Opinion Columns & Blogs

Robert Simpson: Banking on the customers — literally

Top management at Wells Fargo, one of the nation’s super-banks, is shocked — shocked! — that some of the bank’s employees, thousands of them in fact, have been cheating. As you may have heard, these employees opened multiple accounts for customers, assigning new PINs where necessary, and sometimes shifting money from existing accounts into the new accounts. And they did this without the customers’ knowledge.

This was not a tiny slip-up, done through carelessness or without nefarious intent. No, it took elaborate effort, even to the point of sometimes creating fake email addresses to use for the mysterious accounts. The bank has so far fired thousands who took part in the activity, although I would guess none of those fired to date were among top management.

It is reported that the cause for all this crazy account opening was the fact that the bank asked … well, told … its employees to meet a goal of 8 or more bank products to be sold to each customer. The employees went at it with a vengeance, opening, according to regulators, more than two million accounts apparently without the account owners’ awareness. Not surprising. If you tell people their economic survival depends upon their doing something, they will usually try their best to do it. If their best doesn’t work, they may try their worst. It is very difficult to sell a preponderance of bank customers as many as eight different accounts, credit cards, etc., unless you hold a gun to their heads. But if you hold a gun to the employees’ heads, they will somehow make it work or at least appear to work.

If I sound a little testy about this latest example of commercial stupidity, it’s because I feel very strongly about the value of leadership. While management and leadership are not synonymous, the effective practice of either requires the knowledge of and judicious use of certain elements of the other.

Managers in business who have oversight of employees are obliged to use leadership. When they don’t know what their people are doing, or when they don’t bother to find out, or when they see wrong-doing and look the other way, that’s not good leadership. When they establish requirements — goals, targets, production levels — that are unrealistic, that’s very poor leadership. When their actions then lead to disaster for their employees and they refuse to step up and take the heat themselves, that’s awful leadership.

These breakdowns don’t just happen in banks, nor just in other commercial undertakings. Every organization is susceptible, and the bigger the organization, the harder it is for top management (or leadership) to see what’s going on. That’s why they get the pay and the perks. It’s why they are expected to establish a structure and a culture that fosters acceptable conduct and discovers and roots out the unacceptable before it metastasizes.

In a structure, corporate or military or ecclesiastical or anything else, where demands exceed the reach of normal individuals, one or more of several things will happen. Some may succeed. Some may give up. And some may cheat. They may tell themselves it isn’t cheating, just cutting a corner in order to meet the boss’s or the commander’s goals. But it will become cheating. Unless the boss or the commander is astute enough or clever enough or has built a culture effective enough to discover the small deviations and correct course before careers and lives are destroyed. Maybe even before the organization itself is destroyed.

I have been guilty of violating standing regulations, not to mention common sense, in what I convinced myself at the time were actions in the best interests of my subordinates, in this case soldiers. Fortunately, I was caught up short by a hard-nosed commander who blistered me for my transgressions but allowed the wound to be cauterized by his blistering rather than end my career.

Too bad the CEO of Wells Fargo didn’t have a system where somebody with brains could have recognized the undue pressure being exerted and corrected course before employees were ruined, customers were upset, and the future of a bank with an otherwise solid reputation was endangered. The CEO is, he says belatedly, eliminating sales goals. He wants the bank’s customers, he said, apparently without choking, to realize that his retail bankers have only the best interests of those customers at heart.

It may be difficult for customers to take that statement seriously when the head of the consumer banking division, under whose leadership all those spooky accounts were opened, retires later this year with some $125 million in compensation.

Robert B. Simpson, a 28-year Infantry veteran who retired as a colonel at Fort Benning, is the author of “Through the Dark Waters: Searching for Hope and Courage.”