Warren Buffet speaks and yes, we listen.
Wells Fargo employees by the thousands set up fake bank accounts for customers to reach aggressive sale goals. As CEO, John Stumpf liked to say, “Eight is great!” as in eight Wells Fargo products per customer as the goal. By the way, that is former CEO, John Stumpf, but only after the pressure brought on by Senator Elizabeth Warren and others (video link below).
Back to Warren Buffet who is the largest shareholder for Wells Fargo and on Friday spoke (finally) to the crisis at the bank (link here). “It’s a great bank that made a terrible mistake,” Buffett told CNN’s Poppy Harlow. Buffet continued with, “It was a dumb incentive system, which when they found out it was dumb they didn’t do anything about it.”
Slow to act, but Wells Fargo did fire 5,300 lower level employees for creating these accounts without the customer’s permission. Oh wait, Wells Fargo does not call their employees, employees. They are Team Members as we learn straight from their website Vision and Values page:
We say “team members,” not “employees,” because our people are resources to be invested in, not expenses to be managed — and because teamwork is essential to our success in helping customers. Our culture is about plural pronouns — we, us, and ours — instead of I, me, and mine. The star of the team is the team; we win by playing “us” ball.
Teamwork indeed. As the stagecoach rumbles down the road on the lookout for robbers around every turn, little did we know the robbers were driving the stagecoach itself. We, standing on the side of the road, are the ones to worry as we hear the sound of the stagecoach approaching.
Warren Buffet finished his response with not the final word, but the place to start. The idea of corporate culture and how we must understand it and act within its confines as business leaders.
“Cultures shift,” he said. “You can turn it for the better or worse by your own actions.”
Corporate Culture is a challenging and misunderstood topic. I plan to write more on workplace culture as I move forward, but for now lets focus on where this Wells Fargo story takes us. The concept of the Tone at the Top vs. the Tone in the Middle. The “tone” set at the top of the organization and visualized in their Vision and Values statements did not play out in the operational core of the organization.
The organizational culture concept of the day is “Tone in the Middle” and the vital importance of local leadership. Employees …. ah, Team Members, get their guidance from their direct leader. She sets the tone for the workgroup. Ethical questions such as what plagued Wells Fargo are local decisions with the profound disconnect to senior leadership.
My career is in financial services now approaching 30 years. I have seen first hand that disconnect of tone at the top and tone in the middle with the many banks I partnered with over the years. I now work for a FinTech company with the motto, “We’re Building a Better Financial World.” It is an exciting place to be, yet we are a corporate entity as any other growing company. I work there because the tone at the top and the tone in the middle are one.
Wells Fargo is a wake up call for us all as leaders in organizations. So more to follow from me on culture and business life. I for one, would have been fired at Wells Fargo, not for setting up these accounts, but for refusing to play along and trying to stop it. There is indication that some did speak up and then fired for raising their voice.
Wells Fargo has a long stagecoach ride ahead to improve and gain back the trust of the public and its Team Members. Lets watch and learn.
Further Reading and Watching: