“I came in as CEO in 2013, and E*Trade was struggling – it needed a turnaround. It was an existential crisis. Topgrading helped us survive and flourish.” – Paul Idzik, CEO

E*TRADE

The Company:
E*TRADE Financial Corporation is a leading technology-enabled company and a well-recognized digital disruptor within the financial services sector. It operates in both the B2C and B2B spaces via award-winning online platforms, and a large network of licensed representatives and financial consultants who handle phone and in-person interactions with its customers.

The Challenge:
When Idzik took over as CEO toxic investments in the mortgage business dating back to the 2008 financial crisis were dragging the company down. He said, “I had very few A Players in the top 2 levels. A couple of key mis-hires could have caused the demise of the company.”

The Results:

  • From 25% to 75% A Players hired in upper management ranks
  • From 10-year performance of -20% to 3-year performance (since Idzik became CEO) of +150%
  • 6 out of 7 of the top team were replaced, 100% with A Players
  • Recruiting A Players became easier; the rigor of the Topgrading method sent a message to the financial world that E*TRADE is serious about talent.
  • “The organization culture is dramatically better. Our A Players set high goals and work collaboratively.”
  • “By clarifying accountabilities up front, our annual reviews were better.”

Topgrading Implementation:

  • Idzik had used Topgrading at Barclays (where he was #2 executive) and at DTZ (now Cushman & Wakefield), where he was CEO, so he launched Topgrading without delay.
  • A Topgrading Professional conducted multiple 2-day Topgrading Workshops for managers across the company’s key locations.
  • Idzik then required that the Topgrading methods be followed (including Career History Form, phone screens, tandem Topgrading Interviews, and candidate-arranged reference calls).
  • Idzik personally serves as a tandem interview partner not only for positions reporting to him but sometimes another level below.
  • A Topgrading Professional initially served as a tandem partner with some hiring managers (to serve as a role model).
  • Topgrading Online Solutions is used, including the Topgrading Snapshot to screen candidates, and auto-populated interview guides.

Paul’s Insights and Advice to Would-Be Topgraders:

  • “If you are the CEO, you must be the key driver. HR is essential but when managers are tempted to cut corners, it’s the CEO who must say no.”
  • “Constantly focus on the big picture – how important top talent is in every job. Don’t just fight fires replacing a couple of people. Make achieving 90% A Players a never-ending quest, to be discussed and reinforced daily. Don’t settle for a B Player replacement for a C.”
  • I suggest that CEOs consider personally assigning the tandem interviewers, to be sure all interviewers are really good and the pair will make a good team.”
  • “Look forward to a much more positive, exciting organization culture with almost all A Players.”

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