Dick Kovacevich speaks at Stanford
Dick Kovacevich spoke at the Stanford GSB last week on what’s he’s learned in the 43 years since graduating from the GSB.
Above: Dick Kovacevich speaks in Bishop Auditorium at the Stanford GSB
Highlights for me:
- Culture saved Wells Fargo. Sub-prime mortgages and CDOs didn’t fit with Wells Fargo’s cultural framework, so they were never heavily exposed. In May, Warren Buffet made a remarkable comment about WFC: “If I had to put all of my net worth into stock, that would be the stock”. Given how much people talk it down in class discussion sometimes, it’s amazing how much culture really, really matters.
- Crisis creates opportunity. Dick sees WFC’s acquisition of Wachovia as the best deal in the history of banking and one of the top 10 deals of all time. Dick’s comments were in stark contrast to those of Linda Riefler’s, made a few weeks ago discussing the insane convulsions Morgan Stanley suffered as it nearly went bankrupt as the credit crunch leveled Wall Street. I think there’s a pretty powerful lesson here. Hopefully writing this blog posts helps keep it in mind.
- The world has changed. Goldman and Morgan Stanley are the only old school investment banks left standing—and even they have been changed into bank holding companies. Wells Fargo sees a cultural shift in the industry allowing them to enter. They’re among the top 10 investment banks today and plan to in the top 5. This was a “wow” moment for me. I have preconceived notions of “banking culture”. Dick’s betting that changes. His logic makes sense. Wow.
