Management case analysis and session project

Charles Merrill: Visionary, Leader, And Wall Street Revolutionary

Charles Merrill, the co-founder of the Wall Street brokerage firm Merrill-Lynch, influenced his company's strategy, and the future of the securities industry as a whole, by his leadership: through offering new Wall Street investment alternatives to average individuals. Specifically, Charles Merrill was first to make possible, (and, with the information he provided, understandable) ways for individual investors to enter the American stock market, a venue previously available to, and understood by, only rich investors or corporations. Merrill "paved the way for the investor class," not just by making the stock market accessible to average Americans, but by offering, again through his company, related services, such as "How to Invest" articles, ads, and seminars aimed at demystifying the stock market for average individuals. As a consequence, not only did Charles Merrill open up Wall Street trading to the average individual: knowing that an average person typically fears the unknown, Merrill made information on investing readily available.

I believe that perhaps the best way to characterize what type of leader Charles Merrill was would be to call him a rare combination of a pragmatist, a visionary, and a revolutionary. First, Merrill was a pragmatist because he realized that average investors, knowing nothing about Wall Street and considering it a venue for experienced, moneyed investors only, would have to be methodically sold on the idea of investing in Wall Street. Consequently, Merrill went about this step-by-step, with a well-planned, well-orchestrated, and very accessible ad campaign, to introduce Wall Street to the average investor. That was the Merrill the pragmatist leader; however, there was a great deal more to Charles Merrill than that.

Second, Merrill was a visionary. There are many kinds of leaders, in industry and in all walks of life, but only a few of these may be rightfully called visionaries. In my opinion, however, Charles Merrill is deserving of that name. According to Cohen (2003):

vision is an all-encompassing picture of the way you want an organization to look in the future. Without a vision, your organization is almost helpless. It can't get "there" until it knows where "there" is. Without a vision, you'll never get "there" and neither will your organization. As a leader, defining that "there" is one of your most important responsibilities... A leader's vision can be so strong that it can continue long after the leader himself is gone.

Third, Charles Merrill was a revolutionary, who changed the way an entire industry did business. Charles Merrill has an overall vision, a revolutionary one at that, of democratizing Wall Street for the average American investor. This, however, was not just a vague, overall vision, but instead a logical, detailed, and methodical plan to actually make it happen. Perhaps from his own humble origins, and perhaps from having "been there" himself, and risen to the investor class from nowhere, Charles Merrill was thus able to enter into the mindset of the average, American would-be Wall Street investor. From that perspective, then, Merrill was able to sell such a person on the idea of stock market investing.

Like a good journalist (indeed, writing and making available informative articles was a key portion of Merrill's marketing plan), Merrill answered, for average Americans everywhere, the "who; what; where; when; and why" of investing, so that those who had never before even thought of investing could become comfortable with the idea. As a result: "In 1940, just 16% of Americans invested in stocks. Now over 50% do -- thanks to the explosion of 401(k) plans, the wide availability of mutual funds, lower trading costs, and accessible research." would call Charles Merrill a leader rather than a manager, although it is likely that he was a strong manager of his organization as well. But he was a leader because he led his industry in a whole new direction, and changed that industry permanently in the process. According to Leadership vs. management (April 14, 2004), Charles Merrill was not just a leader of an organization; he was a leader of change within his entire industry:

www.1000ventures.comLeadership is about getting people to abandon their old habits and achieve new things, and therefore largely about change - about inspiring, helping, and sometimes enforcing change in people. "While there can be effective management absent ideas, there can be no true leadership.

I believe that Charles Merrill was a leader, rather than just a manager, because at the same time he was changing the minds of typical Americans, about the efficacy of their becoming individual Wall Street investors, he was changing the orientation of his own organization, to be of service to those average investors once they decided to invest. Once Merrill decided to reach out beyond the usual Wall Street investor to others not yet in the market, he had to change everything about the way he did business, if he hoped not only to attract, but to then retain those new investors as clients. Like Jack Welch at GE, Charles Merrill created an investing revolution at Merrill Lynch, and to create and sustain a revolution within industry, one must be not just a manager, but a leader. For example, according to Leadership vs. management (April 14, 2004):