In October 2008, Fred Tomczyk spent his first month as TD Ameritrade’s CEO under fire. He found himself running the financial services firm amid a punishing global economic crisis.
Many leaders shifted into survival mode during that harrowing time. To ride out the storm, they cut costs and avoided bold moves.
But Tomczyk inherited a company that was struggling with integration issues after acquiring TD Waterhouse two years earlier. The economic collapse only exacerbated his problems, and he knew he couldn’t just play defense.
He decided to overhaul the firm’s business model. Rather than continue to grow via acquisitions, he shifted TD Ameritrade’s focus to organic growth. That meant changing how employees managed their time and priorities.
To announce the overhaul, he hosted his first town hall meeting with 6,000 employees. In planning his remarks, he realized his workforce was more concerned with short-term job security than boosting TD Ameritrade’s market share or the firm’s long-term success.
“They were worried about their ability to survive the crisis and just wanted to stay employed,” Tomczyk recalls. “I’m sure some thought I was crazy.”
He knew no one in the room could control the global financial panic, so he refused to focus on the grim economy. Instead, he discussed what he could control: Devising a strategy to strengthen the company over the long haul so that it was well positioned for the recovery.
He told employees that the company would seek to increase market share while competitors were retrenching. He said that TD Ameritrade’s strong balance sheet afforded it the opportunity to make aggressive contrarian moves such as raising marketing spending, adding hundreds of salespeople and investing in technology upgrades.
Tomczyk’s gamble paid off. Today, the company boasts an even stronger balance sheet after five years of double-digit organic net new client asset growth.
— Adapted from “Moments of Change,” Fred Tomczyk.