From
the Preface
Charles Schwab continues
to revitalize what he finds inadequate.
In the beginning,
when investors were at the mercy of stockbrokers, financial self-determination,
like airplane travel, was reserved for the well-off. Charles Schwab liberated
personal finance and we are all better off for it.
From the beginning,
Chuck Schwab committed his company to treating customers not as resources
to be exploited but relationships to be nourished. In the history of American
business, this makes Schwab a revolutionary.
In some ways Charles
Schwab is an improbable revolutionary. With his silver hair, tanned good
looks, Rockefeller Republican ideology, and, until recently, those distinctive
horned rim glasses, Schwab appears as a fat cat banker straight out of
central casting. But few executives have so radically changed the relationship
millions of ordinary people have with their money.
In three decades,
Charles Schwab has emerged as one of the most successful and inspiring
financial services organizations in history. Thanks primarily to the values
and leadership of its founder, Schwab has a evolved a distinctive management
mindset that encourages the company to question its most cherished assumptions
and thereby avoid the arrogance that hardens the arteries of other companies
that are occasionally kissed by success.
From the very beginning,
Charles Schwab has put himself squarely in the bulls-eye of this journey.
What is in the company’s
DNA that has allowed it to succeed in so many harsh environments? What
permitted a discount brokerage to think success would come from slashing
prices by 60 percent to enter the uncertain world of electronic trading?
What made it think the World Wide Web would be a friend and not a foe?
The company pivots
freely around a set of three core values that define the company. Everything
else can change, but these values endure:
Create a Cause,
Not a Business. “We are guardians of our customers' financial
dreams.” Think about that. When was the last time you saw a business
take itself that seriously? It shows. Schwab people act as if they are
curing cancer.
It’s easier
to find the courage to abandon the practices that have been making you
rich when everyone shares a transcendent purpose. The values serve as
a safety net for the high-wire act. It provides cover for anyone poised
to discard a familiar but tattered business model for a lustrous but untested
business proposition. Schwab welcomes questions elsewhere considered subversive:
Who are we serving by this decision? Will my skills and my relationships
be as valuable in this new world as they were in the old? How much will
I be asked to unlearn?
These are genuine,
heartfelt questions that can't be answered in advance. The courage to
leave some of oneself behind and strike off for parts unknown comes not
from some banal assurance that change is good but from a devotion to a
wholly worthwhile cause. That cause is embodied in three principles:
The Power of Culture,
Done Right. Lots of companies pay lip service to a culture of ethics
and values. Enron had a very impressive ethics manual, copies of which
are now available on eBay. Schwab people actually live it, for they know
that a corporate vision may come and go, but the values stay put.
In a world that blurs
the distinctions between customers and suppliers and competitors and partners,
values are the only thing that defines where Schwab, the company, starts
and where it ends. Everything else can recede, the products, the services,
the industry itself. But an abiding culture can serve as the custodian
of dreams for the team.
This book is about
the people who helped articulate the values of the leaders and then created
the vehicles that embedded the values into the culture of the company.
Welcome Upheaval.
Everybody talks about the power of new ideas. Until a new idea actually
requires them to change their behavior. Then stability suddenly looks
attractive. How on earth did Schwab find the chutzpah to migrate its business
to the Web, knowing that the move would force it to cut by more than half
prices on its bread-and-butter service? Culture. People up and down the
organization who agreed on little else agreed on the value of putting
the customer first.
Even the high tech
meltdown has failed to humble Schwab. Although Schwab has had to take
its share of job cuts, the company’s exceptionally strong relationships
with its customers sustain it. And although Charles Schwab himself is
in the twilight of his career - and the book will examine the implications
of his eventual retirement - for the present he remains at the center
of the company that bears his name.
Silver-haired
chief executives, it turns out, are not nearly as irrelevant as
the annoyingly smug dot-comers who so exuberantly heralded their
extinction. But Charles Schwab - the man and his company - are
still with us, going strong, venturing with confidence into uncharted
territory
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