Like millions of Wells Fargo customers, Lorraine and I have checked to see if we had any accounts opened with the bank without our consent. Like millions of Wells Fargo customers, we don’t trust them because they lied.
In today’s context, their Code of Ethics sounds absurd: Wells Fargo’s reputation as ‘one of the world’s great companies for integrity and principled performance’ sounds laughable in light of the scandal where employees opened millions of fraudulent customer accounts to hit product sales goals over the past 10 years. The Better Business Bureau (BBB) agrees, downgrading them to a C-, perhaps the most well-known brand ever to receive such a low grade.
The BBB rating is not the worst of their problems. A criminal investigation was launched last week in California to identify whether the bank committed felonies. Furthermore, some estimate that in addition to the $185 million fine, Wells Fargo will lose $8 billion in business.
Enter the Cleaning Crew
Wells Fargo fired over 5,300 employees involved in the fraudulent activity. The unit leader of the community banking division Carrie Tolstedt retired early, cutting short her plans to stay until the end of the year. CEO John Stumpf resigned a couple of weeks agoamidst allegations that he knew about the nefarious activity six years before he said he did – to Congress, under oath! Both of them forfeit millions in stock. Don’t feel too bad for the two of them, however, they still had plenty of money to take with them when they left!
For the employees left behind to fix the mess leadership left for them, it can be demoralizing. After all, how proud would you be to announce where you work at a crowded bar when it defrauded over two million customers? How inspired would you be by leadership that either didn’t know what was going on, or worse, did know but condoned it by doing nothing about it?
New Wells Fargo CEO Tim Sloan is on cleanup detail. On Tuesday night, he apologized to his employees, acknowledging that the scandal not only hurt customers, but employees as well.
Fixing a Broken Culture
Sloan admitted that the bank will hire ‘outside culture experts’ to help them figure out where they went wrong. As an outside culture expert, I say, ‘Good move’.
Wells Fargo emailed apologies to customers:
They offered a mea culpa via commercial along with a pledge to earn back customer’s trust:
Did you notice they disabled the comments on YouTube?
Disabling comments is another good move. Although it might have been interesting to read how many different ways customers could tell Wells Fargo where to go!
In both of these messages, Wells Fargo talks about eliminating product sales goals for their retail banking team. An essential step to creating a customer-focused culture is to change your Key Performance Indicators (KPIs). As global Customer Experience Consultants, we say that KPIs tied to your Sales Goals influence the culture to focus on its goals rather than on what the customer needs or wants. Same concept follows for incentives. If people get paid to sell more products, they will sell more products.
Before you judge foolish Wells Fargo, remember that product sales goals are a KPI that most organizations employ. Chances are that your company is making the same mistake that Wells Fargo is; it just hasn’t imploded on you. Yet.
If they want to change the culture, they need to change the KPIs to reflect their goals. Moreover, they should incent these new KPIs. Tying performance to positive reviews or rising Net Promoter Scores (NPS) is a way to get your team to focus on the customer rather than on the institution.
Banks all get into trouble at some point. Then, they cry crocodile tears while they tell us how they are going to change and put the customer at the center of everything they do. However, as soon as the news cycle changes, they carry on with business as usual.
Wells Fargo is the latest bank to wring its hands in despair wondering how they ever got into this mess. But there’s no need to despair; the reason is evident. There is a cultural problem.
Wells Fargo knows it. It remains to be seen if they will fix it, or when the next scandal takes over the Internet, carry on with business as usual.
