3 Major Factors that Contributed to Wells Fargo’s Toxic Sales Culture

Wells Fargo’s Toxic Sales Culture

What to Learn from Wells Fargo’s Toxic Sales Culture
We have seen it before…the kind of toxic corporate sales cultures that give rise to disasters like the VW diesel emissions cheating scandal or the public accusation that Amazon oppressively monitored its employees with the unrealistic and harsh expectation that they perform like machines on the floor. Now we have another major example of what can happen when a corporate culture goes horribly wrong…the Wells Fargo debacle.

Is the CEO Accountable for Culture?
As much as CEO John Stumpf in his testimony before the U.S. Senate Committee tried to explain away the unethical behavior of so many Wells Fargo employees, many feel he should be the one held accountable. Yes, he fired about 5,300 employees for creating unauthorized and bogus accounts. But most financial analysts agree that it was the corporate culture he created that failed, not just those employees.

Our Take on Workplace Culture
Corporate culture matters a lot…for good or for ill. Our organizational alignment research found that culture accounts for 40% of the difference between high and low performing organizations in terms of revenue, margin and employee engagement. An aligned culture can support a company’s success because employees are positively engaged; they operate with mutual respect; they live the company values and care about what they do.

The opposite is true in an unaligned corporate culture. Employees simply check in and out with little allegiance to the company or brand; they lack respect for their leaders; they do not aspire to high ideals nor do they feel they are encouraged to practice them.

Three Major Factors that Contributed to Wells Fargo’s Toxic Sales Culture
There are three major factors that contribute to a toxic culture and all three appear to have been present at Wells Fargo prior to the scandal:

  1. Unrealistic and unreasonable expectations of employee performance 
  2. Minimal accountability for questionable practices or behaviors
  3. An atmosphere where employees fear repercussions for speaking openly

Any one of these factors can quickly and systemically spread poison through the workplace through unaligned corporate beliefs, norms, assumptions and artifacts.

Unrealistic and Unreasonable Expectations of Employee Performance
If the news reports are true, it appears that Wells Fargo had unrealistic and unreasonable expectations of employee performance which contributed to employees secretly selling services to unsuspecting customers. When it comes to expectations, high performance cultures ensure that employees understand exactly what is being asked of them, believe that the performance expectations are fair and achievable, have the support they need to deliver on those expectations and know how they are performing compared to those expectations.

Minimal Accountability for Questionable Practices or Behaviors
It also appears that Wells Fargo’s culture created minimal accountability for the questionable practice of unfairly taking advantage of customers to meet sales targets. Your corporate culture and values dictate how employees behave and what happens when unethical behavior occurs. Getting caught creating over 2 million phony and unauthorized accounts to hit sales targets and receive bonuses screams of a serious leadership and culture problem.

Similar to the VW emissions scandal, it appears that the results (hitting sales targets) greatly outweighed two of their core corporate values: “Ethics” and “What’s right for customers.”

An Atmosphere Where Employees Fear Repercussions for Speaking Openly
Lastly, we know based upon over 500,000 employee engagement survey responses that that employees only report questionable behavior when they have faith that there will not be retaliation for speaking up. The same lack of trust plagued VW. If you want your employees to be a positive force for change make sure that they trust leadership to set the right course, model the ways things should get done, and demonstrate integrity.

Then ensure that management encourages constructive dissent and listens to and takes employee ideas seriously.

The Bottom Line on Wells Fargo’s Toxic Sales Culture
Wells Fargo’s website states that “culture is the attitude we bring to work every day — the pattern of thinking and acting with the customer in mind. It’s the habit of doing the right things, and doing things right.”  If they had followed their espoused corporate culture, they may have avoided the largest penalty, $185 million, since the Consumer Financial Protection Bureau was founded in 2011.

Take a close look at your corporate culture. Can you honestly say that your culture is aligned with your strategy and a positive force that does not risk being poisoned by one of the three factors above? Be sure. Few organizations can survive the kind of scandal Wells Fargo has just experienced.

Want to learn more about not falling into a culture-driven scandal, Download High Performance Corporate Culture Whitepaper

Comments are closed.

The LSA Global team was very receptive and flexible to our needs every step of the way. Their staff and facilitator demonstrated attention to detail, responsiveness, and professional courtesy. The participants were thrilled with the outcome and rated the communication skills workshop and the facilitator as ‘Excellent’. I’d highly recommend working with the LSA Global team to meet your professional development needs.

John Mastrorilli
FRDP Leader

Intuit

We consider LSA Global our outsourced learning and development partner. We worked closely with LSA to customize a management development program to meet our growing business needs. I would highly recommend LSA to any company wanting to deliver quality learning solutions.

Terri Wright-Scheer
Vice President Human Resources

Hyperion has a commitment to lifelong learning. LSA helps us provide the right business sales training, management training programs, and leadership development programs at the right time to meet the needs of both individuals and departments. I especially appreciate their ability to listen to my needs and recommend the appropriate facilitators, solutions and content.

Sarah Parks
Senior Project Manager

Hyperion

Congratulations on your pro-activity in establishing this program and developing such an effective New Employee Orientation course.

Farhat Ali
President and Chief Executive Office

Fujitsu

VNUS Medical has been very pleased with the effective management development programs that LSA Global has delivered for us over the last four years. The programs have been universally facilitated by experienced and best in class instructors. The knowledge gained by our management team has been put into practice very quickly. VNUS is very happy to be working in partnership with LSA because they consistently deliver excellent programs that receive exceptional feedback from our management team.

Cindee Van Vleck
Director Human Resources

We partnered with LSA to pilot a customized behavioral interviewing program to help ensure that we continue to hire the best and brightest as we continue to rapidly scale. LSA’s ability to understand our business and our unique culture combined with their desire to ensure that the best practices framework truly fits our performance environment and is highly adopted by our people is a real blessing. Most other firms want to just ‘give you training.’ Not LSA, they are focused on helping me hit our hiring forecasts and attract A players.

Jennifer Remling
Director of Global Recruiting

AKQA

I continue to be impressed by the level of leadership development and management expertise and quality of advice and facilitation that LSA has to offer. What a smart and client-centric group of great people who really know how to help leaders attract, engage, develop and retain top talent.

Tracy Esposito
Director, HR Business Partner

We contacted LSA to help us with customized management development. LSA worked with me to identify a solution that would meet our exact needs. We decided to start at the top and ran the program for our executive team. It was such a great success that we hope to roll it out companywide. We look forward to a long-term partnership with LSA Global and their team of experts.

Barry L. Byrd, SPHR
Human Resources Manager

We value our relationship with LSA Global. We came to LSA because we wanted to improve overall behavioral based interviewing capabilities of our managers to increase the probability of both hiring top talent and future leaders. LSA designed a highly customized solution for our business and culture. We are currently rolling out this solution to our leaders. I would highly recommend LSA Global as a top quality resource.

Rae Phillips
HR Project Manager - Training & Development, PHR

I highly recommend LSA Global to anyone who is looking to improve individual or organizational effectiveness through their top quality programs and broad range of expertise.

Greg Pappas
VP of Human Resources

LSA has become the gold standard in team building and management training at Genomic Health! I have a hard time finding facilitators that come close to their level of customization, expertise and experience.

Emily Couey
Director of Human Resources

PalmSource has found our relationship with LSA extremely beneficial. We worked closely with LSA to customize the right Management Training Program solution to meet our unique business needs. LSA is a quality organization, one that I’d recommend to any company looking for a first class training and consulting partner.

Ken Boehm
Vice President of Human Resources

LSA helped us design and deliver a blended learning solution for our leaders to help drive our growth plans in a way that aligned with our specific culture and values. LSA understood our business, had deep expertise in the content areas, tailored the programs to fit our specific needs, and delivered great results. They constantly strive to deliver business impact and align their solutions with our business initiates, culture, and performance management systems. I highly recommend them to anyone looking to take their leaders to the next level.”

Beth A. Taylor
Vice President of Human Resources

Thoratec

Working with LSA Global has proven to be extremely valuable and worthwhile. LSA understands our business, has deep expertise in content areas, and tailors the programs to deliver great results. The facilitator was extremely knowledgeable about Working Globally with India and her energy and passion made the session interesting, fun, and enjoyable for all that attended. The participants walked away extremely pleased along with highly useful practices and tools. I would highly recommend LSA Global to any company that has partners or offices in India.

Glenn McGillivray
Human Resources Business Partner

Intuit

LSA helped to meet the needs of my teams within a very narrow timeframe. My team walked away with highly useful management tools and practices. LSA saved us time in delivering the right solution for our specific needs.

Sandeep Kumar
Director, Software Engineering, EPG

Evaluate your Performance

Toolkits

Toolkits

Download key published insights and tools from industry experts highlighting best practices in the areas of talent, strategy and culture.

More

Health Checks

Health Checks

Want to know how you stack up against leading organizations?  Receive a complimentary benchmarking analysis courtesy of an LSA Expert.

More

Whitepapers

Whitepapers

Get up to speed on timely solutions critical to your business. Published by LSA Experts based upon client feedback and key industry trends.

More

Methodology

Methodologies

First we identify the key metrics you want to improve. Then we assemble a dedicated team of elite experts who have successfully solved similar problems with similar clients.

More

Blogs

Stay up to do date with the latest information on how we help high growth companies align their culture and talent with strategy.

More

Case Studies

Client Case Studies

Real world consulting and training approaches from LSA projects, providing insights on how your company can outperform the competition.

More