Cool Hand KOUACEUICH - Richard Kovacevich, Wells Fargo and Co - Interview - Statistical Data Included

Chief Executive, The, May, 2001 by C.J. Prince

Today, non-bank competitors are developing traditional products to woo your customers. How well are you positioned for that battle?

The problem they're going to face with things like checking and ATMs are very expensive infrastructures. The incremental cost to us of a commissioned broker or a commissioned insurance agent is very small. The incremental cost of an insurance company or broker getting 6,000 stores where people come in and cash checks every day or 6,000 ATMs--that's not inexpensive. So we're at an advantage, having those existing costs embedded.

We're also the largest Internet bank in the country. We have more activity on our site than Schwab or American Express or other non-banks do, we have 2.5 million customers, we add 100,000 a month--and 90 percent or more of them come through our traditional stores. No wonder those other guys are losing.

And again, I just shake my head at all the hype--it's unbelievable. Every consulting firm, all the big names, coming in and saying, "You guys are organized wrong, here's what you've gotta do. If you don't, you're gonna get killed." Somebody ought to write a story about the great geniuses and their ideas that millions of dollars have been spent on and how wrong they were.

By the way, we had geniuses come in and tell us we were all wrong about the way we were putting these two companies together, too. It's amazing to me how wrong, generally, the media, consultants, and equity analysts are in terms of what's important. And it's tough when you're getting beaten up every day to hold onto your conviction, when no one really knows the answer. If the answer is obvious, it doesn't ever get to me. The only decision a CEO ever really gets is the 60/40 decision. Because everything else, if it's obvious, gets done--if you've got the right people making those decisions.

You and Les Biller have been called a dynamic duo of sorts. What's the secret to your good rapport?

I would like to think that my relationship with all the people who report to me is good. I don't think people should necessarily love each other--this is still a business relationship, not a marriage, and that means you can have differences. I actually think people need complementary skills. If we had a company full of Dick Kovaceviches, it'd be a disaster, in my opinion. So what I look for are people who are complementary who may be better in certain areas where I'm weak and vice-versa.

Even if you have good people around you, should the vision for culture ultimately come from the CEO's office?

The way I would describe it is that I'm the scribe of the culture. Or, by listening to people, I get to articulate a vision or select one if there's a tie. But some people think the CEO sits in an office and writes big mission statements. I don't do that at all. I don't care who had the idea. If I believe in something, that's what it's about. And I can tell you that our vision and values and operating thoughts are a culmination of experiences I've had in 35 years of business. I didn't wake up one day with a message. It's evolved over time, by observing what works and what doesn't and making mistakes.