Early in his corporate career he was a planning and division general manager with General Mills before joining Citicorp. At Citicorp he was made head of regional retail banking. Kovacevich was told by his team that Citibank had 30% market share but was losing 108 million dollars a year. Probing deeper, Kovacevich realized that they meant that Citibank had 30% checking account market share. In reality, Citibank only had 6% market share of deposits. Kovacevich expanded Citibank aggressively into other areas such as mortgages.
Norwest
He then joined Norwest Bank as chief operating officer and head of the retail banking group in March 1986. At Norwest, Kovacevich confronted a similar situation. Norwest was mostly centered in Minnesota and Iowa at the time, with a relatively small population in both states. Kovacevich realized the only way he could keep growing the company would be to expand beyond banking services, into investment and insurance services as well. Kovacevich theorized that eventually it would be impossible for any bank to continuously grow if it did not do this. Kovacevich instituted the new strategies while serving as president of Norwest from 1989, chief executive officer from 1993, and chairman from 1995. The higher revenues, relative to stable fixed costs which this method produced allowed Norwest to purchase many other banks, culminating with the 1998 purchase of Wells Fargo. Although Norwest was effectively the survivor, the merged company retained the better-known Wells Fargo name and moved to Wells Fargo's headquarters in San Francisco. After the merger, Kovacevich was given the positions of president and CEO of Wells Fargo. In 2001 he was elected chairman as well.
Legacy
Kovacevich is responsible for many trends currently found in the financial services industry:
Calling branches "stores", instead of "branches". This is a reference to both the diversified products they sell, beyond normal banking products, and also to the sales focus the employees have.
Expansion into non-traditional banking businesses, such as investments and insurance. This culminated in the Gramm-Leach-Bliley Act.
Integrated cross-sell strategy. This strategy is to market most products only to existing customers, primarily by employees, instead of each product line attracting its own customers via its own marketing. This method can be cheaper and more successful.
His "leadership style puts accountability for success in the hands of each and every employee".
Wells Fargo
He relinquished the presidency of Wells Fargo to John Stumpf in August 2005. On June 27, 2007, the board of directors elected Stumpf CEO, with Kovacevich retaining the chairmanship. In September 2009 Wells Fargo announced Kovacevich would step down as chairman and a director at the end of 2009 and retire from the company in early 2010 after 23 years with Norwest and Wells Fargo.
Kovacevich joined the board of advisors in 2013 and the board of directors in 2016 of heavily criticized Theranos, a now defunct privately-held health, technology and laboratory services company headquartered in Palo Alto, California that falsely claimed to have developed devices to automate and miniaturize blood tests using microscopic blood volumes. He was also an investor in the company. Theranos corporate governance practices have been criticized. Theranos's tests were exposed as unreliable, government regulators found the company posed a risk to patient safety, Walgreens suspended Theranos blood tests in their stores, the US proposed severe sanctions on the company, and the Justice Department and Securities and Exchange Commission began criminal investigations into Theranos. Kovacevich continued to defend Theranos as "a good company" and claimed the treatment of CEO Elizabeth Holmes was "unfair."
