Never underestimate the clout your company's employees carry in helping it weather the financial storms of a downturned economy, said TD Ameritrade President and CEO Fred Tomczyk during the opening general session of the 5th annual TD Ameritrade Elite Advisors Summit in Miami Beach on Tuesday.
Tomczyk, who was accompanied by TD Ameritrade Institutional President Tom Bradley on a panel moderated by Christopher Van Slyke, principal of Trovena LLC, outlined some of Ameritrade's successful strategies in surviving in a tough economic climate, and to actually grow while operating through one.
Tomczyk said a company's best assets are likely to be its human ones. "Always assess your talent so you have the people to take you to the next level; surround yourself with good people," Tomczyk told a room of an estimated 200 financial advisors at the three-day summit. "You always want to keep good people, and find a place within the organization so you can retain them."
Those specific employees are people who understand and embrace the company's specific corporate culture, he said. Besides retaining and developing the company's best workers, Tomczyk told the nearly filled ballroom of advisors that other key managerial skills that will help a financial firm survive and prosper are: Regularly communicating with your staff and your clients; creating a clear and simple corporate culture; looking for opportunities during economic downturns rather than embracing a "hunker down" mentality, and basing your company's key strategic growth decisions as much on intuition, experience and "gut feeling" as on spreadsheet numbers and calculations.
Communicating--to both company staff and clients--can be frequently overlooked. "A manager cannot do it all," Tomczyk said. "You should never underestimate the power, passion and enthusiasm of your employees. It is the most important thing you can do as a CEO."
As far as a firm's clients go, the role of management is to constantly assure them that things will eventually and invariably change for the better.
"Assure them that it (an economic downturn) has happened before," Tomczyk said. "That the economy has a history of ups and downs."
And those economic downturns don't preclude a financial firm from making aggressive moves. Instead of "hunkering down" during the economic tailspin that started in 2008, Tomczyk said, TD Ameritrade took the opposite tack and saw it as an opportunity to acquire more market share, a daring move that included spending a quarter million more in marketing during one quarter, Tomczyk said, adding that it was a move that raised the company's senior financial executives' eyebrows.
During tight economic times, Tomczyk advised financial advisors and brokers to measure the company's performance more frequently. "If you measure something quarterly, now do it monthly; if you measure monthly, not do it weekly," he said.
When it comes to making large strategic decisions, such as making a corporate acquisition or entering a new business direction, company CEOs should gauge such moves with a combination of financial analysis and "gut intuition based upon years of experience," Tomczyk said.
Tomczyk added any time he listens to a spreadsheet financial analysis on why the numbers make sense for TD Ameritrade to make a deal, he always asks his company's number crunchers one question: "What are those numbers saying to me? Tell me the key assumption behind those numbers that this deal will work."
Besides an acquisition being a compatible strategic decision for TD Ameritrade, Tomczyk said, it also has to have a compatible corporate culture as well.
"At the end of the day, you are going to make a gut decision," Tomczyk advised. "Whether you want to work with these people and is this acquisition a good fit for our overall strategy and the corporate culture of our organization."