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Wells Fargo’s John Stumpf: I Never Set Out to Be CEO

Off the Cuff

Growing up on a poultry and dairy farm on the prairies of Minnesota, John Stumpf, one of 11 children, learned a lot about hard work, competition and sacrifice. He shared a bed with two brothers. “I never got to sleep alone until I got married,” he joked with the Associated Press.

Life in that packed house also taught him a lot about teamwork.

“Even though we were very poor financially we learned the value of plural pronouns – we and ours…there wasn’t a lot of time for I, me and my,” he told Forbes.

Those early lessons he learned while surviving those harsh winters have stayed with him and he employs them now as Chairman and CEO of Wells Fargo. 

“We call our employees team members, and we think of them as our assets. We believe in plural pronouns, us, we and ours.”

It’s not as if he has a problem with possessive pronouns or with egos it’s just that at Wells he says employees are considered like family or treasured resources, “we always look to have a long-term relationship with our team member.”

When you meet him, you are instantly put at ease by his Midwestern charms and pleasantries. It would not be a stretch to imagine him as the owner of one of those long-gone, small town department stores; the kind where the owner knows everyone’s name and remembers their birthdays. Instead, he’s the highest paid CEO of a major U.S. commercial bank earning around $23 million in 2012. The bank he leads is the largest employer among U.S. banks with some 270,000 employees with an international reach serving 70 million customers in more than 130 countries.

His rise to the top came the old fashioned way – he earned it.

Starting from the bottom and moving his way up, Stumpf got his start in banking as a repo man at First Bank in St Paul, Minnesota. Fresh out of college, Stumpf used to get in to work at 10am and work until 5pm tracking down borrowers whose loans were past due. After a quick dinner, he’d change out of his banker suit and suit up for his second shift – hitting the streets where he would hunt down and seize cars, often working past midnight.

"When you collect bad loans…. you sure learn a lot about making good ones," Stumpf told Institutional Investors. You also learn a lot about the power of persuasion, persistence and desperation.

“You’d have these cars memorized. You would know there was a ’69 Buick of a certain color and the person was 90 days past due and wasn’t answer your telephone calls. You would track him down, call the tow truck and just as the car started to lift off the ground, out of the bar would walk a giant of a guy with two six-packs of confidence in him and he wants to know what you are doing with his car. Now that is exciting! You learned the power of persuasion,” he told reporters for the Forbes article, “The Bank that Works.”

Six years later, he joined Northwestern National Bank which became Norwest and quickly rose up the ranks to become the chief credit officer for Minneapolis. He went on to run various regions including regional president for Norwest Bank Texas where he led the acquisitions of 30 banks in the state with total assets of more than $13 billion.

In 1998 Norwest was scooped up by Wells Fargo in 1998. As the company grew, so did Stumpf's reputation and responsibilities. In 2002, Wells Fargo put him in charge of community banking five years later, he was named CEO.

“I never set out to be CEO. I always set out to be a good team member, a good colleague. I would say this job, while I love it and I'm privileged to work with all my colleagues, it is lonely,” he says then grins, “who do you go to lunch with and talk about?”

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Now at 60, Stumpf remembers those who gave him a chance and looks forward to growing the next generation of leaders.

“I think star performers are my favorite to manage and lead. Star performers are critical to any organization and the key is how can you capture their heart-share and their mind-share when they're on this fast track.”

So how does he do it?

“I'm from the school that great performers and great leaders create more great leaders. Give people other experiences, other responsibilities. Have them join organizations within the company and outside the company.”

One of the biggest stumbling blocks for a star performer Stumpf admits can be their boss.

“I think great bosses hire great people. ‘A’ people hire ‘A’ people but ‘B’ people hire ‘C’ people; they’re worried they might be shown up… they're concerned that that person might make them look bad.”

And when things go bad, they can go really bad.

“People leave their manager, they don't leave companies.”

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Stumpf told “Off the Cuff” successful managing is done in measured doses. “I always believe in three parts praise and one part pruning. In other words help people understand how valuable they are. Give them opportunities to grow at their speed.”

At the beginning of the financial crisis in 2008, Wells Fargo was considered one of the “good guys.” Its conservative lending policies had kept it out of the mire that had engulfed other big banks. But even Wells couldn't escape the crisis and borrowed $25 billion in federal aid (which it has since paid back) and agreed to a hastily arranged shotgun wedding to buy up and save Wachovia for $12.7 billion.

Its good guy image has come under scrutiny since the crisis as federal and state prosecutors sift through the wreckage of the housing industry, but Stumpf believes the people and the culture of the San Francisco-based Wells Fargo will prevail and that the lessons learned from the financial crisis is another, albeit brutal, building block to success.

“I'd rather trust someone and be disappointed than not trust someone and be disappointed. People need to know where the guard rails are. I want people to live within those guardrails but also make some mistakes.

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Every success that I know of was preceded by a number of mistakes. That's how humans learn.”

In mapping out a career Stumpf says you should look at it in three parts: one part is the company, one part is your boss and one part is you.

“Work for a company that you love, that shares your values. Work for a boss who cares about you, really cares about you. And then invest in yourself - you're the best investment you can make.”

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