The Lessons of Wells Fargo: 3 things you need to watch for in your organization!

What is the lesson of Wells Fargo for the rest of us? Was there a failure of leadership or was this just another example of bad employees? Let’s look at the story and the 3 things you need to watch for in your organization!

  1. Sales compensation drives good and bad behavior
  2. Cross selling generates more sales
  3. Leadership: One bad apple spoils the whole bunch



“In 1852, Henry Wells and William Fargo founded Wells, Fargo & Co. to serve the West. The new company offered banking (buying gold and selling paper bank drafts as good as gold) and express (rapid delivery of the gold and anything else valuable).”

“The name Wells Fargo is forever linked with the image of a six-horse stagecoach thundering across the American West, loaded with gold. The full history, over more than 160 years, is rich in detail with great events in America’s history. From the Gold Rush to the early 20th Century, through prosperity, depression and war, Wells Fargo earned a reputation of trust due to its attention and loyalty to customers.”

                                                                        – From History of Wells Fargo

In 2016, Wells Fargo lost its focus on “attention and loyalty to customers”, the same focus that earned them their reputation of trust. Wells Fargo was involved in underhanded and illegal practices to generate improved business results for the bank and its employees. If you are not entirely familiar with this story, check out the report on .

The name Wells Fargo will now be forever linked to the scandal that rocked the financial giant and ended with the firing of employees, called “team members”, and the resignation of executives, most notably and most recently it’s CEO.


The lesson of Wells Fargo for the rest of us: 3 things you need to watch for !

  1. Sales compensation drives good and bad behavior

Sales organizations use sales commissions and sales targets along with high-pressure sales management to motivate and drive sellers to close more business. While sales commissions and targets are not new or dishonest, sales targets are rarely scientific. They are set based on what was sold last week, month, or year and by how much more sales leaders think they can sell. If the sales targets are too low, everybody hits the target and sales leaders believe they have left money on the table. However, out of reach sales targets can discourage some from even trying and encourage others to do illegal things.

Wells Fargo hired at least 5,300 people who decided to earn their commissions by illegally creating false accounts without the knowledge or permission of their customers. There were also clearly managers and executives in Wells Fargo directing or allowing the illegal practices. The result – over 2 million phony accounts created without the customer’s knowledge or consent, violation of the trust of thousands of customers, and 5,300 jobs lost! Many employees have stated that sales targets were out of reach and sales management used high-pressure tactics along with threats of losing their jobs – all of which drove sales people to cheat.

Certainly there are good and bad people in the world; but more importantly there are people who do good and bad things. If people consider themselves to have high standards (e.g., morals), why do they often resort to bad behavior? Sales people can be infected as well! All sales people are not inherently crooked just because they have sales commissions to earn, sales targets to meet, and management that drives them hard. However, these pressures may result in bad behavior in sales people.

It is important to set targets that make sense and are achievable so that you drive the right behavior. It is also important to hire sales leaders and sales people that will not go to the level of doing illegal acts to earn money and keep their jobs.

Dennis J. Moberg writes in an article entitled When Good People Do Bad Things at Work, “Rote behavior, distractions, and moral exclusion stymie ethical behavior on the job.”

Sometimes good people inadvertently do bad things!

  1. Cross selling generates more sales

“Cross selling” is a perfectly legal way to provide additional products and services that may fit what the customer is looking for. Many companies do it with positive results for both customers and businesses. McDonalds understands that a high percentage of customers who buy a hamburger also buy fries and a drink; so they offer that combination to their customers when they ask for a hamburger and eventually they packaged them together to create a “combo”. If you use Amazon to shop, you will find that they suggest additional products that others bought to go with that same product or service you’re looking to buy; perhaps you are buying a TV and they can recommend a TV stand that many other buyers of that TV purchased and enjoyed.

Many of the sales people at Wells Fargo likely learned and executed legitimate cross selling. Some hit their sales targets and some did not. However, 5,300 sales people, their managers, and their leaders decided to stop cross selling, which would have involved working WITH their customers. Sales managers said that cross selling created added pressure that drove some sellers and their managers to cheat. Regardless of the reasons, they started down the illegal path, creating over 2 million phony accounts and in some cases transferring money from customer’s legitimate accounts to these phony accounts. Make no mistake about it; this was NOT selling – many will become confused. This was old-fashioned cheating and we should not be surprised to see people that participated, led, and oversaw this cheating in legal trouble.

A sale involves working with customers to help them see the value of a thing and then helping them to exchange that thing for money. Sales can include cross selling. When cross selling, it is important to maintain a customer-centric approach. The focus should not solely be on hitting or exceeding sales targets but on providing additional products and services that benefit customers. You will be rewarded.

Add fries and a drink to my order please!

  1. One bad apple spoils the whole bunch

The Wells Fargo CEO went before the U.S. Congress twice saying over and over again that the practice of creating phony accounts was not representative of the culture at Wells Fargo. “There is nothing in our culture, nothing in our vision and values that would support that. It’s just the opposite.”, he said. I was intrigued by these pronouncements and decided to read the document entitled The Vision and Values of Wells Fargo” written by the CEO. What I found was that the direction set by the CEO was customer centric and built on trust and high ethics. During the hearing before congress, the CEO placed blame for the illegal activity on a small group of rogue employees – 5,300 bad apples. “If they’re not going to do the thing that we ask them to do— put customers first, honor our vision and values — I don’t want them here,” he said. But where did this start? Who was the original bad apple? Is it possible that Wells Fargo employees, managers, and executives created a culture contrary to the vision and values outlined by the CEO without his knowledge? Were both the vision and values clearly and regularly communicated to every “team member”? Were there consequences when someone – anyone at any level – violated the values of the organization?

Leadership is responsible for setting the tone of an organization. Top executives typically create mission and values statements to guide employees and have guidelines of conduct. Leadership and management communicate the mission and values to everyone in the organization and create an environment that allows execution according to the values of the organization. Leadership and management educate employees on what is right and proper, what is not, and the consequences of both. Once all of this is done, employees can chose to follow the leaders – or not.

While the 5,300 people at the center of the storm at Wells Fargo chose to go down the path of illegal bank business practices, do we believe they did that on their own? Someone led 5,300 people down the wrong path and diverted them from trying to reach their pot of gold into a pit of sin. The fact is that the fraudulent account openings continued even after the bank was aware of it and had fired the 5,300 employees for it starting in 2011. The Wells Fargo executive who oversaw the unit of the unauthorized accounts recently retired from the bank with $125 million and the possibility of getting an additional bonus! Unfortunately she also left thousands of customers mistrusting the bank, and it will be very hard to recover that trust.

Leaders influence both good and bad behavior. It is up to leaders to create a culture that is aligned to a clearly defined mission and values, and communicate the mission and values. When leaders find proper behavior, they reward it. When leaders find improper behavior, they don’t reward it; they eliminate it.

The culture of an organization is built by both its words and its deeds. And one bad apple – especially a bad leader – can spoil the bunch!



It is easy to become buried in the day-to-day operations that drive our organization’s success. We should also make sure we are monitoring daily our personal beliefs and practices and constantly cultivating a positive, lawful culture within the organizations we are a part of.

Nurture your personal, professional, and company brands. Take care that you are not an author of, enabler for, and/or participant in bad behavior that will destroy either your personal brand or the brand of your organization. Lead by setting the right example. Once the brand is damaged and trust is lost, it could be lost forever!

Sales Talent Development

Transforming a Sales Team From Ordinary To Extra-Ordinary (EO)!

A well-staffed, skilled, and motivated sales team is vital to business success. When performing well, a sales team can ignite start-ups, fuel the growth of established companies, and power non-profit organizations to greater fund raising success during economic downturns. When not performing well, it can drag down revenue and profits of an organization and fuel the competition.

Ordinary sales teams yield ordinary results – only 50% of sales professionals achieve their assigned targets! Studies show that despite the effort to motivate, train, and coach sales professionals, the results continue to lag behind the effort. Even with an increased focus on (1) operations that adds more and more analytics to the running of the business, (2) enablement by doing either more or less training, and (3) management oversight of sales teams to make sales professionals do what we want, the results don’t seem to change much and we continue to get ordinary sales performance.

Enablement – specifically providing sales training and tools – always seems to be the one area that takes the brunt of the blame when sales professionals cannot sell. Studies show that 87% of knowledge acquired by sales professionals is lost when it is not reinforced and that 90% of all corporate sales training programs yielded 30-to-120-day increase in sales productivity before it returned to pre-training levels. Even knowing this, many of us believe that if we can just train more and provide better tools, we can change the results.

Extra-Ordinary results call for Extra-Ordinary measures! It is time to shift our thinking from enabling sales to developing sales!

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