Our youngest son was transitioning from school to the work world a few years ago and decided to start saving for an engagement ring for his then-girlfriend, as well as for a honeymoon and car purchase. As an existing Wells Fargo customer, he met with a bank representative who opened separate savings accounts for each purpose, saying that would be the best way for him to reach his financial goals.
The CPA in me found that strange. In fact, my response was, “Seriously? They want you to manage three savings accounts?” Events of the past few weeks cast new light on that experience. While the multiple account structure didn’t cost my son anything, it ultimately cost Wells Fargo CEO John Stumpf his job.
Whether you view Stumpf’s departure as a resignation, retirement, or termination, the consequences are substantial. The Wall Street Journal reports that he had already agreed to forfeit $41 million in stock compensation, his 2016 bonus, and salary during an independent board investigation.
Those actions came after Stumpf faced intense questioning by U.S. Senate and House committees that oversee the banking industry. Sen. Elizabeth Warren grilled Stumpf, challenging the lack of accountability at executive levels within Wells Fargo. “OK, so you haven’t resigned. You haven’t returned a single nickel of your personal earnings. You haven’t fired a single senior executive,” she said to Stumpf.
For its part, the bank agreed to a $185 civil settlement and refunded $2.6 million in fees to affected customers. And let’s not forget that 5,300 Wells Fargo employees were fired for opening unauthorized accounts.
Ironically, the Wells Fargo website touts “What’s right for customers” among its core values. “We value what’s right for our customers in everything we do,” it explains. Similarly, under “Ethics,” Wells Fargo states, “Our customers trust us as their financial resource . . . They trust our bankers to provide them with products and services to meet their needs.”
Unfortunately, Wells Fargo isn’t the first company to experience a disconnect between its core values and employee behavior. And it won’t likely be the last. Pop quiz: what prominent corporation declared its values as Communication, Respect, Integrity, and Excellence? That’s right, none other than Enron, which the Journal of Business Ethics describes as “the ultimate symbol of corporate wrongdoing.”
What can companies do to ensure behavior matches their values?
Norman Sheehan and Grant Isaac suggest that organizations operationalize their values by establishing a set of principles that amplify and fully define those values. This approach takes the values, which are often stated in idealistic terms, and translates them into actionable principles that guide behavior.
For example, one of Boston Consulting Group’s values is “Clients Come First.” The company further defines and operationalizes that value with several principles, one of which states, “In trade-offs between BCG’s and a client’s interest, the client comes first.”
Operational principles like these can then be used to establish policies, procedures, systems, and processes that motivate employee behavior consistent with corporate values.
What are you doing to ensure your values are clearly defined and lived out by everyone on the team? Let’s talk about a fresh approach to strengthen the impact of values in your organization.