In “Bull by the Horns,” former FDIC Chair Sheila Bair notes morale at the agency increased dramatically under her leadership during the financial crisis, with it even being recognized as a “best place to work.”
After speaking at a recent forum in Minneapolis, Bair shared her opinions on what makes for good management. “You need to listen to your people,” she said. “We did a survey. It was anonymous and done by a third party so no one had to fear giving honest answers. Through that, we identified some of the issues, and we fixed them.”
Part of the challenge, she said, was helping staff work toward common goals. Bair said one goal was to make sure no insured depositor ever had to wait more than one day to access their money, whatever the situation. “Everyone at the FDIC had a piece of that goal,” Bair said. Updated job descriptions were important, as was additional training. She said it was important to make sure everyone understood how their job contributed to the overall goals of the agency.
In 2008, Wachovia was struggling and was almost purchased by Citigroup before Wells Fargo came in at the last minute and struck a deal. I asked Bair if she thought the Wachovia deal made Wells Fargo too big to manage and led to some of the troubles Wells Fargo has been dealing with over the last couple of years.
“No, Wells’ problem isn’t about being too big to manage; it relates to culture, which has been very disappointing. Culture is something you can change. The question with Wells is, do they have the will to change it? Do they want a CEO who will be a change agent?” Bair said. “The culture issue is at the top, not at the bottom.
“Wells Fargo has some outstanding people. Their business has been hurt, but their deposit base has remained pretty much stable, I think because they have good people in their branch network who interface with the customers. If anything, Wells hasn’t treated their customers as well as they should but they haven’t treated their people as well as they should, with performance incentives that were poorly thought out. I still hear anecdotally they still have extremely aggressive sales targets and they are trying to cut costs.
“They should be focusing on their people and their customers,” Bair said. “They shouldn’t be focusing on anything else.”
The American Banker newspaper included Bair’s name on a speculative list of potential candidates to fill Wells Fargo’s CEO opening. I asked if she was interested in the job. She laughed.