Ask John Stumpf, former CEO of Wells Fargo, what he thinks now.
I’ve been waiting for this moment before writing this post. Not that I want John Stumpf to suffer. Quite the contrary; there is a part of me that doesn’t feel it’s fair that he has to go down for actions he didn’t directly contribute to. Or did he?
If you’re unaware of the particulars, former Wells Fargo CEO John Stumpf just announced his “retirement” today, October 12, 2016, and forfeited $41 million dollars of his compensation package. Head of Retail Banking Carrie Tolstedt also forfeits handsome paychecks, and is “retiring” ahead of schedule at the end of this year.
And this is just the beginning. Class action lawsuits have already begun, from both employees and investors over the counterfeit stock inflation, which will be argued now as securities fraud (criminal behavior supported an artificial boost to stock prices).
All of this is in response to Wells Fargo’s recent fine of $185 Million by the Consumer Financial Protection Bureau for creating over two million fake accounts! Customers were none the wiser when accounts were being opened for them and then closed, all to generate the almighty “tick mark” so that a bank employee could meet their lofty goal. In fact, former employees are now speaking out about days where they would open up to 5 checking accounts for friends and family “just to go home early.”
This case really resonates with me because I’m a former banker. People often assume that I have an HR background, but I don’t. I worked in retail banking for several years before moving to the investment advisory side of banks. And here’s the scary part – IT’S NOT JUST AT WELLS FARGO.
From day one as a teller during my college years, I was taught to “cross-sell” multiple accounts and was held to this performance metric. Now, don’t get me wrong, I love high performance as much as any business owner – our company name is Performance Culture for crying out loud – but it was the culture piece that made the journey shady for Wells Fargo and does for many other organizations not yet in the news.
So I know what these employees were feeling, and why they did it. When the culture you work in places daily pressure to meet often unrealistic goals at whatever cost, anyone can start to be worn down.
The message Wells Fargo sent to employees far and wide was “Performance is what we care about. Make it happen, no matter what.”
We created Performance Culture because we were looking for a tool that measured performance management, and rewarded, values just as much as performance. We knew you couldn’t have one without the other to be successful in business. And values should never be sacrificed. Even if performance suffers in the short term due to a focus on values, a company will make up for it 100 fold down the road.
That’s why we use the Performance-Values Matrix as the framework for employee evaluation and coaching for performance management. Nothing else is as clear as this matrix for focusing all eyes on the right metrics and the right behaviors.
In the end, Wells Fargo executives got what they asked for. And as Volkswagen executives, and Enron executives before them, can attest, it wasn’t worth it.
John Stumpf led a brilliant career up to his legacy moment of having to step down amid major scandal and controversy. This was his organization to lead, and he allowed the perpetuation of performance over values to harm millions of people. Don’t let your organization do the same.