InformationWeek
Defining The Business Value Of Technology
June 19, 2000
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Schwab Integrates Bricks And Clicks
Judith N. Mottl
| TechEncyclopedia |
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hile pure-play dot-com brokerages such as E-Trade Securities Inc. and Ameritrade Inc. view online financial services as transactions conducted over the Internet, Charles Schwab & Co. and other brick-and-mortar financial institutions see these services as a series of relationships. This is one of the conclusions drawn in the book Clicks And Mortar: Passion Driven Growth In An Internet Driven World, by Terry Pearce, founder of consulting company Leadership Communication and a former IBM executive, and Schwab president and co-CEO David Pottruck."Schwab has seamlessly integrated the Internet with the rest of the way in which it delivers services," says Pearce. "The Internet for Schwab is a tool to supplement its ability to build the customer relationship."
By using Charles Schwab-one of the classic brick-and-mortar online success stories-as its primary case study, the book takes a look at how the Internet is changing the way companies conduct business. Pearce and Pottruck alternate as narrators throughout the book, writing on three main topics: building and sustaining a company culture, practicing inspirational leadership, and modifying business practices as new technologies emerge.
One of the most engaging chapters is a roundtable discussion by eight leaders from business and academia. In a virtual meeting, Microsoft president and CEO Steve Ballmer; Novell CEO Eric Schmidt; former Hewlett-Packard chairman and CEO Lew Platt; Ann Winblad of Hummer Winblad Venture Partners; Tom Gerrity, former dean of the University of Pennsylvania's Wharton School; Condolezza Rice, former provost of Stanford University; former Intuit CEO Bill Harris; and Texas A&M University professor Leonard Berry share business anecdotes and personal experiences of how technology is affecting lives and business strategies. The group discussion speaks to the need for an explicit value system within a company culture, the fragmentation inherent in a virtual company, and how the Internet is pulling the customer closer to the product.
It's a timely book, given today's dot-com crash-and-burn reports. Pearce says the recent market shakeout is a direct result of pure plays confusing brand-building with name recognition. "These companies spent their go-public money on advertising to get the name recognition instead of putting it into infrastructure and people," Pearce says. "The main reason Charles Schwab achieved online dominance is that it's always put the customer first, and it's used technology to effectively strengthen that commitment.''
Poor E-retailing attempts-or, in many cases, the lack of an online strategy-prove that many executives on the corporate front lines don't get it, Pearce says. "These companies are run by people who have certain ideas about what retailing is," he says. "What has been very difficult for them is to say, 'Oh, I see this thing is fundamentally going to change the way I do business.'"
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