I had to write this blog in response to what happened recently at Wells Fargo.
I’ve spent most of my working life, thirty eight years, in the financial services industry and was lucky to escape relatively largely free from long-term damage (I was damaged a little, but am recovering nicely). I feel for the employees of Well Fargo who, in order to survive, in order to protect their jobs and their families, felt compelled to open over two million chequing and other accounts without their customers knowledge.
How did this ever happen?
Banks are very concerned with protecting their brand, so it doesn’t make a lot of sense to me that Wells Fargo CEO John Stumpf would roll the dice with respect to his bank’s reputation. But then again, a lot of things today do not make a lot of sense to me. An example of this is the state of the current US election. People today are willing to say anything if it can benefit them. They just make stuff up and they don’t seem concerned when they eventually get caught.
In Stumpf’s response when the scandal first broke, he blamed the employees directly responsible for setting up the fraudulent accounts, asserting that ‘there was no incentive to do bad things”.
The truth is that banks are very good at taking advantage of their employees in order to make money. They have learned over the years what buttons to push and where their vulnerabilities are. They put the fear of God into them, the fear that they might lose their job and not be able to make that month’s mortgage payment. When you live in a constant state of fear, it forces employees to do things that they know they shouldn’t. Can you really blame a starving man that is forced to steal food in order to feed his family? Isn’t trying to keep your job so you can make your family’s mortgage payment the same thing? Think about it!
Constant High Stress Is A Very Bad Thing
Today, employers have the ability to track sales performance on an hourly basis and are able to compare that performance with employees in similar positions. The heat is never off these days and that is why short term employee disability rates are on the rise. Living in a constant state of stress is no way to live and we need to get things back in balance, back to when they made sense, before it is too late. Maybe I’m getting old, maybe I’m getting a little soft, but I know what it’s like to live in a constant state of fear and that is not a healthy place to be.
It’s Safer in The Middle Of The Pack
I remember reading Jimmy Pattison’s autobiography when it was released back in 1987. One thing that I have never forgotten was his practice of firing his worst performing salesman every month at his car dealerships. I always thought it was a brutal approach, but it now seems to be widely adopted by the corporations. In practice, they can’t fire them that quick. They tend to put them on performance counselling first, but the results usually end up being the same. I’ve talked to many employees about this and the majority have said that their goal is to remain in the middle of the pack which is a little disconcerting especially if you are a shareholder. There is safety in the middle of the pack. If you outperform and stand out, expectations are raised and chances are your goals will be raised for the next year. How fair is that, penalizing your good employees for above average performance. It just doesn’t make a lot of sense to me.
Being a former banker, Wells Fargo is a good reminder of what happens when we push retail sales targets too hard in order to sell additional product and generate more profits. When is enough profit enough? The sad thing is that it’s these low level employees that always seem to pay the price in the end. How 5,300 employees could be gaming the system without upper management knowing or condoning is not possible in my opinion and someone needs to pay the price and set a good example to others that this type of behaviour will not be tolerated. Let’s get it right this time, unlike what happened in 2007.