No less than in the other pending megamergers, technology must figure in the Norwest-Wells Fargo deal, and that makes C. Webb Edwards the man in the middle.
Mr. Edwards, 50, came to Norwest Corp. as chief technology officer in 1995 from First Interstate Bancorp, where he was overseeing a comprehensive five-year system upgrade.
Mr. Edwards brought several former First Interstate employees with him, and now they can expect to return to the West Coast where, even after its 1996 acquisition by Wells Fargo & Co., First Interstate still has a legacy.
That defunct Los Angeles company was one of the first in the industry to consolidate a vast multistate banking network under a common system. But much of the effort was for naught when Wells Fargo came in with strong ideas of its own and a mandate to put its methods in place within a year.
Chastened by system failures, customer defections, and operating losses, Wells Fargo officials vow not to repeat their mistakes. Wells and Norwest said they will allow three years to integrate all aspects of the two organizations, which they see resulting in $650 million in annual savings.
The two banks come in with very different strengths. Norwest has a commanding edge in the pursuit of elusive "wallet share," with 3.8 relationships per customer and a stated goal to double that.
Wells Fargo is noted for alternative delivery systems, including hundreds of supermarket branches and an industry-leading Internet banking service with almost 500,000 customers.
These nonoverlapping, arguably complementary profiles could complicate the technology aspects of the merger.
Wells Fargo has generally preferred custom-developed software, while Norwest relied on off-the-shelf packages for such key functions as demand deposit, commercial loans, and general ledger.
Some observers said unfortunate timing, not cultural differences, cursed Wells Fargo's integration of First Interstate. One former Wells Fargo technology official, quoted here on condition of anonymity, said "the problem with Wells' previous integration wasn't that it couldn't happen, but that it was rushed. It was all about time frames and doing it quickly."
Ten years earlier, Wells was praised for the way it handled Crocker National Corp., a textbook in-market merger in which it cemented its reputation for efficiency.
"We tried to structure this (the Norwest transaction) so that we absolutely minimized the execution risk," Wells chairman and chief executive officer Paul Hazen said Monday. "We have had some experience that makes this absolutely essential."
Because of the hostile nature of the First Interstate acquisition, "we ended up with a situation in which more than 500 top people had an incentive to leave the company," and the brain drain hurt, said Mr. Hazen, who is to be chairman of the new Wells Fargo in San Francisco.
"We tried to integrate too rapidly, too quickly," he said. "We did entire systems and operations in four months, and that was too fast."
Downplaying the differences between Norwest's focus on branch offices-it has twice Wells' number-Mr. Kovacevich said "the marketplace wants both ways to deliver services and will determine which approach is better" according to individual circumstances.
As issues of culture and technology play out, top officials will probably lean especially hard on Mr. Edwards, who is familiar with the technology and operational procedures at both Wells and Norwest.
"First Interstate are Norwest were very comparable," Mr. Edwards said in an interview Wednesday. "They were service- and customer-oriented, ran a lot of the same technology, and I think it has got to help to have people who came out of the old First Interstate franchise, whether at Wells or at Norwest."
Mr. Edwards was hired by Norwest chief executive officer Richard Kovacevich in part to rein in Norwest's decentralized operating systems. Mr. Edwards had spent 11 years at First Interstate and before that worked at Mercantile National Bank in Dallas.
"Many of the things that we were accomplishing at First Interstate were also things that were very high priorities for Norwest," said Hayden D. Watson, another First Interstate veteran who is managing director of bank operations at Fleet Financial Group of Boston.
Among those goals was a gradual consolidation of processing sites to a facility in Phoenix.
Of Mr. Edwards, Mr. Watson said, "His responsibilities at Norwest and his familiarity with what ultimately became the systems at Wells Fargo will allow for a very smooth transition."
"During a multiyear project, he pared the number of different operating systems at First Interstate from 11 to six, four, two, and finally one," said Diogo Teixeira, president of Tower Group, Newton, Mass.
He said Mr. Edwards is a major contributor to the "evolving industry expertise" about the best way to conduct integration efforts.
Mr. Edwards' team has been seasoned by more than 30 bank mergers. The technology executive said his group over the past three years has made 33 system conversions, each with a total of 81 applications.
"Norwest has been a little more pedestrian (than Wells) about the business, but it paid attention to the factory," said M. Arthur Gillis, president of Dallas-based Computer Based Solutions Inc.
"Norwest has the track record, the capability, and the people to be the winner in technology," he said. "I have no problem putting my money with them in the technology arena because they have done it better than Wells."