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 – Wells Fargo’s toxic sales culture.
Before we look into Wells Fargo, let’s define corporate culture and its impact.
The Definition of Corporate Culture
We define corporate culture as the way work truly gets done on a day-to-day basis. Smart leaders know that workplace culture exists either by design or by default. In other words, in every organization there is a combination of practices, assumptions, and behaviors that define the collective attitude of how things get done.
In some organizations this combination has been carefully crafted over time to best execute a coherent strategy, fulfill a mission, and live a brand promise. In others, cultural norms have evolved without much purposeful alignment. Smart leaders do not leave culture to chance; they assess and align their culture to what matters most.
Culture Accounts for 40% of the Performance Difference
Corporate culture matters a lot – for good or for bad. Our organizational alignment research found that culture accounts for 40% of the difference between high and low performing organizations in terms of revenue growth, profitability, customer loyalty, leadership effectiveness, and employee engagement.
An aligned corporate culture accelerates strategies, improves performance, and sets the stage for high levels of employee engagement and retention. A misaligned corporate culture hinders strategic progress, sub-optimizes resource allocation, dilutes brand promises, dis-empowers employees, and encourages unhealthy politics.
Back to Wells Fargo…
Is Their CEO Accountable for Culture?
As much as Wells Fargo 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.
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.
Stumpf was fired in October 2016.
Three Major Factors that Contributed to Wells Fargo’s Toxic Sales Culture
Here are three major factors that contributed to Wells Fargo’s Toxic Sales Culture prior to the scandal. Any one of these factors can quickly and systemically spread cultural poison through the workplace through unaligned and unhealthy corporate beliefs, norms, assumptions, practices, and artifacts.
– 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
– Know how they are performing compared to those expectations
Similar to the VW emissions scandal, it appears that the results (hitting sales targets) greatly outweighed two of their espoused corporate values: “Ethics” and “What’s right for customers.”
– Trust leadership to set the right course.
– Model the ways things should get done
– Demonstrate integrity
Then ensure that management encourages constructive dissent and listens to and takes employee feedback seriously.
The Bottom Line on Wells Fargo’s Toxic Sales Culture
Take a close look at your corporate culture. Are there any similarities to Wells Fargo’s toxic sales culture? Can you honestly say that your culture is healthy and fully aligned with your strategy? Few organizations can survive the kind of scandal Wells Fargo has just experienced.
Want to learn more about not falling into a sales culture-driven scandal, download Research- How Hard Should You Push Your Sales Team to Perform?
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