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 – Wells Fargo’s toxic sales culture.

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.

Stumpf was fired in October 2016.

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
  • Customer Satisfaction
  • 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 contributed to Wells Fargo’s Toxic Sales Culture prior to the scandal:

  1. Unrealistic and unreasonable expectations 
  2. Minimal accountability
  3. An atmosphere of fear

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

1.  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
  • Know how they are performing compared to those expectations

2.  Minimal Accountability for Questionable Practices or Behaviors
It also appears that Wells Fargo’s toxic sales culture created minimal accountability for the questionable practice of taking unfair 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.”

3.  An Atmosphere Where Employees Fear Repercussions for Speaking Openly
Lastly, we know based upon over 500,000 employee engagement survey responses per year 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
  • 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. Are there any similarities to Wells Fargo’s toxic sales culture?  Can you honestly say that your culture is aligned with your strategy and that it is 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 sales culture-driven scandal, download How Hard Should You Push Your Sales Team to Perform at their Peak?

Comments are closed.

The Next Generation Management Development courses have helped me communicate more effectively with my peers and teammates. By utilizing effective communication techniques such as clarifying and confirming, and asking open ended questions, I have been able to clarify and understand information in situations where I would have otherwise asked limited questions and made false assumptions.

Robert Breckner
Firmware Engineering Manager

SeaTel has found our partnership with LSA Global to be very valuable and beneficial. We turned to LSA to customize a supervisory/leadership solution to meet our needs. LSA delivered a customized top quality solution. I’d recommend LSA Global to any company looking for a best-in-class training and consulting partner.

Kortney Riddle
HR Manager

LSA Global’s consultant brought a fresh perspective to our behavioral based interviewing strategy for two key executive positions we needed to fill, and their consultant helped us develop questions that produced a much deeper understanding of candidates’ capabilities. I am confident that the two new executives joining our organization have the right skills to add significant value. Throughout the process LSA was also very responsive in dealing with short lead time requests.

Because of the unique nature of our business, Excel is a core application in our accounting organization. After three attempts to find an Excel consultant who is capable of helping our finance team integrate advanced applications into our work processes we found LSA and Alex. He was not only a “Real” Excel expert but was masterful in helping us identify where to use Excel applications in our processes to increase our group’s efficiency.

SPO Partners & Co
Kim Silva, CFO

LSA has been a tremendous asset to my portfolio, both at my current company and my past company. As an HR leader, I am always looking for ways to find external resources that can provide a solution to our management training needs. LSA does that for me. Their solutions are presented in a much more leadership-oriented manner so as to be crisp, business relevant, and easy to apply right back on the job. I will continue to augment our programs using LSA solutions.

Ken Boehm
VP of Human Resources

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

We have been able to utilize LSA’s extensive network of top-notch resources to leverage our investment in employee development. The result has been the cost effective and highly efficient delivery of quality educational and management training programs.

Steve Feller
Vice President, Human Resources

In the Next Generation Management Development courses, I was trained with skills and tools that have made me and my team more productive, motivated, and successful at communicating with other departments.

 

Kevin Ashman
Firmware Engineering Supervisor

LSA’s Employee Engagement Consulting and Survey work has provided critical visibility into: how well our people are holding up under the general economic environment, as well as, the specific challenges that face biotechnology companies in their efforts to discover and develop new medicines; their level of alignment and commitment to XOMA’s Vision and mission critical strategies; how leadership practices and management systems support an environment that engender commitment, and the specific actions that our leaders can take to improve on areas that are important to our people. I highly recommend LSA’s employee engagement solutions.

Chris Wells
Vice President, HR and IT

LSA’s consultant designed and delivered a half-day team building solution for our recent conference. It included careful customization to integrate the design with our new mission and values. Everyone had fun and identified key issues with our teamwork. Altogether a great program!

Bob Ward
Director of HR

We have worked with LSA Global for our learning and development needs and have always had great success. They helped us recently with customized Management Workshops that we held for the second time. It was fantastic, and I would highly recommend LSA to anyone that is attempting to get immediate and impactful improvements.

Mary Johnston
HR Manager, BU Radiology Informatics

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

LSA’s customized Effective Presentation Skills program has helped me elevate my presentation skills to the next level. I now have a much greater self-awareness of my presentation skills and can leverage off of my strengths while working to improve upon other areas. I would definitely recommend this solution to anyone for whom business presentations are an integral part of their job.

Jim Elliott
Senior Marketing Manager

Samsung

The refreshing thing about LSA is that they focus on understanding our business situation and helping me succeed instead of selling a product. With over 150 experts, they are an invaluable resource that helps me deliver higher quality results faster. I recommend them to anyone looking to improve the performance of their workforce.

Stacie Rodgers
VP of Human Resources

Cutera

“We turned to LSA to help us custom design and deliver a leadership and management development curriculum to help drive performance. They have done an excellent job diagnosing the business situation, designing an approach that fits our culture, and delivering a first class solution.”

Sally Buchannan
VP Human Resources

What a refreshing change from the half-baked psycho-babble you normally get from training and consulting organizations. LSA gives you the practical and results-oriented assistance you need to define and reach your goal.  They provide a results driven plan – not just a temporary fix. They are great to work with, and even more importantly, they “get it!”

David Fiano
Vice President Human Resources

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