May 2025 Charles M Schwab’s simple but powerful management approach, and how you can apply it in your business
Charles M Schwab was one of the world’s most successful business leaders during last century. He was paid an enormous amount of money each year to run US Steel Corporation and manage its thousands of employees by owner Andrew Carnegie. Schwab’s unique approach to understanding, connecting and inspiring his employees is still highly admired throughout the world today.
Here is a summary of Schwab’s approach.
He Avoided Criticism and Used Encouragement
Schwab believed the way to get the best out of people was through genuine encouragement. He didn’t focus on what people were doing wrong, instead, he looked for something, anything, they were doing right and praised that.
“I never criticize anyone. I believe in giving a man incentive to work. I am keen to praise but loath to find fault.”
“I can get more out of a man by appealing to his desire to do better than by giving him orders.”
This attitude made people want to give their best. They weren’t working out of fear, they were working because the felt valued and appreciated.
He Walked the Floor and Listened
Unlike distant, aloof executives, Schwab was present. He frequently walked through the mills and plants, chatting with workers – not about quotas, but about them.
He remembered names, he asked about families, he listened without judgement. This made workers feel like they mattered as people, not just tools for production.
Schwab said, “The man who does not know the heart of his workers cannot be their boss.”
Above all, Schwab was a believer in human potential. He approached his employees as people first, not tools.
Ask Instead of Tell
Schwab was interested in building self-esteem and confidence in his workers, so he would ask instead of barking orders all day. He asked questions that are designed to guide employees to think for themselves, such as:
- “What do you think needs to happen next on this job?”
- “How would you approach this if I wasn’t here?”
This subtle shift turns passive workers into active problem-solvers. You’re not just delegating tasks, you’re developing leaders.
He Set Clear Goals People Could Own
Rather than barking orders, Schwab believed in giving employees something to aim for – and then stepping back. When employees knew what completed jobs looked like, they could motivate themselves.
He’d say: “A man will go along with you if you just show him that you consider him a partner and not a cog in a wheel.”
Ownership creates energy. People stop feeling idle and start feeling like contributors.
He treated each worker as important and part of something bigger
Schwab wasn’t into command and control. He thought like an employee who wanted autonomy, respect, and purpose.
He explained why things mattered and asked for input. He made people feel like they were part of something bigger.
His leadership developed trust, loyalty, initiative and teamwork.
He would build friendly competition to enhance teamwork and productivity
Schwab would break down bigger goals into smaller ones and celebrate and acknowledge clear wins. He used competition to build identity, not tear people down. He enjoyed creating friendly competition between teams like the night shift and the day shift, but would do so in clever ways.
For example: Schwab visited a steel mill and asked the day shift how many heats (batches of steel) they produced, to which they answered “six”. Schwab then chalked a big “6” on the floor before he left.
When the night crew came in and saw it, they asked what it meant. Once they heard, they felt challenged and produced seven heats. The next day, the day shift upped it again.
Managing a team isn’t just about getting jobs done and making a profit. It’s about creating a culture where people feel proud to contribute, feel valued and inspired to stay. The Charles Schwab approach is a reminder that people thrive on encouragement, being respected, valued and important and understood.