| BUSINESSWEEK ONLINE : SEPTEMBER 27, 1999 ISSUE | |||||||||||||||||||||||||||||
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| COVER STORY -- E.BIZ -- THE E.BIZ 25
David S. Pottruck
Pottruck's track record is proof that by moving aggressively, established companies can transfer their successes quickly from terra firma to cyberspace. As of June 30, Schwab had 2.8 million online accounts, up from 1.8 million a year ago. It has an impressive 25% share of average daily trades, according to U.S. Bancorp Piper Jaffray. Dean P. Eberling, managing director at investment bank Putnam, Lovell, de Guardiola & Thornton Inc., says Pottruck sets an outstanding example for others: ''He took an existing business and turned the battleship around.'' BROAD AMBITIONS. Now Pottruck is teaching a whole new set of lessons--about how companies can thrive by melding the worlds of Net and non-Net. His so-called ''clicks and mortar'' strategy: To marry Net-based trading and customer service with Schwab's call centers and network of 300 retail branches. Staffers in the branches, for instance, can teach computer novices face-to-face how to navigate Schwab's Web site. ''We want to combine the best of the physical world with the best of technology,'' Pottruck says. A former college wrestler and football player, the 51-year-old Brooklyn (N.Y.) native's ambitions are as broad as his shoulders. While Chairman and co-CEO Charles R. Schwab sets the overall tone and direction of the company, Pottruck oversees day-to-day operations and comes up with strategies of his own. It was Pottruck who turned Schwab's online business from a sideline into the very soul of the company. That was surprising, since he didn't start using a PC himself until 1995. But itching to become more efficient at work, he had a machine put on his desk. In no time, Pottruck was hooked--shooting around e-mail and pulling up spreadsheets like a veteran techie. ''The Internet was starting to blossom in 1995, so my timing was good,'' says Pottruck. Pottruck wisely set up a separate online unit--a startup-style operation with its own building, hiring plans, and power to make decisions fast. Its mandate: develop the technology and marketing needed for a full online push. The unit introduced trading over the Net in April, 1996--beating all of the established Wall Street companies. Later, he folded the online unit into the company after it had accomplished its goals. Now Pottruck is turning up the dial on his clicks-and-mortar strategy. He believes that the vast majority of Schwab customers can digest information independently, but ultimately, many want a human sounding-board for their investment ideas. To help, he's installing PC kiosks in Schwab's branches. That way, customers can check their accounts, make a trade, or get help from a service rep on the spot. Pottruck faces plenty of challenges. Schwab's $29.95 trades are far from the cheapest--Ameritrade Inc. charges just $8 per trade. So he's got to convince customers that his services are worth the premium price. In part because heavy customer traffic on Schwab's Web site occasionally slows down service, he's spending big to beef up computer systems--$324 million, or about 11.8% of revenue last year. ''The process of building better technology is just beginning,'' Pottruck says. And if growth on the Net keeps going, this late-blooming techie is just getting started, too. By Louise Lee _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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