Gideon Sasson, the CIO of financial services giant Charles Schwab, talks to ZDNet.com editor-in-chief Dan Farber about mistakes the company made during the dot com bust, and says innovation used to start with technology, but now IT is more closely aligned with the business. Below are excerpts from the video interview.

Q: You've been at Schwab for about 11 years, and mostly in technology roles, although I do understand that you were head of the active trader department as president for about four years. Now you're the CIO again, and how do you see your role as CIO given all the experience you've had?
Gideon Sasson: Being on the business side for a few years was probably the one thing that prepared me the most for the role. And when I came in as CIO, my desire was really to focus on people, business, and process, and a lot less on technology. And so actually I appointed a CTO that manages most of the technology decisions for the organisation, delegated that down, and as a CIO my focus is really to continue to move the culture of the organisation toward the business, supporting our business, and continuously improving our processes, and very much so talent development in the organisation.

With a brand to protect, and obviously IT is a very important part of that, you must have seven or eight million accounts that you're holding, and billions of dollars in those accounts. What are the things that you're doing to ensure that your site doesn't go down like some of the sites went down during the holiday shopping season?
Sasson: Well as an IT organisation we have five strategic objectives that have been with us for two and a half years, and will be with us for as long as I'm a CIO, at least.

Productivity, simplification, business partner satisfaction, availability, employee engagement and development. We are focusing on those five, everything that we do in the organisation link to one of those. Our environment -- we have been a company that's been incredibly innovative and very much focused on our clients. We have not focused on simplifying and building an environment that is flexible. We have a very, very complex environment.

When I took over we had three trading systems for mutual funds. We're down to one. We have two broker/dealer systems running in our environment: the legacy one that we bought 30 years ago, and the one we've been developing over the last ten years. We are coming very close to having a single broker/dealer system in our environment.

We have WebSphere and WebLogic managing two different important websites for us, consolidating those. Simplifying and become more productive is critically important. Business partner satisfaction: how we serve our businesses. We rate ourselves with our businesses every year using a third party to measure us in 29 different attributes. Trying to understand the gaps in the organisation. Where we need to invest and improve in serving our business. And the most important one is the employees. At the end of the day, everything we do, everything we create, the whole value of the firm, is in the hand of our employees.

Speaking of your employees, it sounds like obviously you have to run very fast, you're in a very competitive, and even regulated, environment. How do you create that culture where innovation and collaboration really occur so that you can stay ahead of your competitors?
Sasson: By being incredibly focused as an organisation. You know, Chuck Schwab created this firm 30 years ago with a very, very clear vision -- that every single employee at Schwab knows we want to be the most useful, we are the most useful and ethical financial services firm in the world. We have a set of values that we follow, we're incredibly clear on our clients. So, everything we do has to do with our client, our vision, and our values as an organisation. It allows us to be incredibly close to the clients' needs. And that's where innovation happens. When you see a client's need, when you understand that, that's when you innovate.

What was it like going through the (dot com) downturn?
Sasson: Challenging, challenging. I came into that business with a client base that was the high-end of that business. Attrition rate was in the top 20 percent. We -- our cost structure was just incredibly high. Average ticket price was, or commission for my client, was in the 40 and 50 bucks, when the competitors were offering that same trade for $9.95. So it was incredibly challenging, and in fact what we did was brought technology to counter the price issue by creating a tremendous value through service and technology, to reduce that attrition down to single digits.

What are some of the technologies at this point that you think are going to be very important to you now, or the coming years, to help reduce costs, to serve your customers better?
Sasson: Quite honestly I think where we focus on technology now is much more customer experience than cost. We have to continue to be very productive.