At the height of the burst of the housing bubble and the “too big to fail” debacle, I worked for what was then the 8th largest bank in the U.S. At the time, Wells Fargo was one of the good guys. We knew that lending money to people who couldn’t afford to pay it back was bad for business, and according to those I worked with who knew the mortgage business, we turned away a lot of money because of this. We paid back the “bailout” money. And we grew to be the 2nd biggest bank in the U.S.
Fast forward eight years and the shocking revelation that so many Wells Fargo bankers created fraudulent accounts in order to meet sales goals. 5300+ were fired. The head of Retail Banking retired. And just a few days ago, CEO John Stumpf announced his immediate resignation.
I am saddened by the fact that the company who treated me very well as an employee did not treat the customers who keep the bank in business quite as well. And I’m more saddened for the Retail bankers, most of them honest and hardworking, who are likely taking the brunt of the fallout. And I can’t help but wonder…
First – a disclaimer. I’ve never worked in Retail banking. The hypothesis I’m about to put into words is mine alone. And it is this: Wells Fargo Bank used to have a wonderful reward for high performing employees called the Sales and Service Conference. Salespeople earned their way to this conference by meeting and exceeding sales goals. Service people like me earned their way by being recommended by other departments for exemplary service. The conference was an honor to attend – and a lot of fun!
My first Sales and Service Conference, held in the Bahamas was themed, A Culture of Legendary Excellence. I met a phone banker who was attending for her seventh time. She worked hard every year to meet her sales goals and was rewarded. But there were many more first-timers like me who were awestruck at the way Wells Fargo leadership honored us “little people” who were the “heart and soul of the company.” The culmination of a long weekend of recognition and inspiration was walking across the stage to receive a medal from the CEO.
I attended two more times. The last time I attended was in 2008. John Stumpf presented my medal. I shook his hand. He seemed genuinely pleased to be there. Later that year the company announced that it would be doing away with Sales and Service Conference, as it appeared to the outside world to be a boondoggle for highly paid executives. In the climate of bailouts, buyouts, and out and out failures, no financial institution should get away with such frivolity.
That frivolity, however, seemed to be a significant incentive for bankers to meet their sales goals. Sure, the executives were there, but they were there to encourage, support and honor those who had excelled at their jobs. I wonder – in making the decision to do away with the conference, did we lose a part of our “culture of legendary excellence?” I wonder – would the now-fired bankers have turned to fraud to meet sales goals if instead of threats such as reduced compensation or even job loss, an incentive were on the table?
I wonder – but I’ll never know.