CRA Inc

14 Dec 03 @ 11:40 am

Internal Communication At Charles Schwab

Charles Schwab co-CEO David Pottruck, interviewed in the current issue of Context Magazine, offers useful insights about internal communication.

Pottruck on matching actions to rhetoric (what we call convincing decisions):

At Schwab, our vision is to be the most useful and ethical financial-services firm in the world. We don’t talk about that much outside the company. You’re not going to see that in an ad. But inside the company, for the past 15 years, that’s the language we’ve used. We also identified six values—being fair, empathetic, responsive, striving, trustworthy, and team-oriented—that guide all our decisions about products we develop, incentive systems we have, the way we serve our clients, the way we serve our employees.

When the current economic problems caused us to do our first round of layoffs, our values dictated that we treat employees generously. But we expected to do only one round. Now we’re doing our third. So we asked ourselves whether we could afford to continue being so generous. We decided the answer was that we had to keep our policies the same because it was the fair thing to do.

Pottruck on media richness, leadership visibility, and candor:

Modern technology—e-mail, voice mail, video clips, and all that—is fantastic, and you can accomplish a great deal with it. However, I think I have to earn the right to communicate with people through those means. I earn that right by appearing before them in public, personally, talking about where the company is going, talking about why we’re going in these directions, and then taking questions. Chuck [Schwab] and I last year did 11 face-to-face meetings, getting together with almost every employee in the company.

I’ve always tried to get questions started with a zinger. You know, one that goes something like: “Mr. Pottruck, we’ve all seen our compensation go down, and yet you and Mr. Schwab still earn millions of dollars annually. How do you justify that?” I respond something like this: “You know, that’s probably a question that’s on a lot of minds of people in this room, and I think that if we’re going to accomplish anything today we need the heartfelt questions like that one. So how about a big round of applause for that employee who had the courage to ask that question?”

Then you have to stand back and get ready because there are going to be a lot of tough questions.

People will appreciate that you didn’t duck the questions. Afterward, all the e-mails, voice mails, and other stuff will be more credible.

posted in category(s): Emerging Case Studies