NPS Blog

The turnaround of Charles Schwab

Posted on January 21, 2012 by Fred Reichheld

We talk and write a lot about the economic benefits of Net Promoter. But in the newest video in our Behind the Quiet Revolution series, we talk about something more: how Net Promoter can help build, or restore, a personal legacy.

In 2004, Charles Schwab Corporation was in such bad shape that the board asked its recently retired founder, Chuck Schwab, to return as CEO. He came back to a company that wasn’t just in financial trouble, but one that he felt was treating clients poorly.

Chuck Schwab had always tried to make a focus on clients part of the company’s DNA, and in December 2005, I was asked to talk to 600 of the company’s leaders. Shortly afterwards, the company put the Net Promoter framework at the core of its change efforts and began a massive—and ultimately successful—turnaround, which we describe in detail in The Ultimate Question 2.0.

Yes, there were economic benefits. By 2008, Schwab’s stock had tripled. But I like this story because of what it means to Chuck Schwab. As I note in our new video, when your name is on the door, Net Promoter becomes a scorecard for your personal legacy.

Walt Bettinger, Chuck’s hand-picked successor, carries on that legacy as CEO today. NPS is the first screen he looks at every day, and he uses Net Promoter as a litmus test of how well the firm is living up to the values that Chuck put in place.

I hope you’ll check out the new video. It’s a reminder that Net Promoter isn’t just about economic benefits. It is also about enriching lives and building reputations.