Shame on Wells Fargo: A Lesson in Sales Ethics
On April 20, 2018 the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency imposed a $1 billion fine on Wells Fargo a variety of abuses perpetrated against consumers of its auto loan and mortgage products. Among Wells Fargo’s offenses: deceptively getting 570,000 clients to sign up for expensive car insurance that they didn’t need, which led as many as 20,000 to default on their auto loans. This is certainly a lesson in sales ethics.
Separately, the bank also charged 110,000 of its mortgage borrowers for failing to meet a deadline for locking in their interest rates, even though the bank itself was responsible for the delay. Nearly 18 months ago, Wells Fargo, a 166 year old and $277.4B (as of May 2017) company was penalized with fines amounting to just under $200 million for its ridiculous and unethical sales behavior. Five thousand three hundred employees allegedly opened customer accounts—on the down-low—to boost sales figures, leading to excessive—and unknown—account holder fees.
These fraudulent actions are disgusting and mind-blowing.
This was a line that was clearly crossed between ethical and unethical and not because the values didn’t exist within the company—but because there was no accountability in enforcing those values.
Don’t get me wrong, there shouldn’t be a need to enforce “right” because people should already know what “right” looks like. Honesty, trust and integrity are just a few of the values that should be expected rather than aspired for.
It’s clear that Wells Fargo’s leaders and managers set themselves up for failure by not instituting a culture of curiosity, which leads to ignorance, complacency and a lack of accountability.
Not having a culture of curiosity is a challenge for numerous sales organizations. In a fast- moving and competitive business environment this can result in a lack of clarity from leadership on a vision for change and the associated objectives needed to support that change. A recent study on change management and sales training intervention confirms this, stating that only 51% of sales leaders communicate a vision for change.
This leaves a significant portion of sales teams blinded by chaos with no clear pathway out, simply because they lack the guidance—the vision—from senior leaders. When it comes to improving sales performance management, organizations obsessed with the curiosity of constant improvement never settle for “what is,” because they’re constantly on the lookout for “what might be (better).”
A great example of a company that has curiosity in their DNA is Amazon. Their number one leadership principle is: “Customer Obsession: Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.”
Being obsessed with your customer demands curiosity and as a result, there is no room for ignorance. When I worked at Amazon recruiting third-party merchant sellers to sell on the platform it was evident that every employee was accountable for the customer experience. We had leadership principles and a shared purpose. Amazon’s senior leaders and managers cascade these messages daily.
Additionally, every employee is a shareholder of the company and salespeople are not compensated via a commission structure. This meant that we held ourselves and colleagues to a very high standard because if the stock dropped, so did a significant portion of our compensation. And, we were able to focus on recruiting quality third-party merchant sellers vs.
Yes, there can be case made for commission vs. non-commission compensation plans and the behaviors that could arise from either, but that’s another article. In my opinion, the case would be irrelevant because ethics in sales boils down to the leaders at the top.
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