It’s that feeling you get when a fire truck goes racing by – you wonder what happened but you’re just glad it isn’t you.
Wells Fargo Bank saw its sterling brand go up in flames last week as the feds fingered their community banking division for creating two million bogus accounts using customer funds without their knowledge.
Analogies escape us. Mouse carcasses in burgers comes close, but this was intentional.
The harder question is whether it was institutional.
More than 5,300 employees involved in the massive fraud have been canned, while the senior executive in charge of the rogue division is packing up $125 million in bonuses and stock awards accumulated over 27 years of faithful – and apparently quite profitable – service. Barf bags can be found in the back seat pocket.
Perhaps more startling is to see CEO John Stumpf on the stump over the next two days fending off calls for his resignation and asserting that there were no incentives in his bank for such behavior. He strained to claim that the actions of thousands of managers, supervisors and account reps were inconsistent with the bank’s avowed culture.
Not so fast, there.
There is a credo in the world of safety management that says there is always more than one thing that causes an accident and almost always one thing that could have prevented it. Apologies to the Richard Dreyfuss character in Jaws, but this was no boating accident.
Sure, you can have a rogue manager, some screwball things done at one office or another, but any executive of a business is missing the larger point if they think it can’t happen to them, or they too easily dismiss the episode as unavoidable, or that’s the price you pay to trust people. (Only later did Stumpf ruefully acknowledge that this one happened on his watch – oh, and on the watch of his other executives, he added in an egalitarian gesture.)
People act the way they do for a reason. Even more so, they will act the way they think you want them to act, no matter what words you say or what platitudes are framed on the walls.
We can debate what signals are sent when you have branch-level cross-selling goals, or bonuses for knocking sales targets out of the park without some inquiry into how they were reached, or the lack of whistleblower or feedback channels, or pressure to hit product launch dates without excuse, and on and on.
No, you can’t prevent every “accident” but these kinds of pile-ups happen for a reason. One way or another, this crash at least started because the vehicle badly needed a front-end alignment — of its culture, its incentives, its reporting, the real or perceived signals telegraphed by executive behavior and more.
Controls matter, but what guides behavior more than anything are values and principles — clearly expressed but also lived out in big and small ways from the top down. Do the right thing is no simple statement; it can embrace the most sophisticated or complex of enterprises.
Sometimes I think the hardest question a CEO can ask is: “What do it I need to know that no one is telling me because they’re afraid of what will happen to them or how I’ll react?” Or: “What do people think is most important to me and this business?”
You can’t possibly know the answer to those questions unless you ask.