“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 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.
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.”
- 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.”
- 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.”