The recent Wells Fargo scandal is outrageous not only due to the scale of the fraud, but also the absolute lack of accountability by the leadership. Let’s just be clear, signing up millions of unsuspecting customers for new accounts to achieve sales goals is not a good business strategy for any company, on any day, on any planet.
In a well-considered Op-Ed piece in the New York Times the author rightly points out that the head of the division responsible for the fraud is not even remotely being held accountable. In fact, she is being “retired” with a golden parachute worth up to $125M, accompanied by her salary of $27M over the last three years. It sounds to me like she was rewarded for her “wonderful performance.”
Couple this with the fact the CEO, John G. Stumpf, said all of this was the result of bad employees plotting against the customers and the company – making him a “victim” as well – and we have one of the most spectacular displays of bad leadership in recent memory. Unfortunately, it’s not as surprising as it should be. This fraud didn’t happen overnight, in a vacuum. It is the result of the organization’s culture, led by Stumpf.
Good bad or indifferent, if you are the leader, “it’s on you.” Culture is the manifestation of the values you emphasize in the workplace, your style, and what you expect and inspect. Blaming employees that, oh, by the way, work for him, and then rewarding the manager in charge of the fraudulent team, tells us EVERYTHING we need to know about Stumpf’s values. Unfortunately, it’s a striking display of Intentional Culture. I would say it’s a result of “Unintentional Culture” if it were a few rogue players and when the scandal came to light, it was handled differently, but in fact, the leaders’ behaviors were in complete alignment with a culture that encouraged and rewarded this type of behavior. 5,300 employees doing something is not a “rogue” event, it’s a movement, that created results the leadership wanted and rewarded.
Culture is not only what people say, it’s what they do. Values drive beliefs, beliefs drive actions and actions become your reputation. For Wells Fargo, this reputation will affect its bottom line for a long time to come.
There is always a “culture” in any organization. As the leader, it’s on you to make sure it’s the one you want. Even if we give Stumpf the benefit of the doubt that he didn’t know exactly what was going on, he had to have seen the results. He saw the $200 million his personal stock appreciated over that time. But with those amazing results, there had to have been customer complaints. Two million fraudulent new accounts don’t get created without some level of customers questioning what was happening. Yet, nothing was done. As Theodore Roosevelt said, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” When it comes to doing the right thing, doing nothing is not an option.