David Novak 0:04 

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple you can apply as you develop into a better leader. That's what this podcast is all about. You probably heard the tongue in cheek expression, do as I say, not as I do. And you've probably worked with people who lead that way, saying one thing, but doing something entirely different. Well, my guest today is not that kind of leader. Charlie Sharpe is the CEO and President of Wells Fargo. He took over in 2019, which, as you may know, if you follow the banking industry was a real low point in the company. But listen, the turnaround he's leading there is remarkable. And you're going to hear all about it today. You'll also hear a leader who understands that you can't just say what your priorities and values are. Although that's crucial. You've got to set the example yourself. So your decisions and actions align with those priorities. That's how you earn the respect and trust you need to get people working together and following you and believing in you. Let's see how it's done. Here's my conversation with my good friend and soon to be yours, Charlie Scharf.

You know, Charlie, I knew you were into tennis, I knew you were into golf. But I learned that you're also a woodworker. And you're the only leader I know who's a woodworker, what's the best thing you ever made?

Charlie Scharf 1:48 

The best thing I ever made was I built a library in house I owned years ago. And when I say built, I, raw wood delivered to the house, started from scratch, created my own molding, built shells. And I gather, it's still standing because we know the people that own the house.

David Novak 2:05 

Great, you know, and I got to ask you, what's an essential skill in woodworking that you've carved into your leadership?

Charlie Scharf 2:13 

Well, I would say one of the essential skill. But the other reason why I enjoyed it. Number one is the essential skill was, you've got to be precise. When you're building something, it has to fit together, every eighth of an inch matters, you got to plan ahead. And you've got to know what that precision is going to look like. And the same thing is true. When you're running a big organization and stuff happens, you got to figure out how to adapt to it. But you got to go into it with a real plan. That's precise. But the reason why I really enjoyed doing things like that is because you need to clear your mind, you need to do things that that you focus on that allow yourselves to unwind. And that enables me to put even more focus back into work, because I'm able to decompress in various ways.

David Novak 2:54 

When you unwind like that. And you reflect as a woodworker, do you ever recall a an idea that really came here, as you were you were doing that craft?

Charlie Scharf 3:03 

I think about people differently. When I'm in the moment I react, we're having a two way conversation. But when you go off and you have a chance to unwind, I have a chance to reflect on what are people really like? What are they really saying? How intuitive are they? Are they compassionate about others? So I think about people much more broadly, when I'm reflecting back on the conversation when I have time to not to be in the moment and be dealing with the issue.

David Novak 3:32 

It makes a lot of sense. And you know, I can't wait to talk to you about how you're leaving at Wells Fargo. But first, I want to take you back to the beginning. What's a story from your childhood that shaped the kind of leader you are today.

Charlie Scharf 3:44 

First of all, I was very, very lucky to grow up in a really great close family, but the family values were about being ethical. And they were about taking responsibility for yourself. And just working really hard. I remember I mean, I started working summer jobs when I was 12 years old. And I don't mean just paper routes and things like that. I did that when I was younger, but I really started instead of you know, going to just camp and things like that getting a summer job for the whole summer and working. It was very much about improving yourself, figuring out how, you know, the real world operates out there. And so I used to work summers, it was living in New Jersey, I used to commute into Manhattan with my dad. And it was very much about just the growing experience and about what you're learning about how the real world actually operates. And you grow up to know that if you know there's a world out there that you can get to know and if you put the effort into it with the right kinds of opportunities, and I was very lucky that way for sure. But you've got to make something for yourself.

David Novak 4:51 

And I also remember you telling me once that the sharp house, no one ever missed dinner. I mean, yeah, he had to be there now what Do you remember most about those dinner conversations?

Charlie Scharf 5:02 

So you're right, we I was incredibly lucky, my dad had a job where he really didn't travel. My mom, when I was growing up was a school teacher. And so we had dinner together every single night. It was a small house, and it was a small Eden area, we're all very, very close. I wouldn't describe it as formal. But everyone wished we shared what we did that day, we shared, what we learned, we shared what we wanted to do. And what I remember most about it was, it wasn't an intellectual conversation. But the conversations were all about, we all cared about each other. We all wanted to know what each other was going through, we wanted to know what we were experiencing. And you just walked away, in retrospect, knowing that you had this incredible support network that I've thought a lot about both, as I've been a parent, but also the responsibility you have at work when you manage people. You know,

David Novak 5:57 

you've been a superstar in the world of banking for a long, long time. But what was it that you learned about yourself that made you want to get into finance in the first place.

Charlie Scharf 6:08 

So I had a lot of summer jobs in the business world, and my dad was in the business world. But when I went to college, my thought was, I wanted to be a research chemist, I loved science, I was good at science in school. And so I went to school, and I took all these, these chemistry classes. And I realized very, very quickly, that I didn't want to live my life in a lab, no windows, not really engaging with people, that what I really loved was being part of something I love being the idea of working with a group of people as a team and building something. And that's what I saw business could be. And I was, you know, lucky enough to see that that was possible to know that you could work with a group of people who cared about you that you'd be able to grow alongside that. And so the idea of working with people working with a group doing something other than just sitting by yourself in a lab without any windows, that was far more appealing. That's how I wound up pivoting. Now,

David Novak 7:08 

as you know, Charles, I'm more of a marketing person, and I gotta know, how in the world something is what could be perceptually perceived to be as dry as finance gives you so much joy, because it does.

Charlie Scharf 7:23 

It does. You know, first of all, I think I grew up with finance. Because my because my dad was in financial service, you know, my dad was an investment advisor. And so we talked about the financial services world, we talked about the stock markets, that's the way I grew up. Very different. My wife's both parents were in the telecommunications world. And so those were their conversations. So our conversations were about financial services, and about how financial services and how those products and services really help people. And so I feel comfortable with it. But what ultimately, you come to realize is you can have a meaningful impact on people's lives. If you work in an organization, which is broad enough, and does the right thing.

David Novak 8:01 

What would you say was your first big break in your career

Charlie Scharf 8:05 

when I was in college, and I was going through the interview process, with school in Baltimore at Johns Hopkins, but I really wanted to be back in New York, and I wanted to work for a large financial services company. But my dad said to me, you really should think about this little company called commercial credit, little company that was based in Baltimore, which had just been taken over by Sandy Weill, who had started and built Shearson and became president of American Express. And Jamie Dimon who was the CFO. And he said, you know, this is a small company, these are great people, they're going to do great things. He encouraged me, and he actually helped get my resume to Jamie, who interviewed me and hired me. And the amazing thing was, you just knew when you met these people, that they were people that were going to do something much bigger than what that company was, and they wanted to bring people along with them. You know, I kind of stumbled into it, because my dad knew of Sandy and knew had a connection at my dad's cousin was close to Jamie's dad. And that got my resume to Jamie. And without that role, I'm not sure the succeeding roles would have happened, because I was just in a small company that grew into a very, very large company, and was able to grow myself along the way in ways that I think are just not always typical.

David Novak 9:24 

So you get this opportunity to work alongside Jamie Dimon who's become one of the greatest CEOs of our time at JPMorgan Chase. What's the biggest thing you picked up from Jamie, that you've brought to Wells Fargo?

Charlie Scharf 9:37 

You know, I think what I learned along the way, from Jamie is there's management and there's leadership. And both are really important. And sometimes people get those two things confused. They substitute one for the other. But when you're running a large, complex organization, you've got to manage the place right? You've got to have the right people in place. You gotta have the right priorities you got to run Have the right discipline. So you got to do all those things, which, when you think of what it takes to run a good company really matter. But at the same time, when you're leading a large group of people, they want to be led. And they want a leader, that they have confidence in, who they can relate to who they believe has the best interests of a broad group of people, not just themselves, their career, or a small group of people. You know, I think when I look back in life, if I had a choice of people saying he was a really great leader, or he was really great manager, I'd much rather them say he's really great leader. So I think it can be much more impactful as a leader than just in terms of what it takes to manage. You know,

David Novak 10:41 

Charlie, I had the great pleasure of watching you in action when I was on the bank one and then the JPMorgan Chase boards. And you're an avid learner, and I saw you grow a lot after during the CFO job, you headed up all of retail for JPMorgan Chase, tell us the most impactful story of what you learned in that job.

Charlie Scharf 11:01 

So what I learned in running these large retail organizations, which are retail organizations are about people, and retail organizations, I think it's the same because I came and I remember spending time with you and talked about, you know, what makes them successful, I had the opportunity in the past to look at different financial services, retail based organizations, but what you come to understand is, it is about the people. And if, yes, you've got to have the right products and services, you've got to if you've got really interesting marketing, incredibly helpful, but ultimately, the power of getting a group of people to work together doesn't matter what you're doing, whether it's rolling about running a financial services company, building the business at a bank branch, running a local supermarket, whatever it is, you get those people working together, and treating them like their owners, like they're really responsible for that and approach your role like you're there to support them. There's incredible power in that. And you get people working together, you give them some of the basic tools. And a lot of respects, just get out of the way, as you know, recognize people for what they do share the great stories. It doesn't matter whether you're managing one branch, 100 branches, 1000 branches, or 5000 branches, that magic is still the same if you can get that group of people working together and then replicating that same thing. You know, some

David Novak 12:26 

people never really get that, Charlie, you know, did you ever have that aha moment or the epiphany where you saw something they just said, you know, when I see what it's all about, this goes

Charlie Scharf 12:37 

back to when I was a commercial credit, there was a guy named Bob Leffler, you know, Bob ran the brand, the brand system. And he was just adamant about, he used to talk about treating people like grownups, very often, when you're at the top of the company, you think you know everything. And you've got to be very prescriptive about telling everyone what to do all the time. Because you know, and in reality, it's just the opposite. It's you need to figure out what you could do to be supportive of everyone who's actually dealing with customers every day, Home Depot used to talk about, when you do an org chart, you put the people who are closest to the customer at the top, and store support, which was the, you know, the corporate headquarters was at the bottom. And if you think about things, that way, you're there to support everyone else. And so what I saw was the way Bob implemented that and you do it by treating people, if you were your own company, how would you want to be treated, you'd have your results, you would have latitude to do a certain set of things. Yes, there guide rails and terms of within people have to work. But you actually saw the power of letting people manage their people and be embedded in those communities. Now, we're a big financial services company. So we've got to make sure that we do things, right, we have to have certain standards. So this isn't, you know, people can do whatever they want, just like when you were young, but you know, they want to do consistency and a lot of respects of certain things. But you want to bring out those individual characteristics, where people day in and day out, come in and can figure out how to do a great job for people that are walking through the door or that are in that community. Yeah, it's

David Novak 14:09 

like a freedom within a framework. Yes. And then your first public company CEO job was at visa. What do you learn a visa that you're putting into action today?

Charlie Scharf 14:21 

You know, I remember when I went to visa, I got a bunch of calls from people, some who I had worked with in the past, who've gone on to CEO roles, others who I didn't know who just just wanted to be nice, and they said, you know, these jobs can be they're hard, but they can be very lonely. And you need to think about how you are going to allow yourself to process and to deal with all the things that are coming at you because you don't know what it's going to be. And one day Things are going to be great. And then the next day you're going to have some crisis and then you're going to have a people problem and and that's just What happens, and what you have to remember is that everyone in that organization is looking at you. Everyone wants to know how you're feeling, they're gonna sense when you're in a good mood or a bad mood, they're gonna sense when you feel like things are up or, or you're feeling down. And that set the mood of the company. And as a leader, you need to figure out what tone you want to set. And so when I think about wells, and I think about what we've had to deal with, here, we've got a lot of hard work that's got to get done, we've got some hard decisions that we have to make. I've had some very good days and have had some very bad days. But what's most important is, if you believe you're doing the right thing, if you know that you're making progress along the way, that you've got to send that message to the organization, you got to be honest about what's worked well and what hasn't worked well. But people have to believe that you've got the confidence that you believe that you've got the team in place, that regardless of these ups or downs, that they should feel proud and confident to be part of the team that they're on.

David Novak 16:05 

Absolutely. I know, when you went to visa, you earned a lot of praise Charlie and got a lot of accolades from analysts and investors, and insiders for basically breaking tradition. Tell me a story of how you did that. That

Charlie Scharf 16:21 

actually was one of the hardest things I've ever had to do, which is you go to a company, which was extremely successful. Visa was and still is the largest, most successful payments company in the world, the company had gone public for years before I got there, and the stock was up probably two or three times. And so you know, I show up as a first time CEO. And what you recognize is all those things I said were true. But if we just kept doing things the same way, we were gonna lose our position, we had to evolve, we had to embrace different things that that we weren't necessarily embracing, whether it was partnerships, whether it was what was happening in the digital space. And so trying to convince people, that what had made them successful for the past, probably 40 years that the company was in existence, wasn't going to be good enough going forward. And that was a challenge. But what I also found, people think when you have these leadership roles, that you can just tell people what to do, and they'll do things because you're in charge. And that might be true for a day or for a week or for a month. But that comes to an end, because people aren't just gonna blindly follow a leader. But what's most impactful is when people actually understand what it is you're thinking and why you're thinking it, you're making them part of the conversation, you're making part of the dialogue. And you're making people part of figuring out how we get from here to there. And so making sure that people understood when I got the visa, that I was when you look at the past success, that it is incredible, that a lot of it was due to the people that were still there. But those are the people also that are going to be the most impactful for the next 1015 20 years. And giving them the latitude to think more broadly about how the world has to evolve and have given people the license, when in fact you're pushing. But you want them to believe you're you're giving them the opportunity to take that next step. And you'll be there alongside them was something which I think is extremely impactful. That's

David Novak 18:17 

like having a healthy dissatisfaction with the status quo. So the way how you're you made it healthy was it? Was it because you acknowledged the success in the past and then said, Hey, let's raise the bar.

Charlie Scharf 18:29 

Absolutely. Listen, you've got firstly, you got to be very respectful of the past, whether it's whether it's good or bad. I mean, the past is the past people come in, they work very hard. People want to work for positive leader, they want to work for someone that can point out the things that need to do better, but recognize the good things, and they're always good things, even if the sum total doesn't always work out the way you want. And so it is really important that you're looking for the things that work that people know that you recognize that those things have worked, how hard it is. But tomorrow is another day. And what made us successful yesterday isn't necessarily gonna make us successful tomorrow.

David Novak 19:06 

And then Charlie, you had another huge CEO job. And that's when you became the CEO of Bank of New York Mellon. Tell us a story of the biggest leadership lesson you learned there and how you're applying it at Wells Fargo.

Charlie Scharf 19:21 

Well, can you tell you a leadership story about leaving visa first?

Unknown Speaker 19:24 

Sure.

Charlie Scharf 19:25 

So this is this is an interesting one because i i love the job at visa. I love the people I work with. I love the industry. It was something that I thought I was going to do for the rest of my career. And I wound up leaving visa without having another job because of something that one of my daughters was going through. And people say to me, Oh, it must have been a really hard decision. And I look back on it and I told people at the time It's not a hard decision, actually, that everyone in their life has to figure out what their priorities are, they have to figure out what's important to them. And I've always said in my life that I love work. For me, it is one of the most important things that I do in the most the things that I get the most satisfaction with. But my family's before that. And so when a situation presented itself, where it was clear that it was just too hard for me to be five hours away on the West Coast, it was very obvious to me that that was the right thing to do. And that life in your career isn't always a straight line. Now, I was lucky enough that I had been successful, I had a good reputation. I was financially secure. But you sit there and say, I have to follow what I think the right thing to do is, and I've got the confidence that I will be able to find something that works in the context of what works for me personally, as well. And that's what took me back to New York, and then ultimately to be in white Mellon.

David Novak 20:58 

And but you don't have to give up that power visa which you had taken to new heights. I mean, you were getting you form new partnerships, you've done all kinds of things to break the grounds, giving up that power. That had to be hard.

Charlie Scharf 21:13 

Yes and no, I have worked really hard. Because I've seen people who have become very successful in business. And I've seen people choose two different paths. I've seen people who they are who they are, it doesn't change them. They treat people the same way. They don't let it get to their heads, they differentiate between what's the job versus what's them, what's the seat versus what's really you. And then I've seen other people who just come to believe that they are the job. And it defines them in a way which really isn't realistic. And I never liked that model. And I saw it do things to people that weren't the way I wanted to live my life. And so I have worked really hard to try and be very realistic about sitting in these big chairs. It's an honor, it's a privilege, hopefully I bring a lot to it. So I helped define it. But the day you leave that job, you're not going to be treated the same way, you're not going to be invited to the same function as you were invited before, you're not gonna be invited to steak dinners at the White House. And these things what I've been lucky enough to do, but I'm comfortable in who I am. And so if I never had a big job after that visa role, I'd look back on and say it wasn't that great fun. I enjoyed it. Yes. But that was one of the things that I did in my life. And that didn't define me.

David Novak 22:31 

You know, that's like you say life is not a straight line. And then you did get the job to go to Bank of New York Mellon. Was there anything significant there that you picked up that, you know, that's helped you navigate the challenges that Wells Fargo shortlist.

Charlie Scharf 22:45 

And I think, you know, when I went to, you know, being why Mellon, I would say it's a very, very different culturally than visa very, very different than whether, you know, the old city or JPMorgan, the companies I was able to work out before. So this was a company that was founded by Alexander Hamilton, great heritage, again, very, very proud group of people working for the institution providing super important services to other financial institutions around the world. But you know, that company, too, has to sit there and figure out what it's going to be in the future, figuring out how you motivate a group of people that the company was doing. Okay, not great. But it had this amazing past that people were really proud of, that's different to navigate, then visa, which was doing really, really well, that's very different to navigate. Then, when I was at JPMorgan, and we brought the Washington Mutual branches. And we had to get people on board quickly. But that was a company that had failed. So it's very easy to say, Listen, we want you to take a different path, you know, we can prove to you that it's gonna be successful. We had a roadmap for it, this was something that was very, very different. And so again, getting into the hearts and minds of people, of making them come to understand that we're, you know, little shot to realism, we're not doing as well, as we all think we are, we're living in the past a little bit. And we need to think about how we're going to do things differently while you're bringing people along. It's another application of what I had to do with Visa, but a very different one.

David Novak 24:14 

You know, Jim Cramer of Mad Money has said that you buy the stock wherever Charlie goes, great compliment, you know, how do you handle such high expectations that that, you know, others have a view? I

Charlie Scharf 24:27 

think one of the hardest things in these big jobs is the pressure. And I think you've got to figure out how to take that pressure. And to channel it positively. Because I've seen people who don't handle pressure well, and it actually hurts performance as opposed to just not, you know, not being helpful. You know, whether you've got, you know, someone like Jim who talks publicly and creates very high expectations for you know, in this case, Wells Fargo, you've got to look yourself in the mirror and say, You know something, I actually have that responsibility. You know, while these big jobs, you can fly around the world and do all these really important things, what you're really responsible for is delivering for a group of stakeholders, whether it's your shareholders, whether it's employees, whether it's supporting communities. And so for me, it's all about, I always ask myself the question, sometimes it's at night, when I go home, sometimes it's the morning when I'm having my cup of coffee, sometimes it's on the weekends, when you're unwinding a little bit is, am I doing enough? Am I missing something? Am I making the tough decisions? Am I being as helpful to the people inside the company that I can be as helpful to what do I need to do differently, so that I can actually, as part of this team here deliver in the way that people expect. And I've been lucky enough that the platforms that I've been a part of, I think all have the capability to be more successful, 510 15 years out than when I arrived at that company. So I think the opportunity is there. And so then it comes down to am I doing all the things that I could be doing with my team to take advantage of those things?

David Novak 26:03 

Now, I want to take you back to five years ago, when you were appointed CEO of Wells Fargo, the Financial Times described it as the worst job in banking. What made it so from their perspective, it

Charlie Scharf 26:17 

was not even close to the worst job incredibly hard. I think that's what they probably meant to say, is when I arrived at Wells Fargo, great history, great franchise had been the most respected financial institution in the world. And we made some terrible mistakes, we made some mistakes with customers, we didn't build the right infrastructure inside the company. So we didn't catch it, our regulators pointed it out. We didn't fix the problems. We didn't necessarily fess up to the mistakes that we had made, which the public didn't like. And so you know, that's a tough situation to come into. So when you make your list of like, you're going to, you're going to show up the next day at a company, it was a difficult situation. But the people at the company were amazing. They all wanted to do whatever was necessary to bring back the respect that this company has had. We do an amazing job serving individuals and corporate customers of all sizes across this country and have done it since 1852. So you look at it and say, you know, I've got a two pronged effort here. Number one is to just fix the very basics, which were very obvious to me, but we had not done a great job at. And then the opportunity is to rebuild what is completely within our capabilities, which is taking advantage of this amazing franchise that we have. So again, I actually think it was a great job. Otherwise, I wouldn't have wanted to have come and do it. But there's no doubt it was hard. Listen, you have problems, you're in the spotlight, you got the government, you've got the regulators, you've got the public on you. I mean, those things are not necessarily fun every single day. But there's a clear path to winding up in a very different place.

David Novak 28:02 

We'll be back with the rest of my conversation with Charlie Scharf in just a moment, as you've heard his talk about Charlie got his big break early in his career working alongside Jamie Dimon, who's now the chairman and CEO of JPMorgan Chase, in our episode on how leaders lead, Jamie talks about how you always need a plan to deal with problems.

Jamie Dimon 28:23 

You and I know that big companies are always slowing down and always getting more bureaucratic. So and I have a lot of great leaders now. So I don't have to do it for them. But I still do it. I return every phone call every email. If I see someone's really dumb, I make sure it gets fixed. I tell them to today. Don't Don't don't start this thing. And we'll get we'll get to it when it's on my list. So, you know, every now and then I still just go do it today. And people smile. They say he's still Jamie Oh, he's drunk. But as you know, what do you do with very good leaders, you got to let them do it to go

David Novak 28:51 

back and listen to my entire conversation with Jamie, Episode 14 here on how leaders lead.

So you go to visa, it's a rocket ship. You got a successful company. Now you got to take it to the next level. You go to Wells Fargo, where are you inherit? I would say a bit of a mess. Which would you rather do? Would you rather go into the place it's ticking? Or would you rather go into a place that you know you got to turn around?

Charlie Scharf 29:24 

I mean, honestly, I don't have an answer to them. Because everyone always thinks that when you're in your situation, there's always another situation which feels different. It feels easier, I think back to when I was at visa and people used to say, oh, high growth company, high P E stock. Well, you have a different set of issues, which is you are growing really quickly. There's an expectation that you're going to continue to do that. You have your own dynamics that are there and so that job isn't easy. And so the people that have continued to run that company and build it, they feel the same kind of pressure in a lot of respects than I feel to deliver you just what you have to deal with day in and day out is very, very different. So what I get pleasure about is moving something forward is taking something that exists a certain way. And when I leave it, I want to believe that it's better than when I got there. And it's better not just on its merits, but people that are inside feel that it's better people outside feel that it's better. And I create a platform for the people who come after me to even do more with it. And so, you know, taking something at wells where we had all these problems, but it was a great franchise. Yes, fixing the problems, but also continuing to build on the great place. That is incredibly gratifying.

David Novak 30:34 

Speaking of problems, you had, I believe, up to 13 Consent Orders? Tell us what that means. In the world of banking, these are the the regulatory issues that you have, what does it mean for the novice out there?

Charlie Scharf 30:46 

So listen, the regulators are here every day, they look at what we do. And their job is to make sure that we're running the place in a safe and sound manner. And so if they think you can do something better, they give you a finding, they call it a matter an MRA a matter requiring attention. If you're not doing enough to get it done, or it's significant enough, they can give you a consent order at that point. And a consent order is a it's basically cease and desist doing something which is bad, and do the following things to fix what we think you need to get fixed. So it's a you know, there's not a clear message than that, that says, You can't doing continue to do things the same way. You have to address those issues. If not, you can wind up with additional restrictions, which ultimately could also lead towards you not being able to grow, or being forced to shrink or eventually not being an independent company more. So

David Novak 31:39 

you have 13 of these. I mean, that's that's a lot of them. And I know you've been whittling them down as a leader, what have you learned about solving tough problems like that? What's it take?

Charlie Scharf 31:50 

So I think first of all, I do think can never look past the obvious. So we can sit here today. And we can say, Oh my God, you have all these consent orders. If you have one consent order, that can actually ultimately do those really, really bad things to you beyond just the consent order, you would marshal all your resources towards fixing it. So when you show up a company, and you've got 1011 1213 of these, you would think that the whole company would understand that and would be geared towards fixing it. And that's not what I found, when you come to realize is, again, don't assume that what is obvious to you is obvious to everyone else, that you need to make sure everyone understands what that realism really is, and then what it takes to actually do the work. And so whether it's one consent, order five consent orders, 10 Consent Orders, it's work, just like growing a business or opening new branches of business. So you got to put your effort around. Okay, what does it take to do it? Do we have the right people in place? Do we have the right processes in place? Do we have the right reporting in place? Have we created the right sense of urgency around it, so that people understand that there is nothing more important than this? Everything else? All, you know, the ability to to grow, to introduce new products, if we don't run our business in a way that our regulators feel that we're safe and sound, then we can't do those other things. So it's not just telling people to do things. It's making people understand how this all fits together? Why we have to do it. And here's the recipe that it's going to take to get it done.

David Novak 33:18 

Charlie, you know, you mentioned sense of urgency. And that's something that you've always had, how do you build a sense of urgency into the culture,

Charlie Scharf 33:26 

I would say several ways. Number one is just clarity of the message. Whether you're managing a group of five people in a department, a branch or a store with 1015 20 people in it, or a large organization, you need to communicate over and over and over again, whatever the message is, you want people to hear, saying something once in a note saying something once in a town hall, people will hear it. But that's not galvanizing. People don't necessarily know what to do with that. And so figure out what that message is. So in this case, it is this is our number one priority, nothing is more important. Here's why. And here's what we're going to do about it, is do it in a note, do it in town halls, do it one on one with individuals, do it in group meetings, make sure the management team is doing it consistently. And what they most importantly need to see after that is that we're doing it ourselves. So do what I do, not just what I say. And so we become the role models for Listen, we're treating with a sense of urgency, here's what we mean by that. So in our case, it was that the operating committee reviews these things multiple times a week, we sit in a room, we go through all the detail over and over and over again, we make sure that we're close enough to make sure we're providing the support, we're making sure that we're finding the right resources that people are directed properly. And if they see us do that, then they see that as a role model. But even more importantly, for the people who sit around my table for them to be successful. The only way they're going to be successful is if they do that with their group. And if their group then doesn't with their group, and so on and so forth, you create this machine that fits together in terms of how we execute, but they understand how it fits into a broader picture, which is that communication piece, which is so necessary. You

David Novak 35:13 

know, in the world of finance, you've got a lot of very smart, very talented, analytical people. What are the soft skills that you're trying to build into the company, we

Charlie Scharf 35:24 

are defined by what we do, not just what we say. And what I found at large companies. And I think Wells Fargo fell into this trap a little bit too much is we spent a lot of time putting on a piece of paper, what our vision was, what our values were, which is not unimportant. But then do we ask ourselves, are we living it every single day? Are we really making decisions based upon the framework that we said, this is what we want to be? You know, I always use the example of people always talk about, you know, put the customer first. And I don't know a company that stands up and says, they're not going to put the customer first. But then when you go ask the question, are we making decisions every day based upon that? Or are we making decisions that we think are, you know, better for an employee here in terms of whether it's going to drive their compensation? Are we making a decision because we think it's going to make us more money. And so if you really believe that, if you've got a set of fair products and services that are priced fairly out there, that if you're doing the right things to the customer, then you will eventually be rewarded. And so using that lens, but not just having it on a piece of paper, asking the question, are we actually making decisions based upon those expectations that we've set for ourselves? That's what's going to define us. And ultimately, our culture is going to be defined by the way people view us whether it's our customers, whether it's people who work there, whether it's people in our communities, that's going to define what the company is not what's on our sheet of paper, you want those two things to agree. But you have to live it every single day.

David Novak 36:54 

You know, no question, you and your team have been rebuilding Wells Fargo, which is one of the world's great financial franchises, period, you know, and you're building that brick by brick back to where it needs to be. What are you most proud of that you've accomplished so far?

Charlie Scharf 37:10 

What I think about where we are today, I think that we are a more respected company, today than we were four and a half years ago when I got here. And again, what I want to do is, I want to leave this company a lot better when I leave it than when I got here. And people are going to find that different ways. You know, our communities are going to say we're supportive, the communities, we're helping them going to grow, our customers are going to say, it's because we're doing the right thing by them. The people who work here are going to say, I'm treated, as well as I can be treated at any company. And they're providing opportunities for me and they care about me. All those things come together to say like, are we a more respected company? And I think we are and I want it to be more so tomorrow than it is today. And a year from now. You

David Novak 37:56 

come to Wells Fargo, the stocks, 40 COVID hits, you go down in the 20s. Now you're in around the $60 range. How do you deal with that period? Where the stocks just not move? And how do you deal with that? And then how do you deal with it when now it is moving? What's the difference? Or is there a difference?

Charlie Scharf 38:17 

So we have our management every every year we get tough 200 people together, you came in very kind to speak to that group a couple of years ago. And when I tell them is, you know, this stock on a daily basis doesn't matter. You know, because a lot of factors contribute to the stock going up or going down. But over a period of time, it absolutely gets it right, the market does get it right. And so you know, if you're going from 40 to 20, it's for a reason. And you need to make sure that you internalize that. And the same thing on the way up. And so you know, when the stock was down in the 20s, it was during COVID. It was interest rates, you know, we're an all time low, we're very interest rate sensitive. But again, you do need to look at it and say that, you know, there, there are people that rely on Wells Fargo to be a well performing financial institution. There are people that own the stock, there are people that rely on the dividend and it comes back to are we doing everything we can to build the place in a way which will make us more successful tomorrow. And when it comes back to taking that pressure that you should feel and channeling it in a positive way? Are we doing all the things that we should be doing? Are we making the tough decisions. And so you know, you do need to be out in front inside the company. You know, I focus less outside the company because I think outside the company, we want to tell a consistent story. And people will if you're doing the right things, and they'll see that but inside the company, people want to know that you've got the confidence that you've got the plan that that management and this is the management team, that's not going to be okay with the stock being in the 20s we want to go back up to the 40s and then higher from there. And so now you fast forward and you know, we're in the 60s and so on the one hand, you know, obviously feels much better than it did at 40 or 20. It's wonderful for people inside the company to see the value 401k, you know, be at all time highs, and they tell you that. But that too creates another set of pressures. Because what you've proven to people is we can make progress. We have figured a lot out here. But it's not a project, it's not a one time effort. It's all about continuing to drive the place forward, if you make the right decisions, get our problems behind us, build, grow, support our customers across this country, it'll be reflected in the stock price, and that ultimately, for a lot of people will determine whether we've been successful or not.

David Novak 40:30 

I've known you for a long time, how would you describe yourself today, as a leader compared to what you were 10 to 15 years ago,

Charlie Scharf 40:38 

I think I'm very, very different. I think, you know, mature, whether it's age maturity, going through the things I've gone through, but I think I am, for people that I work with really closely, I think I'm far more open than I ever was. Meaning I have come to really see the value in a team. And not that I didn't know that years ago. But I think at this point, and especially running institution, the size and scope of Wells Fargo, I can't do everything myself, I can't be in all these meetings, I can't make a lot of the decisions that I was able to make when my job was much, much smaller. And I'm very, very reliant on a group of people with their intelligence and their experience, but also figuring out how to bring that group of people together to channel all of our experience and knowledge into something which is better than we can do individually. And to me, that's gotta be personal, that you know, business is business. But I want people to believe that I care about them, that we care about each other. I want them to know a little something about me about, you know, what makes me tick about, you know, what makes my weekend fun or not so fun. So that, you know, we're really in this together in a way that is not doesn't cross the line between business and personal. But it's not just business. And I think if you can create that kind of environment, you create a bond between people, which is very, very different than something which is just purely third party professional.

David Novak 42:09 

You know, Charlie, you talk about being vulnerable. And in what I've always learned is that when you talk about your failures, some people really love that. I mean, do you have a failure story that you'd like to talk about that people actually love hearing at Wells Fargo?

Charlie Scharf 42:23 

I do. And I've Mike mayo, who was our bank analyst here, it actually repeats the story very frequently inside wells. Now he goes back to this goes back to when I was at JPMorgan Chase. And it was the financial crisis. And I was running a bunch of the consumer lending businesses amongst other things, and we made a bunch of mistakes in the home equity business. And very often in business, people are afraid to admit their mistakes. And they'll come up with a whole bunch of reasons why it's not so bad, or they'll blame it on someone else. And at one of our investor days, I stood up and I went through the problem. I said, Listen, here are the mistakes that we made. Here's what the result is. And here's what we're going to do differently. And Mike tells the story, because he said, you know, oh my God, that's you know, he stood up there, he talked about all the mistakes he made, he's gonna lose his job. And what he came to understand, and what I thought was important is it's just the opposite is people actually have more respect for you. Because they sit there and say, You're willing to recognize and learn from what you did wrong, you're gonna put it out there. Now you have to actually learn from it and do things differently in the future, but not walk away from the problems.

David Novak 43:30 

All right, that's a great story. Now on flip the script, what have you learned from winning, that you've applied into Wells Fargo? Listen,

Charlie Scharf 43:39 

you know, ultimately, I'm going to come to work every day because I want to win. And so I can talk about wanting to do the right thing. And I can talk about wanting to make people feel good. But I am competitive. Everything that we do is competitive. There's a judge out there. And so I'm not shy about wanting to tell people that we're not winning today. And we should be winning, and I want to win. And we're gonna do everything it takes within the way we want to run the company within the principle, we want to run the company to get there. And you know, I'm going to be the one leading the charge, I'm going to be the one working the hardest, I'm going to be the one making some of the tough decisions. But if you just want to be okay, then this isn't the right place for you. You

David Novak 44:17 

know, at Wells, you just been, you know, knocking off the problems one by one. But I know you you don't think you've won the Superbowl yet, you know, how do you celebrate the first bounce?

Charlie Scharf 44:27 

It's incredibly important. Because, listen, the fact is, I mean, we still have some issues from the past that we haven't resolved. And when we look at the performance of the business, even though we're doing much better, and the stock is an all time high, we're not doing nearly as well as we could do. But I want people to understand that the things that we're doing are working, that's what's driving those improvements along the way. So it's really important to balance celebrating the success, but not declaring victory prematurely. So I'm always really, really clear. I feel really great about the progress that we've made. I'm incredibly proud of Have what everyone at Wells Fargo has accomplished. And by the way, they've worked incredibly hard to get there. And I want them to feel that and to be proud themselves. So then when people talk to them that they can actually feel that way. But at the same time, any celebration of success prematurely means that you're ultimately cannot take full advantage of that opportunity, or you're gonna go backwards. And so, you know, encouragement along the way, making people understand that, hey, we've got this, we know how to get this done. And you're the right team to do it. Keep going forward. And there's that balance, but both sides are important.

David Novak 45:34 

Yeah, Charlie, it's been so much fun. And I want to have some more with my lightning round of questions here. So you're ready for this? Yes. All right. What three words best describe you?

Charlie Scharf 45:43 

Honest, hard working? Family, man.

David Novak 45:47 

If you could be one person for a day besides yourself? Who would it be?

Charlie Scharf 45:52 

I think it'd be fun to be president United States for a day.

David Novak 45:55 

What's your biggest pet peeve

Charlie Scharf 45:57 

is not dealing with reality.

David Novak 46:00 

Who would play you in a movie?

Charlie Scharf 46:02 

Oh, I don't know. I you can answer that? Well, I've no idea.

David Novak 46:05 

Gotta be Charlie Sheen. Come on.

Charlie Scharf 46:09 

There's good and bad that comes to that. He's a complicated guy.

David Novak 46:13 

How long did it take you to learn to play the guitar? Not

Charlie Scharf 46:17 

long, but I was very musical growing up. But having said that, I'm so far from where I want to be. What's

David Novak 46:24 

your favorite song to play in the guitar?

Charlie Scharf 46:26 

Laila? Can you sing? Not? Well,

David Novak 46:29 

you've got an hour to yourself, or you woodworking or playing the guitar playing the guitar? If I turn on the radio in your car, what would I hear? You'll

Charlie Scharf 46:39 

hear Spotify radio, which would be something like Rolling Stones, dire straits, something from the classic rock era

David Novak 46:47 

was something about you, few people would know. I'm very sensitive. What's one of your daily rituals, something that you never miss? My

Charlie Scharf 46:57 

morning time. Every morning, doesn't matter whether I'm, I have to leave really early to travel doesn't matter whether I'm an exercise, or I've got to get into work a certain time. I need an hour in the morning, drinking my coffee, reading papers and just being with myself.

David Novak 47:14 

Great lightning round, Charlie, and we're about to wrap this up just a few more questions for you here. You're on the board of Microsoft, what have you pulled from that experience that's made you a better leader?

Charlie Scharf 47:25 

You know, that's a great question. Because it's been an amazing experience for me, and I'm privileged to be able to be there. I think what I've experienced two things. Number one, I think with with all great boards, that you get the opportunity to see a bunch of people from different industries, think about issues in ways that you don't necessarily think about them. So we've got people from the beverage industry, you got people from the technology industry, we have people from the pharma world, and to see how they approach an issue. And it's a different way of thinking which gets you thinking differently, because we all grew up a certain way to see how other people tackle an issue that have grown up differently. And the second is, honestly, it's just watching the intelligence of the folks at Microsoft. First of all, they are incredibly smart. They're always thinking about tomorrow, with all the success they've had, whether it goes back to when Bill Gates founded the company, or the success that Satya has had, since he became CEO, they don't talk about that they talk about what they should be nervous about what the opportunities are, and what they're going to do to for tomorrow. And it's that drive, it's that ambition, and it's just that application of that raw intelligence to actually bring it come together in a way which makes that company far more successful. Each successive year, you know, such

David Novak 48:48 

a Nadella, he basically wanted to transform the culture, as I understand that from a were a know it all culture to a learn at all culture. How is he done that from as you've watched it? From

Charlie Scharf 49:00 

my perspective, it's him. People see, that's who he is. And so you're absolutely right. But he starts with, I think I know a lot. But there's a huge amount, I don't know. And so whether it's asking questions of the board, whether it's asking questions in the management team, asking the people on the management team questions that they don't know the answers to, and to create a very safe environment, to say, we don't know everything, what can we learn from others. And again, when you meet him, when you see him in action, you just you can't not notice that and that becomes the standard.

David Novak 49:33 

You know, you and your wife Amy, you have two daughters. How do you lead at home, Charlie?

Charlie Scharf 49:39 

I don't know if I lead at home. I feel it this first of all, I do have my daughters are 29 and 27. They're fabulous. And my wonderful wife. And I think back to you know what I described when I was a kid in terms of what that unit is like we're a unit and every one is important. One of the things that my wife and I are very proud of is that that they want to be around us. And not just because they get a free meal every once in a while, think they like spending time with us. They like having dinner, they like us seeing their friends. And so for me, I think it's very much about respecting their space. But also making sure that you strike that right balance between being a friend to them, but also providing the counsel where they need and in a way that they actually want you part of their lives.

David Novak 50:27 

All right, last question, what's one piece of advice you'd give to someone who wants to be a better leader? Your

Charlie Scharf 50:34 

ability to lead is based upon your willingness to listen to the feedback that people have for you, that you can think that you are doing the right thing that you're providing the right kind of counsel, you can probably in the right kind of direction, but people will tell you exactly what they think it's no different than if you want to get ahead in your career at any point in time. There's no better person to do that than yourself. There's a huge amount of information out there, there are people that are available to help you. And the same thing is true when you're a leader, which is asked the question, which is how do people feel about working with you? What can you learn from what people have to say or what other experiences they've had. And then at the same time, I think you just have to recognize that sometimes leaders have to do unpopular things. And so it's not a popularity contest, there's a fine line between, you know, when you're a leader, I said this before, right people sometimes when the outside think you're the leader, you can do anything you want. And you know, that's true up to a point. And sometimes, you know, that can lead to either a very small revolt or a very large vote. So you have to earn the right to be a leader. And so that means that people have to want to follow you, they have to believe that you just don't have the intelligence so that you've got the plan, but that you're the person who's going to treat everyone the way they want to be treated. And again, if you ask people how you are performing on these different dimensions, they'll tell you. And for me, I'm always recalibrating that and I'm lucky, I'm surrounded by a management team that tells me all the time, they'll tell me, it's not every hour, it's not every day. But if I'm doing a little bit too much, I'm being a little too tough on people, I'll get that and say listen, we understand tight, you know that we got a lot to get done. But you might be pushing too hard. Or it could be the opposite extreme, or it could be you're being you know, you're too difficult on this issue and not recognizing the progress and the power of all that information. If you're not tapping into that, then you're just missing something. And you're not going to be the kind of leader that the people want to be surrounded by.

David Novak 52:45 

You know, Charlie, you are a great leader. You've had enormous success. Congratulations on all the progress that you've made it Wells Fargo. But if I had to sum you up, from my perspective, is that you've got that uncanny combination of confidence that you have to have as a leader combined with humility. And that's what I see in the very best. And I thank you for sharing your insights with us today.

Charlie Scharf 53:10 

I appreciate that very kind, David, thank you.

David Novak 53:22 

No doubt about it. There's a lot of great stuff we can learn from Charlie from this episode. For one thing, he reminds us that leaders cast a shadow, and that people will do what you do not necessarily what you say. So set the right example, make sure the values and priorities you say are important are reflected in what you actually do. People will notice and follow suit. Now to really make this learning count, you've got to apply it. So think about the actions you've taken at work in the last day or so. How do they reflect the priorities you set for your team? If there's a disconnect, ask why and what you need to do about it. So do you want to know how leaders lead what we learned today is the great leaders set the right example. Coming up next on how leaders lead as we'll get era, the former owner of 11 Madison Park, one of the most renowned restaurants in the world, and rank at the very, very top.

Will Guidara 54:23 

But the end of the day, you can't lead a group that isn't willing to follow you and one of the best ways to get people to follow you as if they trust you. And it is so much easier for people to trust you if they know you and feel known by you. So be

David Novak 54:40 

sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business. So the You will become the best leader you can be