Lisbiz strategies: Lessons learned from Wells Fargo fiasco

Home Columns Lisbiz strategies: Lessons learned from Wells Fargo fiasco

September 12/19, 2016: Volume 31, Number 7

By Lisbeth Calandrino

By now we’ve all heard about Wells Fargo and its fraudulent bank practices that have recently come to light. Apparently, thousands of employees—over the course of several months—opened up bank accounts or credit cards without the customer’s knowledge. Investigators say it was the result of overambitious employees who were under pressure to meet lofty sales goals.

It may seem preposterous unless you’ve asked your bank representative if he gets paid when he opens up a new account. I remember taking out an IRA at a branch that I rarely did business with and getting a call from the place where I usually bank. My “relationship manager” was disturbed that I didn’t go to him first. I asked how much he lost on the transaction but he passed on the question.

As the trial in the George Washington Bridge lane-closing scandal opens, again we ask the same question: Do these things take place without knowledge of the CIC (Chief in Charge), or do employees take it into their own hands to cause serious trouble? I doubt it would happen in your business.

Let’s face it: Employees rarely do anything, especially if it has to do with money, without the approval from the owner or manager. Although Wells Fargo is back-peddling, saying, “What happened doesn’t coincide with their values,” the deed has been done. The question we should ask ourselves is who is responsible for my business?

If you look a little further into Wells Fargo, you will see that employees had monthly sales targets they were required to meet as a way for them to earn bonuses. According to a former Pacific Northwest branch manager, meetings are held each morning to make sure everyone is committed to 120% of the daily quotas. Apparently it doesn’t matter how you do it.

What does this mean to your business? It could mean many things. For instance, how do you determine your commission structure? Does it make it almost impossible for your salespeople to earn a living forcing them to sell with little concern for the customer? We all say the customer is the most important concern of your business, but are they? Do you unthinkingly ask employees to do things that might put your business in a precarious position?

Do your managers review your weekly goals and then work to help the salespeople be better salespeople, or do they tell them to just get the money at the door? Unless times have changed, this is not unheard of. Salespeople often get little training on being better with the customer as they have to push to make their quotas. In many places it’s a very unhealthy atmosphere. The bottom line is the business eventually suffers by scaring customers away. Don’t misinterpret what I’m saying; you must have goals and quotas but not at the expense of your customers. If your salespeople aren’t good at meeting their quotas, I recommend spending time on teaching them how to build better relationships with customers rather than just having them push harder. Being overly aggressive just drives customers out the door and tells others not to do business with you.

This is a good time to review your company values. In fact, this is something you should be doing at every meeting. When there is a difficult or conflicting encounter with a customer, one’s value system should win out. Not adhering to this can cause a huge financial loss to your company as well as other negative repercussions.

At the end of the day, the objective should be to do the right thing—whether you’re selling flooring or financial services.

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