Former Charles Schwab CEO David Pottruck's Breakthrough Change Into Right Work

He practiced brutal self-reflection and took responsibility for his mistakes. He learned from his experience and grew beyond his pain. Now he is rapidly becoming a significant thought leader and expert in the area of change itself. Today, Dave is contributing to business and life at a level far bigger than that of being CEO of one company.
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David Pottruck was a rock star of the business world. For over 20 years at Charles Schwab, he led teams that engineered the remarkable growth of the company in the 1980's and 90's. It was Pottruck and his teams who took Schwab from a $50 million dollar, unheralded, discount trading company to an innovative, five billion dollar megastar at the vanguard of America's technological revolution.

I knew David Pottruck during his time at Schwab. I was always inspired by his powerful leadership style. Schwab became an innovative leader for change and the company grew beyond most people's wildest expectations. I was never more shocked than when David Pottruck, after phenomenal success for over 20 years, was abruptly fired by the Schwab Board of Directors. It was a humiliating and very public event. Within minutes, the news was nationwide and carried everywhere.

Today, David Pottruck is definitely "back", with passionate work and the publication of his new book, Stacking the Deck: How to Lead Breakthrough Change Against Any Odds.

Pottruck now establishes himself as one of the leading experts on leading successful change in corporate America.

This was not just a fortunate or sudden re-emergence for Pottruck. It was the result of a decade long pursuit of his new right work.

Despite the lack of warning, Pottruck immediately took full responsibility for the outcome at Schwab and, as he has throughout his life, and found in what he describes as "his failure", the most important lessons he needed for his next success.

And that is why I wanted to interview Dave Pottruck.

In my work of consulting, recruiting, and helping companies find the right employees, who are in their right work, I have had the opportunity to meet some incredibly talented and creative people. They have taught me a lot about the process I described in my book, "Finding Right Work: Five Steps to a Life You Love."

Repeatedly I see that one of the biggest obstacles to people finding their right work is fear of failure. What if it doesn't work out? What if I fail?

Ironically, however, the careers of most truly successful and creative people are littered with dramatic failures. That is because people who are happy and successful in their careers have the courage to fail.

And they do....sometimes. But what they then do is use the lessons from those failures to create subsequent success.

But how does failure create success?

Failure can actually be an essential catalyst for positive change. It can trigger a deepening appreciation of who we really are and force us to look more deeply at our strengths and weaknesses. It is a process that demands deep reflection. There is nothing like the pain of failure to add depth and breadth to our self-reflection and expanded awareness.

Again and again, when I explore, in granular detail, the lives of the most successful people I have met, the pivotal role played by failure and hardship is so compelling that at this point in my career, I can unequivocally say that most successful people I know have developed a strong ability to take their experiences from adversity and failure and use them as a catalyst for creative breakthrough into heightened levels of success.

What I have seen is that failure both fertilizes and nourishes success. In fact, in many cases it is a prerequisite for success. Phoenix rises from the ashes. That is what is so rich about the Dave Pottruck story. His whole life story dramatically reflects the creative process of change that I have seen play out in so many careers. David Pottruck has never let fear of failure or self-doubt stop him from anything, well, maybe once, he says. But what is even more impressive, he has been brilliant at turning his failures into his next success.

In my recent interview with him, Dave said, "In some ways, I feel like my life is a string of failures that I have overcome and I have done some good things along the way."

Some good things, indeed!

David's performance as CEO of Charles Schwab was nothing less than sensational. He led breakthrough growth and change at the company. He was on four occasions selected as the national CEO of the year by prominent business journals. He was the poster boy for success in technology and innovation. He had a best-selling book that explained his formula for success.

And then one day it suddenly ended.

The recession hit Schwab, profits plummeted, and Pottruck, with no advanced warning, was very precipitously and very publicly fired.

End of story? Not quite.

What does one do when they have been at the top, the much celebrated CEO of Charles Schwab, and been let go?

Pottruck would be the last to deny the pain and embarrassment the dismissal caused him. But what is remarkable is how he handled it.

Within minutes of receiving the news, Pottruck accepted the decision, he addressed the Board and thanked them for the 20+ years of wonderful experience they had given him, and publically accepted responsibility for failing to downsize the corporation in response to the dramatically downward change.

Privately he suffered. In a poignant moment, he told me that the saving grace of the moment was that his longtime Chief of Staff, Colleen Bagan (she is still with him) when she heard the news as she was driving out of town on vacation, turned her family around, and came to support him immediately.

But as it had done throughout his life, adversity and failure simply pushed Dave to new heights. In our interview, Pottruck said, "The thing that let me deal with this was that it was not the first time I failed. I have failed many times. And I have had to pick up the pieces and go on. That's the only choice you have."

History reports people's great successes, but great people almost always also fail; but it is what they do with the failure that separates them from the rest of us. What great people do, better than anyone else, is turn their failures into that rarest and most precious of human commodities--Wisdom.

Underneath the pain of it all, David Pottruck was doing some very serious reflection about change, as he himself grew and changed.

Since leaving Schwab, for over a decade, David S. Pottruck has become Chairman of HighTower Advisors, a rapidly growing $35 billion dollar Wealth Management firm he helped launch in 2008. He also serves as Chairman of CorpU, a rapidly growing 21st century leadership training and development company. Dave serves on Intel Corporation's Board. He is a Senior Fellow and adjunct faculty at the distinguished Wharton Center for Leadership and Change Management. Pottruck has been passionately teaching his class, "Leading Bold Transformational Change" and refining the lessons learned from a brilliant career as President and CEO at Charles Schwab. He created and teaches what has become each year the most popular class at Wharton and has transformed himself into the new national guru on the nature of organizational change itself with the publication of Stacking the Deck.

Few now doubt the central role that change plays in the American culture and business world. Pottruck's book is indeed a breakthrough for the national consciousness about the complexities and psychological dimensions to change.

Pottruck's current "right work" illustrates one of the important things to keep in mind in finding right work. That the composition of right work will change over time as priorities shift and cycles change in our life.

I asked David if he would want to go back to being a CEO of another rapidly growing public company with all the guts and glory involved. Did he miss that "important" role and life?

"Yes", he said, "I miss it ...on some days". "Would I want now to go back to working 70 hours a week, 7 days a week? No! I mentor young CEOs whose job it is to work 70 hours a week. Now, I have grandchildren I care about. I love teaching and mentoring. My life is different now. My priorities have changed. I learned a lot from getting fired. Am I happy it happened so publicly? No! Was it horribly painful? Yes! I take full responsibility for what happened. I wasn't able to lead a company which needed downsizing. I didn't get the help I needed to do that. I learned a big lesson about myself and about change itself".

What David Pottruck has done now is to draw on the very experience that he believed led to his downfall-the management of change itself, and he has learned big lessons He admitted that his understanding of change had been flawed. He had successfully managed change alright. It was tremendously positive change for anyone involved with Charles Schwab while Pottruck was at the helm. The problem, according to Pottruck, was that he only knew how to manage positive change. He had been great at that. But Pottruck's own integrity and honest self-reflection let him see that there was more to change than he had understood at the time. There was also the need to manage a retreat as effectively as a charge.

Did fear of failure ever stop Dave Pottruck from succeeding?

Listening to Dave Pottruck now, it is hard to believe he would ever back down from anything. So when did Pottruck let fear stand in his way? It was way back in 1970 and he learned a lesson he would never forget.

An All Ivy linebacker from Penn, Pottruck was invited to a pro football tryout camp with the Miami Dolphins. He was great at football and would have loved to play in the NFL. He thought he would never be good enough to make the team and so never bothered to even attend the camp.

Earlier in the year Pottruck and Penn had played a preseason scrimmage against an even less prestigious football program at Amherst College. Like Penn with Pottruck, Amherst had its star linebacker, named Doug Swift. Swift was also invited to that same camp, but unlike Pottruck he not only attended the camp, he made the Dolphins starting team. He played for six years and appeared in two Super Bowl games for them.

It is one of the few times in his life, Dave Pottruck says he did not "show up." I didn't make that my goal and put everything into it, and Doug ended up with the Superbowl and I did not. I thought, 'Okay, I'm not got to let those things happen again.' Once again he learned from his "failure."

Where did Pottruck's new role as national sage and mentor extraordinaire come from? Many years ago, I was witness to a harbinger of Dave Pottruck's new role as wise sage.

I met Dave once during this time as CEO of Schwab and it made a lasting impression on me, although I have to admit I did not at the time appreciate that I was seeing an already great man, give a foreshadowing of what he was going to morph into when he outgrew Schwab. At the time, the notion of someone "outgrowing" such a corporate role was unfathomable to me.

Given my interest in community service, Rotary Club was a natural public service organization for me to join. My grandfather, father and uncle had been lifetime Rotarians. Every year we organized a week-long "Camp Enterprise" for high school juniors from the San Francisco Bay Area to learn about building a business.

Part of that outing consisted of presentations from prominent business and professional leaders located in the area. One of them was Schwab. While I had business contacts with Schwab, I did not expect the CEO, David Pottruck, to give up an afternoon to meet with 75 high school students. I was clearly wrong.

It was not simply that he came all the way out to the Marin County YMCA on a week day. There were two other things that were even more remarkable. One was that he clearly loved what he was doing that day. He came around to the front of the desk and sat on top of it so as to be closer to the kids. He stayed for several hours speaking to young people who had never had any contact with someone as prominent or successful as David Pottruck. He was humble and respectful of the students in a very real way.

Second, he did not talk to them that day about his successes, his Ivy League football and wrestling careers. He did not talk to them about the vast wealth he had created for Schwab and its stockholders. He did not talk about the famous people he could hang out with any time he wanted. Instead, he talked about his failures.

One of the biggest failures he talked about was that he had applied to 55 medical schools and that he had been rejected by all of them. He was devastated. He had failed. He picked himself up. He applied to business schools, and, as they say, "the rest is history".

What I saw that day was clearly a harbinger of things to come. Dave Pottruck took his adversity and used it to help himself grow into his new right work.

He practiced brutal self-reflection and took responsibility for his mistakes. He learned from his experience and grew beyond his pain. Now he is rapidly becoming a significant thought leader and expert in the area of change itself. Today, Dave is contributing to business and life at a level far bigger than that of being CEO of one company. He is influencing the lives of thousands of CEOs and leaders across the country.

We can all "stack the deck" in our favor by studying our failures. They carry the seeds of our future success. Just ask Dave Pottruck. Or Read his book!

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