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Charles Schwab
Book

Charles Schwab

How One Company Beat Wall Street and Reinvented the Brokerage Industry

John Kador
Wiley, 2002
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Editorial Rating

7

Qualities

  • Background
  • Engaging
  • Inspiring

Recommendation

Business writer John Kador describes the evolution of Charles Schwab & Company, a former discount brokerage blessed with the ability to transform itself through four different incarnations. Kador emphasizes Schwab’s commitment to integrity and customer service, a code that enabled it to prevail despite upheavals and threats. While the book focuses on the company, the running portrait of Chuck Schwab gives it a personal core. Kador highlights Schwab’s concern with exercising his values and leading a highly principled business amid an often shady industry he saw as corrupted by greed. Kador’s engaging narrative style is designed to inform and entertain general investors, executives and managers. At times, the discussion of Chuck Schwab and his company sounds almost too laudatory, as if the book is an in-house publicity piece. getAbstract.com recommends that readers should take all that sugar with a grain of salt, given this otherwise compelling dish.

Summary

Four Upheavals

Charles Schwab & Company began as a pure discount brokerage and evolved through four major upheavals to become the company it is today. A firm foundation of core values enables the organization to be flexible and to reinvent itself. Founder Charles R. Schwab imbued the company with these values from the outset. Due to his influence, values-driven management that puts the customer first has always anchored the company. To serve the average, individual investor, all employees must agree to these basic values:

  • No conflict of interest - Schwab employees receive salaries not sales commissions.
  • No advice - Schwab views customers as knowledgeable traders, so Schwab employees will not recommend individual securities.
  • No sales - Schwab will not promote individual products or sell proprietary products.
  • Customers first - The firm focuses on identifying what customers want and then determining if it can meet that need at a profit. Schwab’s ideal is to empower the customer and work from "the customer in," not outward from existing processes.

In turn, the company’s standards are based on these values. Its key standards...

About the Author

John Kador is the author of four books, including the business bestseller Net Ready: Strategies for Success in the E-conomy (with Amir Hartman and John Sifonis). He is also a freelance writer for a number of business publications, and he has written for CEOs, including Charles B. Wang, Chairman of Computer Associates International, Inc.

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