Richard Fairbank, founder, chairman and CEO of Capital One, encouraged students last week to avoid jobs that sound seductive, but are really only a way to build their resume for the next stage. At a View From The Top talk on 10/16, he encouraged students to aim high. “Chase the dream,” even if the odds seem long. In life, he suggested, “the worst teacher is success. Failure is so much more valuable.”
This message echoes many past speakers in the series. George Roberts, who co-founded KKR, had similar advice, saying that fear of failure causes too many people to miss valuable opportunities. “We had some experience from some deals not working out,” he said. “We learned more from those, quite frankly, than we learned from our successes.” He also noted that “the system we have in this country does not penalize failures, as long as fail honorably. The system will give you a second and third and fourth change.”
Fairbank’s own story has a bit of both sides to this theme. Out of business school, he did take a job as a strategy consultant, which is often seen as a resume builder. Nevertheless, he said when he came to business school at Stanford, he knew that he would start a business. The only problem: he had “no business experience, no money, and no business idea.” He credits his time as a consultant as fundamental in his own development as an entrepreneur in the financial world, as it taught him to see industry patterns that he would eventually leverage to create Capital One.
So his experience as a consultant gave him a business idea–to bring something called information-based marketing to the credit card industry. You could also say it gave him some experience, but probably not enough to get the backing from financial industry incumbents who viewed his idea as radical and potentially destabilizing. He suggests that the eventual success of Capital One depended on two traits early on. The first was perseverance. When he was rejected by all of the major financial institutions, he saw the bright side, reflecting, “it’s not failure. It’s feedback.” The second critical trait was a focus on a people-centric model — finding the best people and making their success a priority. “Worrying about yourself is a bankrupt leadership model,” he said. “It’s not about you. It’s about them.”
There is no denying that the combination has worked well so far. While Fairbank claims the company was days away from being shut down in its early days, once the idea hit the marketplace, it quickly reshaped the industry. Capital One is a major financial institution, not only in credit cards, but in banking, as well, and while it has been hit by the financial crisis, it appears to be among the best positioned to gain market position as weaker companies are hamstrung.