Driving friends to dinner one recent night, Paul Hazen slowed down as he entered an intersection. The driver of a car in the cross-street hesitated. The Wells Fargo & Co. chairman glanced once at the other driver and barreled through.

"Somebody's got to be first," a passenger recalled him saying.

Mr. Hazen feels the same way about his bank. For better or worse, he has put San Francisco-based Wells at the forefront of some of the biggest strategic issues in banking - from mergers to delivery of retail services to computerized credit reviews. In the process, the 55-year-old executive is playing an outsize role in shaping the industry's future.

Some of Mr. Hazen's moves are decidedly risky. For example, he is aggressively replacing traditional branches with smaller outlets in supermarkets and other stores. While this promises great cost reductions, no one knows just how many customers will buy into the vision.

Likewise, Wells is blanketing the country with preapproved loans for small businesses. While this could point the way for a revenue-strapped industry, the credit quality of such loans remains largely untested, especially in an economic downturn.

Then there was the hostile acquistion of First Interstate Bancorp, completed in April. Though the $11.3 billion deal has increased Wells' market clout, the human costs have been tremendous. The bank estimates that more than more than 10,000 jobs will have been eliminated by the third quarter of next year, to the alarm of some public officials.

But Mr. Hazen is keeping the pedal to the metal, completely confident in his own convictions.

"Yes, there's risk to what we're doing," he acknowledged in a recent interview. "But to stand pat with your hands in your pockets, and wait for somebody else to take the lead and then try to fit in behind them - when you're not even sure if they're doing it right - well, there's risk to that too."

It is for this decisiveness - the willingness to act where others might dither - that Mr. Hazen has been selected as American Banker's banker of the year for 1996. With the industry hurtling into an uncertain future, banks increasingly will need the kind of quick and courageous management that Mr. Hazen has been exhibiting in the extreme.

Though his initiatives have yet to fully play out, many analysts are cheering loudly.

"I think Wells is not only the best-managed banking company, but it's one of America's greatest companies," said Thomas K. Brown, analyst with Donaldson, Lufkin & Jenrette Securities Corp.. "It's the culture that takes a company from an average performer to a superior one, and that's what they have." The numbers support that. At the end of 1995 Wells Fargo was by far the most profitable of the 50 largest banks in the country, achieving a return on equity of 29.7% and a return on assets of 2.03% Those numbers have fallen as a result of the integration of First Interstate, but analysts remain firmly bullish on the company.

Just who is the man behind all this?

Though the brash moves Mr. Hazen has made since becoming chief executive officer two years ago may suggest a domineering personality, exactly the opposite is the case. Mr. Hazen - short, slight of build, and bespectacled - runs the company in an unusually open, collegial manner, observers and Wells executives said.

His relationship with his president and chief operating officer, William F. Zuendt, is described as a partnership, much like Mr. Hazen's relationship with his predecessor, Carl Reichardt. Mr. Hazen has left just about all of the company's highly ambitious technological forays in Mr. Zuendt's hands.

"He uses a team approach, as opposed to a hierarchical approach," said Paul Watson, vice chairman in charge of commercial and corporate banking. Mr. Watson, who has worked at Wells for 38 years, said in the past two years he has learned more about the company than he ever knew.

The layout of the headquarters building's 12th floor - home to Mr. Hazen and other senior executives - says much about the managerial style.

To facilitate communication and interaction, about a dozen average-sized offices, with exceptionally large doorless entrances, are situated around a common area where executives can't help but run into each other.

The design existed under Mr. Reichardt, but Mr. Hazen is adding some new offices to bring in more executives and has removed the few remaining doors. (Senior management used to be spread over two floors.)

Among other benefits of this approach is that bad news flows up to the CEO just as quickly as it may flow down.

"A lot of senior managements at other banks have this imperial nature, which fosters this idea that no bad news flows up until it's a disaster," said Mr. Brown. "Wells has instilled this culture where bad news should flow up, and they have disagreements, and nobody gets all hung up about it."

In contrast to Mr. Reichardt, his gregarious predecessor from Texas, and many of his industry peers, there is no swagger in Mr. Hazen's walk, no bravado in his voice. Friends describe him as unassuming, even shy. He acknowledged that he is "not the most social or outgoing person."

Among his passions: gin rummy and dominoes.

"He likes the gamesmanship of risk taking," said Lou Burnett, who runs an executive search firm in San Francisco and is a neighbor of Mr. Hazen on the exclusive Belvedere Island in San Francisco Bay. "Once he takes on the energy of the game, he intends to win - and usually does."

He also likes to read - and not just the historical tomes favored by many bankers. The last book he read was a love story, "The Notebook." The book, he said, "moved me."

But make no mistake - Paul Hazen is no softie.

"Underneath that modest demeanor are both nerves and intellect of steel," said H. Rodgin Cohen, partner at the New York law firm Sullivan & Cromwell, which was retained by Wells in the First Interstate takeover. As an example, Mr. Cohen recalled a moment last winter late in the bidding war for First Interstate. Wells had already raised its initial bid slightly after First Bank System Inc. of Minneapolis entered the fray, but it appeared that an additional increase would cinch the deal. Despite encouragement from several advisers to do so, Mr. Hazen wouldn't budge, Mr. Cohen said.

"He stuck to his guns, and it turned out that he was absolutely right," said Mr. Cohen.

Mr. Hazen, for his part, said the pressure-packed merger talks were not always fun. And the resulting staff cuts, he said, were especially wrenching.

"You can't sit here as a human being and ignore the fact that you have caused immense pain and suffering for a broad base of people, and not just for those that got laid off, but for those that remain," he said.

But the merger required the kinds of decisions that are necessary to make Wells not a mere survivor, but a "prosperous survivor."

Mr. Hazen knows plenty about survival. In 1983, he was nearly killed in an automobile accident on the Golden Gate Bridge. During nine hours of surgery on his leg, he received no anesthetic, because the doctors feared they might not be able to revive him.

His doctor told him he probably would not be able to walk again. The response was vintage Hazen.

"According to my wife, I became irate with the doctor and said he was fired and that I was going to get one that could fix it," recalled Mr. Hazen - who did just that. Within a month he was back at work, and it took him just six months to shed his crutches.

Mr. Hazen said that although the integration of First Interstate is officially complete, he believes Wells still needs another year to get its level of service back to predeal levels.

That around-the-clock work isn't preventing the bank from pursuing other initiatives. For example, it recently took a 30% stake in the Mondex USA smart card venture.

"There is no way to know how fast, or if, customer behavior will really change enough to undermine what historically has been a banking franchise and that is cash," Mr. Hazen said. "But if it does we want to position ourselves to be a participant in that ."

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