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Author: Todd Henneman

Posted on March 1, 2005June 29, 2023

Wells Fargo’s Diversified Assets

The 300 top leaders of Wells Fargo & Co., the nation’s fifth-largest bank in terms of assets, met for two days in late January to discuss what the 146,000-employee company considers its most important competitive advantage: its people. The annual Connections Conference focuses on the role that senior leaders play in engaging team members in living its values and achieving the company’s vision and strategic initiatives.



    Many firms herald their talent as their differentiation, but Wells Fargo has a record to support its rhetoric. When the financial services company posted a profit of $7 billion for fiscal 2004, an increase of 13 percent compared with 2003, CEO Dick Kovacevich rewarded employees with a special contribution in Wells Fargo common stock to their 401(k) plans. And despite a massive merger, the company minimized layoffs by retraining staff.


    At the Goldman Sachs Bank CEO Conference in December, Kovacevich said that “everything we do at Wells Fargo starts with our people. Why? Because when people are properly incented, rewarded, encouraged and importantly recognized, they provide better service, generate more sales and produce even better business results. This generates more revenue, which results in greater profits.”


    Wells Fargo wins the 2005 Optimas Award for General Excellence for its workforce management strategies that successfully integrated two companies, fostered revenue growth while retaining talent and held employees to high ethical standards. Here are highlights of the company’s work in six Optimas categories:


    Partnership: While human resources professionals at many companies struggle to be treated as business partners, that partnership has been enshrined at Wells Fargo. They are part of all key meetings and are expected to have as much of a voice about the strategy and direction of the business as they do about human resources practices.


    “The question about HR being a business partner is not a question at this company,” says Patricia Callahan, executive vice president and director of human resources. “It hasn’t been a question for a long time. The HR function is critical to maintaining the staff and maintaining the culture that drives the company.”


    Managing change: This is a proven skill at the growing company, which is itself the result of a merger. In 1998, Wells Fargo and Norwest Corp., a Minneapolis-based bank, agreed to a “merger of equals.” The combined entity adopted the name Wells Fargo, one of the best-known in banking, and moved its headquarters to San Francisco. Kovacevich, Norwest’s CEO, became CEO of the new Wells Fargo.


    Outsiders questioned the cultural compatibility. Norwest had relied on a “community bank” approach based on customer service. Wells Fargo had emphasized efficiency, favoring supermarket branches over full-service facilities.


    Upon the merger, a team with members from both predecessors analyzed the two cultures. Wells Fargo then purposefully planned its new culture and proceeded at a deliberate pace to minimize missteps. “We were very clear going forward that this is the blueprint for the future,” says Holly Kurtz, vice president of talent management, learning and development. “Then everything we did reinforced it.”


    Since then, the company has acquired 60 firms, such as Utah’s largest bank, First Security Corp. Employees of acquired banks are paired with “buddy bankers” from Wells Fargo, who help instill the company’s vision and values.


    Innovation: Executives vowed that the 1998 merger would not lead to mass layoffs. Instead, Wells Fargo practiced what it calls “retain and retrain,” a philosophy it still follows. The company retained and reassigned two-thirds of employees whose positions were eliminated as a result of the merger. Head-count reductions occurred primarily through a hiring freeze and attrition.


    “It’s not that we guarantee that we never do layoffs,” Callahan says. “We don’t do that. But in every case, we do our best to open up opportunities for the individuals who are affected. We never want to be in the press saying, ‘Wells Fargo saves X million dollars by laying off thousands of people.’ We don’t believe that is good for us, for our team members, for our customers, for our shareholders, for anyone.”


    Service: Instead of focusing on cutting costs, Wells Fargo concentrates on growing revenue. CEO Kovacevich identified cross-selling among its 80 business lines as an opportunity for growth. Workforce management plays an integral part in cultivating that strategy across product lines and geographies. Employees can earn bonuses for achieving collaboration goals.


    “And people’s careers are tied to it,” Kurtz says. “If they don’t partner, if they don’t collaborate, they’re not the ones promoted.” The result is that consumers had an average of 4.6 products with Wells Fargo in 2004, compared with three in 1998. TowerGroup Primary Market Research puts the industry average at 2.4.


    “Kovacevich’s strategy at Norwest, which he brought to Wells Fargo, was: ‘Don’t worry about reducing costs. Focus on increasing revenue,’ ” says Charles O’Reilly, professor of human resources management and organizational behavior at the Stanford Graduate School of Business. “That’s a cultural issue. The execution really is in the people.”


    Vision: With success dependent on talent, employee development and succession planning receive attention at all levels, from the board of directors to the business-line managers. Wells Fargo introduced a talent-management process that brings together the top 25 people in the company, business-line managers and human resources leaders. They meet three times a year to discuss such topics as key openings and cross-group moves. Once a year, the business-line managers meet with the human resources director and CEO for a talent review, a workforce analysis akin to a budget review.


    Ethical practice: Wells Fargo takes ethics seriously. Its Code of Ethics and Business Conduct details policies and standards for employees, covering everything from maintaining accurate records to participating in civic activities. Every year, employees also receive ethics training. Anyone in the company can ask questions or report breaches anonymously using an ethics hot line or special e-mail address.


    The company is not timid about firing violators, dismissing at least 100 people a year for misconduct ranging from conflicts of interest to cheating on incentive plans.


    “I’m the biggest soft touch in the world,” Callahan says. “But when someone lies or cheats, you can’t have people like that representing us to our customers, whose trust is all we have.”


Workforce Management, March 2005, pp. 42-43 — Subscribe Now!

Posted on December 6, 2004July 10, 2018

Acceptance of Gays, Lesbians Is A Big Part of Kodak’s Diversity Picture

Laura Brooks, a former regional manager for logistics at Eastman Kodak Co., recalls her first inkling that the workplace might feel hostile for gay co-workers.



    The company was conducting a culture audit of the warehouse and distribution operation and took pains to ensure anonymity when planning a focus group of gay employees. A consultant, not someone from Kodak, would facilitate the meeting. It would be held off-site so co-workers wouldn’t see participants. And invitations would be sent through the gay employee resource group.


    “Despite all of the effort to maintain confidentiality and to do it in a way we thought would be safe for people, nobody came,” says Brooks, now operations manager for Kodak’s engineer design center. “That was our first data point.”


    To understand what gay employees might be facing, Kodak asked other focus groups–based on everything from years of service to race–whether they thought that they had any gay co-workers and whether gay jokes were part of the usual workplace banter. “It validated that there was a pretty good dose of harassment,” says Brooks, who became involved in gay diversity programs at Kodak after her best friend and co-worker came out as a lesbian, telling Brooks that keeping the secret had been a burden to her.


    “We had made some progress on gender and race in our community,” Brooks says, but harassment toward gay, lesbian, bisexual or transgender employees “still was rampant.”


    Brooks worked with peers at Kodak to curb harassment and educate employees about their “GLBT” co-workers. The acronym stands for gay, lesbian, bisexual and transgender. The last is a blanket term for transsexuals and others who cross gender lines.


    Unlike managers in some organizations, Brooks had ample resources to achieve her goals. Kodak offers a novel approach to diversity training and a wide range of programs. The company has not one but five education programs that address workplace inclusion of GLBT employees. They’re available to any work group in or near Rochester, New York–from the senior management team in Kodak’s world headquarters to the third shift in the sprawling Kodak Park manufacturing complex.


    CEO Dan Carp has declared diversity as a business imperative as the company cultivates teamwork, and the GLBT initiatives are just one part of a comprehensive effort encompassing myriad dimensions of diversity. Employees risk termination for practicing any kind of discrimination or harassment, and Kodak has fired employees who have acted counter to its GLBT policies. Managers emphasize, however, that attending the gay-awareness programs is voluntary. The training complements a workplace strategy Kodak calls its Winning and Inclusive Culture, which outlines the basis of teamwork and serves as the social foundation of the Kodak Operating System, the company’s lean-manufacturing framework.


    “If you don’t have a workplace that is free of harassment, free of mistrust and free of disrespect, the teamwork that leads to breakthrough ideas–the creativity (that fuels) the productivity solutions–isn’t going to occur,” says David Kassnoff, manager of communications and public relations.


    The result: The company has eliminated waste and improved productivity in manufacturing and finance, Kassnoff says, though he declines to provide statistics or specifics because of competitive reasons.


    Kodak’s commitment to diversity also helps it attract and retain a diverse workforce, Kassnoff says. The company’s efforts have earned it a perfect score on the Corporate Equality Index published annually by the Human Rights Campaign, the nation’s largest gay rights organization. And Kodak executives believe that providing equitable treatment toward gay employees makes Kodak products more appealing to the 14.2 million domestic gay consumers, who tend to be brand-loyal.


    “They clearly are doing a lot of things right,” says Selisse Berry, executive director of Out & Equal Workplace Advocates, a nonprofit organization that supports GLBT workers and has honored Kodak for its inclusive policies. “The fact that Kodak is in Rochester, New York, also speaks volumes for the work that they’re doing, because they’re not in a huge metropolitan area where (GLBT programs at work are) ho-hum. It still is a big deal in Rochester, New York. And it is a very, very old and traditional company.”


Biases persist
    Whether in liberal metropolitan areas or more conservative communities, national attitudes about working with and for gay men and lesbians have remained relatively consistent in recent years, painting a mixed picture of workplace coexistence among gay and straight workers.


    In July, marketing firm Witeck-Combs Communications and research firm Harris Interactive surveyed 2,242 Americans, 6 percent of whom self-identified as gay, lesbian, bisexual or transgender. Forty percent of GLBT respondents said they were treated fairly and equally in their workplaces, echoing results from 2002, while 22 percent of heterosexuals–the same share as in 2003–said they would be uncomfortable working with GLBT co-workers. It’s hardly easy terrain for employers, who are trying to hire and keep the best employees, regardless of their sexual preferences.


    “Corporations understand the value of making sure they can attract the best and brightest workers,” says Wesley Combs, president of Witeck-Combs, which specializes in marketing to the GLBT community. “In order to have the best and brightest, they have to create an environment that respects all people, regardless of sexual orientation, race, family structure.”


    Much of Kodak’s training to create such an environment was developed after employees formed the Lambda Network, a gay employee resource group, with the encouragement of George M.C. Fisher, then-president and CEO of Kodak. In 1995, the group held the first Lambda Network Education Event, a night of skits and speakers focusing on gay workplace issues. “The president of the company asked senior leaders to attend,” says Patti McGory, president of the 100-member Lambda Network. “It ended up being an extremely favorable turnout and a great event. We have benefited from it since that day. Each president of Kodak has been extremely supportive.”


    The company’s commitment to its GLBT employees occasionally causes some consumers to stop buying its products. “Frankly, we don’t get a lot of those e-mails,” says Kassnoff, adding that such objections have not created a business issue. “When we do, it usually comes as a result of some misinformation published on someone’s Web site.”


    Activists from fundamentalist organizations such as Concerned Women for America, which denounced these diversity programs as supporting “ghastly” consequences, have criticized Kodak for offering domestic-partner benefits. But the accolades the company has received “far outweigh the occasional criticisms,” Kassnoff says.


    One of the first places any Kodak employee hears about sexual orientation is a series of presentations called the 52 Weeks: Diversity in Action Conversation Series, administered worldwide by Kodak’s global diversity and community affairs office. The series explains the company’s mission, the business case for diversity and its corporate values of respecting and valuing differences, including sexual orientation. “It’s sort of an entrée to GLBT issues,” says Antonia Bernard, director of diversity initiatives. Kodak seeks an “inclusive environment in which employees leverage diversity to achieve company business goals.”


    Departments can request a more in-depth session called “Can We Talk?” “It was the brainchild of a couple of Lambda members who thought about how they might create a safe environment for individuals to learn about GLBT issues and ask all of the questions that they may have been afraid to ask,” says Lambda’s McGory, a finance director at Kodak. “It continues to be our most powerful education tool.”


    In addition to answering questions, McGory and others share personal stories such as the extra anxiety they’ve experienced when starting new jobs, unsure how they would be treated because of their sexual orientation. “It’s made a huge difference in my life, in my being able to feel comfortable talking about my family and issues that affect me with people in the workplace,” says McGory, who joined Kodak three and a half years ago. “It is safe to be who you are, and the opportunity to grow here is equal for all.”


    Kodak also offers “advocate training,” a nine-day session that includes workshops on such topics as developing awareness of racism and sexism. One day focuses on how straight employees can become allies for their GLBT peers. Graduates are offered magnets to display which indicate that GLBT colleagues should feel safe coming out to them and turning to them for help.


Fun but informative
    One of the newest additions to the portfolio of GLBT education programs is modeled after the game show “Hollywood Squares.” Straight and gay peers sit next to, above and below one another on a portable set built out of pipes, curtains and risers to create the giant tic-tac-toe board. An emcee asks the nine “stars” questions such as “What percentage of the approximately 64,000 worldwide Kodak employees are estimated to be gay or lesbian?” and “What percentage of Fortune 500 companies offer health-care coverage to domestic partners of employees?” Managers call it fun but informative.


    All of the training was developed in-house, guided by the Lambda Network. Kodak conducts its Diversity in Action Conversation Series globally and will begin offering its advocate training to global operations in 2005. General Motors Corp. and several other companies have emulated Kodak’s approach to GLBT training, particularly the “Can We Talk?” sessions.


    Kodak logistics manager Brooks and her team tapped all of the GLBT resources available after seeing the warehouse’s culture audit. “We started at the top with our leaders,” Brooks says. “Then we developed an ally base. Then we went to the shop floor and provided a GLBT 101 in the ‘Hollywood Squares’ game-show format, and we delivered that to our shop floor across all three shifts.” The education used internal resources. All associates undergo renewal training each year.


    Informal follow-up surveys have provided what Brooks calls “a cautiously optimistic sense that things are getting better. We’ve also had three people in leadership positions come out and begin functioning as out-of-the-closet leaders in our community. They clearly are in a different place than they were before we started our GLBT education journey as an organization.” wƒm


Workforce Management, December 2004, po. 68-70 — Subscribe Now!

Posted on May 29, 2004July 10, 2018

Diversity Training Addresses Sexual Orientation

Ryk Koscielski, a project manager at Lucent Technologies, spent years worrying that colleagues would learn his secret.



    He would be vague when asked about his weekends. He would refer to his same-sex partner as his roommate. And he would attend company parties alone. “I put a lot of energy into hiding personal information,” he says. “I thought that once I was out as a gay man, I wouldn’t have many opportunities for promotion.”


    Then his department attended a diversity session on sexual orientation. The day inspired him. After working with them for nine years, Koscielski told co-workers that he was gay. “It helped me personally and professionally to be comfortable at work,” Koscielski says, “and it helped my self-esteem.”


    Lucent, a leading global supplier of communications-networking equipment, is among a growing number of companies whose diversity training addresses sexual orientation. The Human Rights Campaign’s 2004 Corporate Equality Index, which evaluated how 379 companies treat gay employees, found that 76 percent of those companies offer diversity training on sexual orientation, compared with 53 percent in 2002.


On par with race
    Since coming out in 1994, Koscielski has become the co-president of EQUAL!, Lucent’s group for gay, lesbian, bisexual and transgender employees. EQUAL! offers three educational programs: GLBT (gay, lesbian, bisexual and transgender) 101, which covers terminology and explains why the company is broaching the topic; GLBT 201, in which gay employees share personal stories and explain laws; and Transgender 101, which discusses topics like sex changes.


    “For many years, ‘diversity’ meant looking only at racial, ethnic, gender and women’s issues,” says Selisse Berry, executive director of Out & Equal Workplace Advocates, a nonprofit organization that has offered sexual-orientation diversity training since 1990. “Often diversity trainers felt uncomfortable talking about LGBT issues.”


    Gradually, workforce policies are treating sexual orientation on par with other dimensions of diversity, such as race. Some companies embrace gay training because of philosophical beliefs in equality. Others see it as a way to foster teamwork, enhance productivity or woo gay consumers. The 15 million gay men and lesbians in the United States comprise a $583 billion market, according to consumer-market researcher Packaged Facts and marketing firm Witeck-Combs Communications.


    Whirlpool, the No. 1 U.S. home appliance manufacturer, ensures that employees understand the buying power of gay consumers by devoting a training module to the business case for diversity.


    Whirlpool held a weeklong Diversity and Inclusion Summit in May to launch the next phase of its diversity program. “We saw that people didn’t understand the concepts of diversity and inclusion, what their roles were in this space and how they contribute to our company,” says Angela Roseboro, director of global diversity. “We devoted a week to learning about diversity–what it was, what it wasn’t, what we are trying to accomplish and how we can build a culture of inclusion.” Sexual orientation was covered during the summit and in periodic lunch-and-learn discussions held subsequently.


    Chubb, one of the nation’s largest property-casualty insurers, introduced gay-specific diversity training in 1995. A half-day session called Understanding Gay Issues in the Workplace explained how homophobia affects employees and compared myths with facts. A full-day session called Managing Gay Issues in the Workplace used role-playing and case studies to prepare managers for issues such as subordinates coming out.


    This year, Chubb began a mandatory program, dubbed Count Me In, about understanding “micro inequities.” The term, coined by adjunct professor Mary Rowe of the MIT Sloan School of Management, describes subtle forms of discrimination such as failing to introduce a gay peer or ascribing the idea of a woman to a man.


    “There has been no backlash to the training,” says Kathy Marvel, Chubb’s chief diversity officer. “Chubb has been very specific in saying we are going to treat all employees fairly. It’s non-negotiable as one of our values. We have a clear commitment from the CEO down.”


    Pacific Gas & Electric, which serves Central and Northern California, began on-site sexual orientation training in 1991 and covers the topic in its new-employee seminar, held at PG&E’s San Ramon Learning Center. “There were a lot of myths, even here in San Francisco, that gay rights were more than equal rights,” says Dan Barber, president of PG&E’s GLBT employee resource group.


    Diversity consultant Liz Winfeld, author of Straight Talk About Gays in the Workplace, has seen two common mistakes when companies add sexual orientation to their diversity curriculums.


    “They don’t bother to find out what’s really going on in the workplace from all points of view–from their gay employees, their straight employees, people who are in favor of such programs and people who are opposed,” Winfeld says. “And you really shouldn’t roll out an educational program until senior management has gone through some version of it. So when people look up and say, ‘Why should be doing this?’ senior management can say, ‘We did and we got a lot out of it.’”

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