E*TRADE CIO Amy Radin Tells Us What She Really Thinks

Amy Radin—who became one of America’s first CIOs when Citigroup appointed her to the role in 2005—sits down with Andy Comer and Dan Heasman to talk about her mission as an innovator, the behaviors she values from her peers, and why “culture eats strategy for lunch.”
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Andy Comer: What are the biggest myths about innovation—and how does a CIO dismantle them?

Amy Radin: Even really talented, highly skilled people may not realize how hard it is, and that there's actually process and discipline behind it. They tend to confuse innovation with creativity. I always say it's one of the most used and abused words in business: Everybody wants to be “innovative,” so they say. When it comes down to it, innovation is about driving change. There is real process. To me, innovation comes from having unique insights into people's needs, even the needs they can't necessarily tell you they have, and helping them with those needs in ways that create business value. I think the myths may arise from misunderstandings on pretty much every aspect of the process.

Also, sometimes people think that innovation comes from the lone genius. Steve Jobs was clearly a very unique person. Almost one-of-a-kind. But I think innovation can come from mere mortals—from diverse groups of people who can collaborate together and build on each other's thoughts.

Andy Comer: How would you describe your mission as CIO of E*TRADE?

Amy Radin: My mission is really to drive the growth of our business through innovation. That's what I'm here to do. There are three things I focus on. I call them “the three Cs”—concepts, capabilities, and culture.

We get insights from people who we think would be great customers about what's going on with them and their money, and translate those insights into concepts that have the potential to become business opportunities. Then our goal is to get the very best concepts to pilots.

And as we're advancing these concepts, we're establishing process for how you actually develop and take the concepts forward. And capabilities and culture are what you need to get concepts to happen.

An example of capability: We set up, with an outside vendor, a private community of several hundred people who represent the kind of people we'd like to be doing business with. And we have started discussions within this community about all kinds of things. Everything from, "What do you think of this idea?" to "What if we were the Weight Watchers of financial services?" to "What do you think about Occupy Wall Street?" It’s very freeing, as opposed to traditional research, because you're not locked in. You can do it 24/7, and it's basically a fixed cost.

And onto culture.

E*TRADE has a tremendous history of innovation which we are focused on strengthening. I mean, we were the company that said, "You don't need a broker to trade." That was nearly 20 years ago. And we’re about to launch something called “Innovation Unleashed,” an internal innovation challenge; kind of a competition. We're encouraging employees—either individually or in teams (although we're really trying to say to people that team is better)—to submit proposals for ideas that they think represent opportunities for E*TRADE.

We’ve created a specific challenge around a specific topic. We are giving people a pack of insights, both primary/qualitative and secondary/survey data, so they don't have to spend time doing research. And we’re creating something called “The Big Idea Canvas.” It's basically a one-page plan template for a simple, straightforward business plan. Innovation Unleashed is not about big PowerPoints. It's about quality of thought and encouraging employee contribution.

And the recognition…It's interesting. We talked a lot to employees about what kind of recognition would matter. Tangible awards were important. So winners will receive a tangible award, like an iPad, and be recognized in a company-wide celebration. But what's really the most exciting thing is that we are going to recognize the winning idea by bringing the winning team together with a design firm to fund a workshop that will develop visualizations to bring the idea to life. Next we’ll put the idea into our Co-Creation Lab and engage with Lab participants to assess and build upon the team’s work. So we’ll actually invest in helping to advance the ideas.

Andy Comer: It sounds like organizational culture sits near the top of your agenda.

Amy Radin: It has to. You know, I really learned this the hard way. Whether by title or just as a function of what's at my desk, I've been in roles involving transformation for most of my career. And I have learned that, as our HR head always says, "Culture eats strategy for lunch."

Dan Heasman: The challenge we have is in trying to help leaders understand that, too. What have your experiences been around aligning your peer group to this understanding?

Amy Radin: That's probably the biggest challenge, by the way, faced by anyone in this type of role. When I was at Citi, my friends used to ask, "What's it like there?" Because I wouldn't seem like the person you'd expect to be at a place like Citi and having a good time. I used to say, "Well, you know, it's not the popular vote that’s a challenge; it's the electoral college I worry about."

When you go into the middle and junior levels of a large organization, people fairly readily associate growing their careers, and being part of something that's successful, with developing new ideas into business opportunities. And they get digital, and mobile, and social. So many people are pretty easy to get onboard—or at least tend to not be blockers.

At the senior executive levels it can be more challenging. I don't know if it's that people feel they have more to lose or they feel the burden of near-term P&L pressure more. Reality is, they carry the responsibility for the enterprise’s success—for ensuring full regulatory compliance, delivering on Board expectations, and other demands that are especially challenging in the current environment. And that may not be felt deeper into the organization. So, it just seems that the more senior you go, the more pressure there is to adhere to what is known. It feels safer. People just aren't always willing to make the leap.

So I think that the most important thing is to show results, even if they're milestones, versus direct bottom-line impact, which is almost impossible in the early stages of developing a concept into a business. Progress that people in the organization can relate to and see. The best result is you get something to market and you prove you can make money. Second best is to demonstrate progress by milestones. So say what you're going to do, do it, and then go back and tell people that you did it.

So it's results. It's showing milestone progress. It's leadership. It's showing you're serious about your intent. It's being inclusive.

Dan Heasman: If you had to identify one action or behavior that you want from your peer group, what would it be?

Amy Radin: I would say my answer has two parts: Tell me what you really think, and, let’s have an active dialogue so we bring our best thinking together.

Dan Heasman: That's what you want the most from them?

Amy Radin: Yeah. And that is difficult to achieve in most organizations, especially consistently. It's really important to be present; you've got to put it out on the table and have the dialogue. Really collaborate.

And then it’s about trying to get people to reframe their thinking. I work with very talented people who all have 20 or 25 years of financial services expertise. Getting people to set that aside and say, "In 2011, given that the average savings of the average 50-year-old in America is only $2,500, we probably could help people think differently about what it means to prepare for retirement." People are more afraid in this country about losing their money than they are about dying. This can be turned into an opportunity. But when you come in and challenge an organization and say, "This is a different way to do it," you’ve got to be careful that people don’t interpret what you are saying as “what’s going on now is bad.” If you’ve been successful for a long time doing things a certain way, it can be hard to have people come along and say, “We have to try something potentially very different.” Plus, if the current approach is driving business results, you certainly don’t want to hurt those results. It's very emotional. It’s the “innovator’s dilemma.”

And that's when I say to people, "Well, ignorance can be a tremendous advantage." Or, "Never confuse your knowledge of the industry with an understanding of what people really want." But it is really hard. I know there are times when the work my team is driving may get discounted. When I came here, people went, "Well, you may think you're financial services, but you're really just a credit card person." I went to Citi, in the credit card business, and people said, "Well, you're from American Express. That's not really a credit card company. We're a real credit card company." So people will discount outsiders, when in fact outsiders can bring a fresh perspective and accelerate a team’s ability to reframe.

But I think innovation really comes from a diverse group of people collaborating together—all kinds of diversity. When you talk to people in the industry about, say, retirement, they're going to say, "IRAs, 401(k)s, asset allocation models, and financial plans." You talk to a normal human being about retirement and they're going to say, "Oh my God, I'm really scared that I'm going to run out of money.“ Or, “What if I have a big healthcare expense? What am I going to do?" It's getting people to reframe. And some people just respect the value of outside expertise and get it. And the people who don't, I don't know if you can ever win them over. But if you have to, try to get to the bottom of the resistance, and try to help them see that innovation has to be part of the equation for a business to thrive. Show them how their success can be linked to it.

Dan Heasman: Agreed.

Amy Radin: Then it comes to talent and leadership. It has to start with who is at the top of the house.

Dan Heasman: Have you found challenges in getting credibility? I mean, the CIO role is a fairly new one.

Amy Radin: Yes. I think the value of this kind of role is that it sends a signal to the organization that it's something that's of great importance to the CEO. Secondly, it’s unusual in the corporate world today to find a person who can dedicate enough mindshare, doing this kind of work while they're under the day-to-day pressure. And I also think…I haven't run across a scientific study, but my bet is that most of the people who are in P&L roles today are there because they have a specific set of skills—they know how to deliver the numbers in the plan.

And to drive this kind of work, you need a different kind of wiring. So even if you have the mindshare, are you a hybrid thinker? Do you have that sort of left-brain/right-brain wiring?

On the negative side, it's a corporate function. The power in corporations tends to sit with people who own the P&L. So you often feel like the little engine that could. That's how my team feels a lot. Honestly, if I were going to structure this from a blank sheet of paper, I'm not sure I'd make it a standalone role.

At Citi Cards, I had authority and resources because along with the innovation responsibility, I led a team that was driving very clear short-term results, and building our first innovation skunkworks. I could say, "Online, we booked two million new accounts this year. We serviced 11 million people through accounts online." In some companies, it's a function that the CMO takes on.

If I could rewrite the script for myself, I'd write it a little differently. But there are positives.

Andy Comer: Is there, in your mind, a defining attribute or set of attributes that makes a successful CIO?

Amy Radin: I think you have to be right-brained and left-brained. You have to really value diversity and believe in collaboration. I don't view myself as the “big idea” person. I'm an intuitive thinker, and I guess I'm a good pattern person, so I see patterns. But a lot of what I try to do is to make space to bring different kinds of people together. I like trying things.

It's more creating the environment and making it fun for people, making people feel like they can actually get something exciting and new to happen. You have to be open to trying things.

Andy Comer: Does every company need a CIO?

Amy Radin: I’m glad you asked that question. Every company needs to dedicate resources and mindshare to staying relevant and fresh in the market, and that requires the right structure and talent. How that translates into roles will vary, and won’t always mean there should be a CIO. To me, if you're running a business, ideally you are expected to deliver the short-term and the long-term. But P&L management in many companies today…It's not even just make the quarter, it's: How did it go this month, or this week? I mean, everyone is looking at daily results, which are certainly important, but are only points in time. So maybe if people running businesses were held truly accountable to both, and could give innovation the mindshare and resources, you wouldn't really need the separate role. But that may be an idealistic view.

Dan Heasman: Would you say that one of the reasons you're there is to help with the tension between hitting short-term business requirements and building a long-term future?

Amy Radin: It's to make space to really make sure there is sufficient focus on the long-term.

Dan Heasman: Are you effectively the long-term champion?

Amy Radin: Not solely. Certainly it’s a big focus of our CEO. And we are investing in projects around the Company that will create value over time. But I'm throwing some additional gasoline on the long-term, and making sure that the organization is investing some resources in stuff that is going to have a higher chance of failure, but could be potentially bigger and more disruptive. It's the stuff that, through the lens of day-to-day P&L management, would be hard to justify.

Dan Heasman: Do you have different models or infrastructures to manage the day-to-day versus the future?

Amy Radin: Oh, totally. I think that's a big piece of success in innovation. Applying traditional process is generally wrong. If you are trading securities online, even a millisecond of difference can affect what you earn. So it's all about the platform and service. People here are appropriately very focused on platform performance and delivering exceptional customer service. And in this industry, the consequences of any regulatory errors could be severe.

So what that leads to is when new ideas come along, the tendency is to build the industrial-strength solution, and then launch a beta, and roll it out to maybe a thousand people at a time and see what happens. When it comes to disruptive innovation, however, what we really should be doing is iterating and moving very, very quickly to market with pilots. We don't invest in the full system until we get some proof of concept.

That's a very different mindset and process. Some challenges we face include: How can we iterate quickly through different versions and still be compliant? We operate in a highly regulated industry business where we’re dealing with people’s investments and their trust. Taking that into account, how can we adopt a process that allows you to be fast and iterative versus one-size-fits-all and industrial strength? We’re still working on that.

We're trying different things. But it's an entirely different process. Whether it's how you're actually developing and presenting things or how consumers react, you can't be stuck in old processes.


The Innovator’s Toolkit: Amy Radin

The websites I visit every day: “Well, every day I go to our private community, called Reimagining Money. And I love TED. I sit at my desk and get a dose of inspiration from somebody who reminds me that I'm on the right track. I like Trendwatching.com. And there's a group online called Innovation Excellence. There's good discussion there. But nothing beats being in contact with other people who are likeminded. Dialogue/idea sharing with other innovators is very, very important for me.”

The innovation conferences that really matter: “I think most of them are really terrible. But in addition to TED, there’s a company in New York called Creative Good that runs a conference called Gel. That's a very good conference. What I prefer to do is come together with small groups of people who are doing what I'm doing.”

The last book I read: “Steve Jobs's biography. I really enjoyed that, although he's not my role model. And I'm in the middle of the third of the Stieg Larsson novels. I can't put those down. They must do something to the neural pathways in my brain.”

What inspires me: “Listening to people; that's where I get a lot of my ideas.”

FROM the greenhouse