Graduating at the top of your business school class is one thing. Being a great leader is another, according to Wells Fargo chairman Richard Kovacevich.
Kovacevich, the keynote speaker at Wednesday's 14th annual Spencer F. Eccles Convocation at the University of Utah's David Eccles School of Business, told students that success in business is about putting to work certain core principles, not academic prowess or grade point averages.
"I've learned that life in the business world is less about brains at the 99 percent level and more about people, leadership, teamwork, integrity, culture, community involvement, motivation, vision, values and a broad understanding of a variety of business disciplines," Kovacevich said.
Great leaders, according to Kovacevich, hone four skills: believing, affirming, motivation and fun.
"Why do many people enter business being bright, well-educated, energetic, wanting to make a difference — and in a few years feel bored, ignored, unfulfilled and unimportant?" Kovacevich asked. "Why is that?"
Too often, he said, it's because their bosses focus more on managing than leading.
"Managers administer. Leaders innovate," he said. "Managers rely on systems. Leaders rely on people. Managers need control. Leaders rely on trust. Managers work on getting things right. Leaders work on the right things."
Leadership, according to Kovacevich, is "the act of establishing and communicating a vision of the future, and the art of motivating others to align with and embrace that vision. Leaders help people achieve challenging results, giving them the confidence to continue achieving them. Leaders take people from where they are to where they've never been."
When that happens, Kovacevich said, the company performs, employees fulfill their potential and work is fun. And incidentally, having fun should be a priority, he said.
"I define fun as working with people to help them to get excited about what they're doing," he said. "When people aren't having fun, when they're not recognized for outstanding performance, when no one says thanks, they do become disengaged and feel unimportant. Recognition, I believe, is, on the margin, more important than salaries, benefits and bonuses, since most all large companies pay competitively. It is corporate America's most underused motivational tool."
Wells Fargo has, over the past 15 years, grown revenue and profit at a 12 percent annual compound rate, Kovacevich said. Its stock price has compounded at an annual rate over 20 percent, about twice that of the S&P 500 index.
When Kovacevich joined Minnesota-based Norwest Corp. in 1986 (Norwest merged with Wells Fargo in 1998, at which time Kovacevich became Wells Fargo's president and chief executive) the total market value of Norwest stock was less than $1 billion. Today, Kovacevich said, the value is about $102 billion.
Leadership has played a role in that, according to Spencer Eccles, emeritus chairman of Wells' Intermountain region.
"Anyone who sleeps indoors knows that the speed of the leader is the speed of the pack," Eccles said. "The leader of this pack is Dick Kovacevich. . . . Dick knows that success comes only one customer at a time, one employee at a time, and that size will only assist success, if well-managed."