Bloomberg recently published an article about how algorithms and artificial intelligence will lead to widespread pink slips on Wall Street. If my LinkedIn newsfeed was any indication, you’d think that Bloomberg had posted this excerpt from Chuck Palahniuk’s Fight Club: "You are not a beautiful and unique snowflake. You are the same decaying organic matter as everyone, and we are all part of the same compost pile." This type of nihilistic interpretation of the article fails to acknowledge the massive opportunity presented by a restructuring on the Street.
In order to be a part of investment management’s future, you must be a part of the changes that will help your firm usher in progress. That requires bold leadership.
David Pottruck, the former CEO of Charles Schwab, recently discussed the topic of leadership as the keynote speaker at the WealthManagement.com Executive Forum. You may recall that Mr. Pottruck was eviscerated across the industry for slashing Schwab’s trading commissions due to the resulting hit to the company’s share price and revenue. Soon thereafter, however, trading volume soared and profits doubled, and Pottruck was named CEO of the year by Morningstar.
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Pottruck’s legacy at Schwab extends beyond the growth of client assets from $25 billion in 1992, when he was named president, to the $1 trillion at the time of his departure in 2004, however impressive. He also discovered how tiny RIAs were using Schwab’s platform to service their client relationships. In response, he championed the RIA servicing business, with the firm now supporting over 7,000 independent advisors.
Of course, the results of bold leadership do not always move up and to the right in a linear manner. Pottruck was unexpectedly ousted in 2004 as a result of spillover from the dot-com crash, which resulted in both slumping revenue and employee morale - the latter in congruence with steep layoffs.
What I found remarkable about Pottruck was his authenticity. He called balls and strikes when looking back on his own performance at Schwab. This type of honest reflection seems to have helped him flourish in his subsequent endeavors, which includes his current role as Chairman of HighTower. His latest book, Stacking the Deck: How to Lead Breakthrough Change Against Any Odds, recounts many of his successes and failures, and details his 9-step guide for “inspiring meaningful, lasting change across an organization.”
In his book, Pottruck identifies the "fear responses" that often accompany change. I doubt he would have found it unusual, then, to have observed such visceral responses on LinkedIn to the aforementioned Bloomberg article. But change is inevitable. You may not be a beautiful and unique snowflake, but if you want to be a leader in our industry, you need to see past these reactionary emotions to the real story: opportunity.