Blinded By Profit: Lessons from Wells Fargo

We all read the headlines and say to each other, “Can you believe what happened at Wells Fargo?” The thought bubble we don’t say but often feel is something like, “Those idiots.” We wonder,  how could people lose their way so significantly and do things like sandbagging (refusing to open accounts for customers until the next quota period,) or open unauthorized accounts and then tell customers “it was a mistake,” and encourage employees to pitch families and friends to open new accounts at almost any cost?

It is easy to look at a company caught having a destructive culture of speculation and bad management and vilify the people involved. But while the ethical abuses in the name of profit such as we are seeing come out of Wells Fargo are egregious, the seeds of such things exists in every company with primary profit goals. There is much to learn from Wells Fargo about leadership courage and how easily any of us can lose our way.

  1. Incentives often start out innocently enough as a healthy goal but have real limits. Most corporations work to motivate employees, and incentives are a path to doing so. The problem is that sales incentives, on their own, are often untethered, transient, and shallow. When incentives become the primary (or only)motivator, as opposed to a greater good cause or an actual benefit to the customer, it is a slippery slope to hard selling and short term good feelings.
  2. Profit priorities, when not grounded in other values and goals, lack material meaning. Most companies want to turn a profit, but profit for profits sake is a cruel and shallow grave.  If a company makes money while at the same time using shoddy business practices, manipulating customers, or causing destruction  (environmental, safety, negative impact on people) they are creating a house of cards built on a shaky base. Any tiny shift can cause the cards to come falling down. Making money is fine, as long as it exists in synch with, not separate from, something real, with a purpose that actually matters to customers, to employees, and to the world. Wells Fargo has, in it’s nearly 200 year history, consistently overemphasized profit and underemphasized more central values.
  3. It is leadership’s job to notice and react to the double binds employees experience. When an employee has to make an untenable choice (i.e. make a commission to support my family or do the right thing) they often fall prey to oversimplifying their choice based on self-interest. Supervisors at every level, from the front-line to the C-Suite, are obliged to understand and notice the choices employees experience at work, and to help them sort through those choices that are hard, reducing double binds so that employees can actually do the right thing.
  4. Creativity, discretion, and judgment work when employees are given an expectation that they should use theirs. Employees are not machines, and most people, given the chance, will choose what is “right” to do when the values and priorities of the organization are clearly described. But employees will fail to do what is right when they are treated like cogs in a wheel who have no brain, no control, no wisdom, and no care for the customer.
  5. Employees copy what happens at the top, often unconsciously. Management doesn’t need to tell employees to commit unethical practices. They will do so automatically if it is clearly the path to success at an organization. Employees watch what bosses DO, much more than what they SAY. Without even knowing they are doing so, employees copy what the boss does. It takes a great deal of courage and energy to fight the inertia in a corporation of the actions modeled at the top.
  6. When a culture of safety does not exist, people can’t say what’s real. If speaking truthfully to power in any system invokes embarrassment, shame, ridicule, or exposure, people stop talking. Most of us want, above all else, to feel upright about our identity at work. If speaking up requires countermanding the system, being called out as an outlier, or the ridicule of our peers, very few of us will find the strength to do so.
  7. Money blinds us and blur the way. It feels good at first when money rolls in, even when it does so for bad reasons. Most of us can and will construct a story in our own heads of why what we are doing makes sense even if it compromises our values, especially when money is involved. It is up to senior leadership to expand the definition of what success looks like beyond money.
  8. Doing nothing is a destructive act but doing something can feel like it requires heroism. Hundreds if not thousands of employees at Wells Fargo knew, felt, and probably even spoke of the transgressions, manipulations, and bad practices that existed there. But to stand up to it, to be the one person who steps out to name that “this isn’t right” represented a monumental act of courage and a superpower cape, especially if the predicted consequences were loss of job and income. If senior leaders were not calling out the badness, how could junior/front-line employees be so brave?
  9. Customers suffer when employees lose clarity about what is right. Doing things “to” customers that are not in their interest (i.e. selling multiple accounts they don’t need, etc.) hurts customers in all ways. Companies have an obligation to focus on and relentlessly tell the story to employees at all levels that customers matter and that when they do what is right in their job, it is good for customers, and ultimately, good for the business.
  10. When the top loses their way, it is hard to self-right. Expecting non-leaders to be the ones to call out bad behavior is unrealistic. The deck is stacked against them as basic human survival needs often come into play (“I need this job to support my family.”) Leadership is, at it’s heart, a relationship between a leader and a follower and it is the leaders obligation to find and hold the way for what is right and true at work. And this includes leadership’s obligation to call each other (peers) for lapses in judgment that steer the company down a slippery slope.

I believe that the leaders at Wells Fargo started out their jobs well-intended and optimistic. I’m sure they did not intend to have events transpire this way, causing the company to spin out of control. It seemed, I’m sure, that the possibility of making money while offering services people wanted, was a no-brainer to company founders Henry Wells and William Fargo when they gambled on their big idea in the Gold Rush years (1840’s and 50’s.) Historically though, Wells Fargo’s relentless culture of profit has pushed aside even good intention.

Insidiously, over time, leaders there began to act in ways that likely contradicted their own values due to the caustic impact of tons of money. The consequences for stepping up were clearly high, so the leadership collusion to band together and not break rank with speaking truthfully about activities that were unethical became stronger than the private surety that something stank.  Elizabeth Warren calls Wells Fargo leaders “gutless” and I agree. We must always remember that it is the role of leadership to stay in touch with our gut, our deep knowing, of what is right an good and honest. These leaders are not idiots. They are human beings who lost their way and made small decision after small decision that took them far, far away from what mattered.  And the historical culture of the organization had few muscles for an alternative to self-correct.  This is not Wells Fargo’s first rodeo in the realm of overemphasizing profit at the expense of everything else. It is a warning to all leaders, at all levels to keep our eyes on what matters about our business beyond money. Always.

Moe Carrick