As Wells Fargo & Co.'s group executive vice president for California, Terri Dial has been put in charge of what is arguably the company's most important fiefdom.

The state accounts for $54.5 billion, or about 45%, of deposits held by the institution formed last year in the merger of Minneapolis-based Norwest Corp. and Wells Fargo of San Francisco.

"We have over four million consumer households here," the 49-year-old executive said in an interview. "California is a big upside opportunity."

Whether the new Wells is successful in its home state may not be apparent for some time. Wells Fargo and Norwest, which are now referred to inside the company as Wells West and Wells East, will not be completely integrated for at least two more years.

But Ms. Dial said Norwest's cross-selling philosophy and product offerings are already showing up in Wells West branches.

"Anytime we can start doing something that doesn't require a systems conversion, we'll do it," she said.

Wells West branches now offer mortgages, a product the bank has not sold since 1994. Norwest Mortgage, the largest originator and servicer of residential loans in the nation, had already been doing business in California, but only through builders, brokers, and real estate agents.

To staff the branches with mortgage specialists, Wells has begun an aggressive hiring push, Ms. Dial said. By yearend, it plans to have 500 new in-branch mortgage lenders.

"There's going to be a great partnership between mortgages and our store system," Ms. Dial said.

So far, Wells West branch employees seem pleased with the results. A Southern California branch manager who asked to remain anonymous was literally bubbling with excitement about having a mortgage lender in his bank office.

"I had a gentleman in here talking about an equity line who mentioned he was in the process of buying another house," the manager said. "For the first time, I was able to say, 'I have a mortgage representative right here who can help you out.' It's a marvelous thing."

Other Norwest products are to be rolled out in California soon. Late next month, Wells West plans to promote credit life and auto insurance for the first time. Further down the line, life insurance and consumer finance products are to be offered in California branches.

Changes at Wells West are not limited to new products. The company is also trying to imbue the old Wells Fargo with some of Norwest's strong sales orientation. For the first time, the amount of profit each salesperson generates per day is being tracked in California, Ms. Dial said.

"Letting an employee know how much in incremental profits he or she generated for the company is the biggest driver of increasing cross-sell," Ms. Dial said. "I love that."

But Ms. Dial also is well aware of the pitfalls and difficulties that can emerge as two large institutions are melded, especially two with diametrically opposed business models.

Wells Fargo has traditionally been organized around lines of business. Norwest has run its franchise on a regional basis, with community banks operating autonomously in individual markets.

The merged bank will be a combination of both.

"We did an honest assessment of each other's strengths and weaknesses and then suggested a hybrid," she said.

As Ms. Dial described it, Wells' lines of business will recommend pricing ranges for each product and service, leaving the details to local market heads, such as the five California regional presidents who report to her.

"At the regional level, the real costs of funding and costs associated with risk aren't as transparent as they are at the line of business level," Ms. Dial said. "On the other hand, in a line of business, it is very hard to see the competitive landscape at a local market level."

The combination has its naysayers. Some observers said merging the two models and cultures successfully will be next to impossible.

"You have two antithetically opposed cultures coming together," said Hoyt E. Wilkinson, a managing vice president at First Manhattan Consulting Group. "If you pull this combination off perfectly, you have yourself a world beater. But I think there's a very small probability of pulling this off perfectly."

Even Ms. Dial questioned the logic of the deal when it was announced last year.

"I have to admit that my first reaction was 'huh?'" Ms. Dial said. "Their banking model is 180 degrees away from ours."

However, the logic became apparent quickly to Ms. Dial, although she acknowledged that blending the two cultures is not easy.

"It will be complicated, messy, and very, very hard to do, but once we're done, we'll have a competitive advantage that'll be hard for our competitors to copy," she said. "If we are successful, the strengths of one will be amazingly offsetting to the weaknesses of the other."

To help managers figure out how to navigate in the new environment, the bank has written a booklet referred to as the "rules of the road," Ms. Dial said.

The booklet, which is being tested by a handful of Wells Fargo managers, defines the new roles of regional managers, business line heads, and systems and back-office operations principals. A final version is expected to be issued to all managers this month.

"In mergers, you lose a lot of momentum while people sort out the new way things work," she said. "This booklet should help."

The new management team is trying to be sensitive to cultural issues, especially with the fresh memory of Wells Fargo's botched 1996 takeover of First Interstate Bancorp. Wells hastily tried to integrate that bank a mere four months after acquiring it, resulting in a sizable loss of customers and employees.

"In mergers, things like language, culture, and values can really kill you," Ms. Dial said.

Ms. Dial had been concerned that Norwest's warm and fuzzy lexicon, which includes terms like "team members," "stores," and "buddy banks," would put off old Wells employees

"We never used language like 'team member,'" Ms. Dial said. "It's not a California kind of thing. Californians are a step less cynical than New Yorkers, but only a step."

The language turned out to be a nonissue, she said.

"Some Wells West people thought that by adopting the Wells East language, we had lost," she said. "I said, 'Listen, they're taking our name, so we're taking their language.'"

Fortunately for Wells employees and their managers, this merger emphasized revenue growth rather than cost cutting. As a result, those who came from the old Wells are feeling just about as comfortable as bank employees can about the deal, Ms. Dial said.

For the moment, it appears that management has succeeded in assuaging the fears of Wells' rank-and-file.

One former First Interstate manager who stayed with Wells after the acquisition was impressed by a staff meeting in February with president and chief executive officer Richard M. Kovacevich and chief operating officer Les Biller.

"Kovacevich and Biller told us that they know that this is a monumental job and that if we need to buy more time, then we will," he said. "There is no massive rush this time around; my level of confidence is much higher."

Ms. Dial, a 26-year Wells veteran, is playing an important role in soothing employee fears, observers said.

"She is well respected among the Wells folks out west, so it's very reassuring to them that the new organization has picked her for such a huge role," according to R. Jay Tejera, an analyst at Dain Rauscher Wessels in Minneapolis.

Ms. Dial, who started out as a branch teller in San Francisco's Mission District, said she does all she can to be a bridge for employees to the Norwest world.

She and group executive vice president John Nelson of Norwest led a team to assess which pieces of each bank's retail model should survive as part of the new Wells Fargo. Working closely with Norwest people "gave me a much earlier understanding of their structure, model, and culture," she said.

"Because the frame of reference out here is the Wells West experience, at first blush things from the Wells East side can look funny or not commonsensical," she said. "But then I can say, 'Look, things in their world are like this, and this is why.'"

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