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Wells Fargo is hands-off – CEO says his managerial style empowers his employees

Wells Fargo Chairman and Chief Executive Richard Kovacevich readily concedes that within the nation’s banking and financial services industry, top-down management is the norm.

For a financial institution such as Wells Fargo, which believes in empowering employees at all levels of its operations, there is almost constant pressure to revert to that more dictatorial style of management, he said.

By Steven Oberbeck
The Salt Lake Tribune

http://www.sltrib.com/business/ci_2427171

"There is pressure from regulators who would like for us to have a central point where they can go for information," Kovacevich said. "When one of our [82] businesses runs into problems, even some of our outside board members will sometimes suggest that we take a more hands-on approach."

Yet for Kovacevich, the people with the right answers to the problems within a business are "seldom those with the most stripes.

"Every person at Wells Fargo knows more about their jobs than I do," he said. "My job is not to tell [employees] how to do their jobs but to help them to do them."

Kovacevich was the keynote speaker Wednesday at the 14th annual Spencer Fox Eccles Convocation at the University of Utah’s David Eccles School of Business. The annual event recognizes the role that Spencer Eccles, former First Security Bank chairman, played in getting his aunt, Emma Eccles Jones, to donate an endowment of $15 million to the business school.

Four years ago Eccles struck a deal with Kovacevich to sell First Security to Wells Fargo – an agreement that brought an end to the historic Utah-based bank and turned over its operations to the San Francisco-based multistate financial conglomerate.

During his address, Kovacevich told students there is a deep need for leaders within the business community. He contrasted the role of such leaders with those of business managers.

* Managers are worried about business systems while leaders are worried about people.

* Managers are worried about control. Leaders are concerned with trust, he said.

* Managers are concerned with what is right(in the strictest sense), while leaders are worried about doing the right thing.

Instead of earning Master of Business Administration degrees, Kovacevich suggested tongue-in-cheek that future business leaders should consider earning a degrees in "believing" in the enormous talent of the employees at all levels of an organization; a master’s in "motivation and fun" to help people get excited about what they are doing; and a doctorate in "leadership" to take people from where they are to where they have never been before.

Kovacevich tries to run an organization that empowers its employees, said Jack Brittain, dean of the Eccles school.

"He really sees that as the primary job of a leader and he has helped develop a corporate culture at Wells Fargo that tries to accomplish that," Brittain said. "But at the same time he’ll admit that it isn’t easy."

Richard Kovacevich

Position: Wells Fargo & Co. chief executive since 1998

Previous position: CEO of Norwest Corp. prior to its 1998 merger with Wells Fargo

Compensation: $8.5 million in salary and bonuses for most recent year

Age: 60

Education: Stanford University master’s of business administration degree as well as bachelor’s and master’s degrees in industrial engineering

Board membership: Wells Fargo board chairman; board member for Cargill Inc. and Target Corp.

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