Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition

Chapter 22. On Human Beings: Clients and Crew

My account of Vanguard's founding, our persistence through the struggles of 1974 to 1981, and the qualities of leadership that seem to have been required is a story that is part tragedy and part triumph. Each crushing disappointment was eventually followed by serendipitous success. Not until 1981, when the modern Vanguard was fully formed, did we begin to sail on an even keel. But even in the rough seas of the early years, when the horizon dissolved in darkness and our very survival was in doubt, I retained my conception of those who would serve within our ranks and those whom we would strive to serve: human beings.

If simplicity was to be the focus of our investment principles, human beings would be the focus of our management principles. Over the years, I have come to love and respect the term human beings to describe both our clients and our crewmembers. In December 1997, I gave a talk at Harvard Business School on how our focus on human beings had enabled Vanguard to become what at Harvard is called a "service breakthrough company." I challenged the students to find the term human beings in any book they had read on corporate strategy. As far as I know, none could meet the challenge. But "human beingness" has been one of the keys to our development.

How often I have said, over these long years, that those whom we serve must be treated as "honest-to-God, down-to-earth human beings, each with their own individual hopes and fears and ...