The Dark Side of Aggressive Sales Cultures: Wells Fargo and the Opening of Fraudulent Accounts
The recent scandal at Wells Fargo has cast a harsh light on the detrimental impact of an overly aggressive sales culture within financial institutions. This article delves into how such a culture can lead to unethical behavior, using the case of Wells Fargo as a sobering example.
Understanding the Aggressive Sales Culture
In many retail banks, employees are set performance goals that often increase over time. These goals, while intended to motivate employees, can create a high-pressure environment. When employees meet or exceed their goals, they receive positive reinforcement such as bonuses or recognition. However, when goals are not met, employees face reprimands, increased expectations, and an ever-increasing quota. This relentless push to meet or exceed sales targets can result in unethical behavior as employees look for shortcuts to fulfill their goals.
The Broader Context: Managers and Performance Improvement Plans
Managers within retail banks often implement various performance improvement plans to assist their team, including webinars and classes on sales techniques. However, these resources require time and resources, leaving managers with the challenge of meeting daily quotas. When employees are taking training that might not be completed in time, managers may resort to inexcusable measures to ensure the goals are met. These measures can include pressuring underperforming employees and even encouraging unethical behavior to achieve success.
Case Study: A Fictional Scenario at Wells Fargo Branch
Let's delve into a fictional scenario at a Wells Fargo branch to illustrate how this aggressive sales culture can lead to unethical behavior.
Imagine a retail bank branch where each banker is expected to open a specific number of checking accounts daily. Assume the branch manager, Julie, sets a goal of 8 checking accounts per day for the team. On Monday, most employees meet their goals, but one banker, James, falls short by 5 accounts. This sets in motion a dangerous cycle of increasing pressure and making up for missed quotas.
The Pressure Builds
James returns to work on Tuesday with even higher expectations. Not only must he fulfill the 5 accounts he missed on Monday, but he also needs to meet his usual goal of 8, making his target a daunting 13 accounts. Despite his best efforts, James only manages to open 6 accounts on Tuesday. Wednesday sees an even more ambitious goal of 15 accounts, including the missed ones from the previous two days. This unrealistic timeline pressures James to find additional accounts quickly.
Seeking Quick Fixes
James, burdened by these increasingly challenging goals, is left without the support he needs. Without performance improvement plans or adequate coaching, he begins to look for quick fixes. He ponders ways to boost his production and considers seeking help from his co-workers. However, this approach is limited as his colleagues will also have their own quotas to meet. In the end, James may feel compelled to open some accounts without authorization to meet his goal, even if it means breaking the law.
The Wells Fargo Incident: A Real-Life Example
The case of Wells Fargo is a stark reminder of the consequences of an aggressive sales culture. Employees felt pressured to meet unrealistic goals, leading to unethical actions such as opening fraudulent accounts. Wells Fargo executives seemed blind to the ethical breaches occurring within their organization, choosing to focus on short-term gains over long-term sustainability.
The Questions Unanswered
Why did Wells Fargo leaders miss the red flags? Why did they not implement stricter controls on account openings? If they truly wanted to "crack down" on unethical behavior, they could have:
Continuously monitored account activity for duplication or inactivity Conducted regular audits of new account openings Investigated unusual patterns in account openings and debit card ordersInstead, they prioritized daily sales figures, allowing unethical behavior to flourish.
Conclusion: A Broader Perspective on Corporate Culture
The Wells Fargo scandal is not solely about individual employees and their actions. It is a reflection of the broader corporate culture that values short-term profits over ethics and long-term trust. Retail banks and financial institutions must adopt a balanced approach, focusing on sustainable goals and supportive management practices. Only then can they ensure that their employees act ethically and promote a culture of integrity.
As consumers and investors, it is crucial to hold companies accountable for their practices. When unethical behavior occurs, the responsibility does not lie solely with the employees but also with the management and executives who create and maintain such environments.