Smart Steps

Michael Bloomberg

Founder and CEO
Bloomberg LP
New York, New York

I've learned that change is always evolutionary and is virtually never revolutionary. There are no simple solutions to complex problems. The fashion of the times changes day in and day out: Everyone has invented the perpetual-motion machine, everyone has a get-rich-quick scheme, and everyone says that they're going to revolutionize the world with a little piece of software. The press writes about such things because they're interesting. And the public would like to believe that you can get something for nothing -- but that's just not the case.

Product matters. Marketing is useful, but you must have the best product out there. And that product is not technology; it's not data, it's not anything physical -- it's service. Our customers don't care about what their suppliers sell, they only care about what we have that can help them. Our focus has always been to explain how we can improve their lives -- make them more efficient, more pleasurable -- as opposed to selling what we produce.

I don't think there is a new economy. I think there are new tools for the economy. The basics of commerce remain: You've got to have something that people need, something that they can't get elsewhere. And the more they can't get it elsewhere, the more they need it. Adam Smith said it all: With a small supply and a big demand, you have a business. Everything else we do is along that continuum.

Michael Bloomberg (mike_bloomberg@bloomberg.net) is the founder and CEO of Bloomberg LP, a financial-news service that provides users with 24-hour, real-time business news, market data, and analysis through over 140,000 proprietary terminals. The company also publishes books and magazines, runs a TV and radio station, and manages a syndicated news service. Bloomberg previously appeared in FC 1, November 1995 ("The House That Bloomberg Built").

Dawn Gould Lepore

Vice chairman and chief information officer
Charles Schwab Corp.
San Francisco, California

It's about customers and profitability, stupid. Both are nonnegotiable, even in the new economy. It's a lesson that everyone needs to learn and relearn. What's good for your customer is good for your business.

During Schwab's early foray onto the Web, we made some wrong assumptions about customers. We thought that customers with online accounts only wanted to deal with us electronically. Our mistake was thinking that customers wanted to choose between people and technology -- or that they would be willing to make that choice. We quickly learned that they wanted both. Since then, the click-and-mortar approach has become the Rock of Gibraltar of our strategy.

In the end, a customer-centric culture sustains itself during times of great change. What we must have -- and I do mean "must" -- is a core competence in reinventing ourselves as the needs of our customers change with the marketplace. We can't make assumptions anymore. The velocity of change in today's economy requires a steady commitment to your fundamental values. If you don't have something that your employees can hold on to, everything is up for grabs and people lose their way. We constantly tell our employees, here's what's changing -- and there's always something changing -- and here's what isn't changing: who we are and what we stand for. Without exception, the lesson always comes back to delivering on our customer promise.

Dawn Gould Lepore (dawn.lepore@schwab.com) is responsible for Charles Schwab's worldwide information technology and has been a leader in the expansion and redesign of the company's information systems. She joined Schwab in 1983. Lepore previously appeared in FC 22, February 1999 ("Balancing Acts").

Joe Liemandt

Founder, president, and CEO
Trilogy
Austin, Texas

Since 1995, we've grown from fewer than 200 people to more than 1,300. We've faced the serious challenge of weeding out those who were energized more by the idea of a quick public offering than by our built-to-last philosophy. Our success is the direct result of sticking to our core values: great people, great technology, customer success, and integrity. I've learned that it's more important to hire people who stand behind your core values than it is to feed a growth rate with people who don't share those values.

When Trilogy comprised a mere 40 people, we were like most startups. We simply hired driven people who were great executors; we didn't have the time or the resources for large teams. Throughout the high-tech industry, but particularly at small companies, structure and leadership have been euphemisms for bureaucracy. And bureaucracy stifles both creativity and innovation. As Trilogy grew, one of the most important lessons we learned is that hiring for raw talent isn't enough. We had to build leaders. I believe that you should always work to replace yourself. Teach your leaders that their main priority is to energize and grow their team around themselves.