlier comments, moments that matter where this is um something that has such a potential impact, not only on that individual's life, but at the end of the day, on your brand as well. And so one of those things just to handle right for um for many of the right reasons.

SPEAKER_01 23:52

I I want to offer another challenge that I see probably more so that we as HR professionals need to sort of think about it in, man, technology's moving fast, markets are moving quickly. You see a lot of policy-related change. I'm really concerned about transformation fatigue and just the whiplash of how fast things are moving at such a steady, rapid pace for our senior leaders and for our employees. And there's no doubt the most successful companies are going to be the ones that can move fast but resilient and adaptable. We're still dealing with people and um we get hired. So making sure that you're you're really thinking about sort of driving wellness within your workforce, I think is important. But I do worry about sort of just the general um transformation fatigue that I think many have been feeling over the last couple of years.

SPEAKER_00 24:47

So maybe uh a quick question to you then is what is your best way to uh unwind and recharge?

SPEAKER_01 24:54

My best way to unwind um is uh truly um reading or doing yoga or going to this bond with my girlfriends. So, you know, that but if I really think about like what longs me, it's probably doing yoga.

SPEAKER_00 25:10

We talked a lot about financial literacy. Um, is there a favorite book that you recommend to people within the organization to help their improve their financial literacy?

SPEAKER_01 25:20

Oh, favorite book. Um well, you know, we might have a book that we put out that I would strongly recommend. Um The Money, no, I was gonna say the money tree, but that's one I used to read to my kids all the time. So I I The Money Tree is a great one too, that I strongly recommend. But I I think that one has a much deeper, uh more childhood memory. But um Planet Z is a financial literacy book that we at Ally have put out that I think is it's an easy read, but it's a nice way to start embedding some basic sort of um skills around how to manage uh your dollar.

SPEAKER_00 25:53

I'm gonna have to pick that up. Admittedly, I have not read it, but the automatic millionaire was was my pick um when I was young. It was one of those very easily digestible and actionable books. Kathy, thank you so much for joining us on the Radical Innovators podcast. It was great to have you on and hopefully get to see you um at another event at some point soon.

SPEAKER_01 26:12

Sounds good. Thank you, Frank. I appreciate the time.