The cleanup effort over at Wells Fargo must be going swimmingly. Despite plummeting retail banking activity and multiple ongoing investigations, the bank's executives have managed to find time for an intriguing if extraneous academic exercise: an anthropological foray into the cultural practices and mores of the tribe known as “Wells Fargo Employees.”
Chief Executive Timothy Sloan said at a company town hall Tuesday that the bank is aiming to survey all its roughly 269,000 employees about its culture, working with an academic who specializes in this area. The bank declined to name the academic, though the 20- to 30-minute survey will roll out in May.
There happens to be a point to the scholarly diversion, other than the intrinsic value of expanding the world's store of scientific knowledge:
“Our goal is to uncover our culture’s positive attributes and its potential weaknesses, so our leaders can understand how best to foster an ethical, inclusive, and customer-focused culture,” Mr. Sloan said.
It sounds like a fascinating, if tangential, use of time for a company whose brand has become synonymous with ethical lapse. But it should give Wells Fargo's remaining investors pause that the bank's executives are hoping to find fault for the company's cultural failings in its 269,000 employees and not, say, the C-suite.
We all know, in broad strokes, what drove the wrongdoing behind Wells Fargo's sham account scandal. It wasn't some pathological cultural quirk that led retail employees to forge millions of customer signatures and open millions of unrequested accounts. It was fantastical sales quotas, which were chosen not out of any sober analysis but out of purely aesthetic considerations – as former CEO John Stumpf explained in the bank's 2010 annual report:
I’m often asked why we set a cross-sell goal of eight. The answer is, it rhymed with “great.” Perhaps our new cheer should be: “Let’s go again, for ten!”
Retail bankers did bad stuff because if they didn't they'd lose their jobs or not get paid. Regional managers tolerated and encouraged the bad stuff because their bonuses rested on sales benchmarks. Compliance teams made sure anyone bucking the trend by reporting ethical failures were shown the door. If any of this was cultural, it was adaptive, not inborn.
In other words, Tim Sloan has clearly not read read his Marx. The nineteenth-century business management expert held that the characteristics of a group's culture were a superstructure that was secondary to the group's economic base. If Marx's theory holds (a subject of some dispute) then most of the cultural problems rightfully identified at Wells Fargo stemmed from the economic incentives senior management imposed, not some weird social affliction.
Wells Fargo itself has provided plenty of evidence that this is the case. After eliminating sales goals, new account openings did exactly what you'd expect and fell precipitously. But there's some silver lining in the bank's regular retail business updates: Customer satisfaction and loyalty have been consistently on the mend since their initial plunge when the scandal broke.
Of course, that doesn't mean the bank shouldn't examine its internal culture after so many years of ethical rot. An employee survey won't hurt on that front. But it strains our credulity when Wells Fargo's execs opine about employee culture as the root of the bank's problems – with regulators nodding dutifully along – while failing to hold themselves to equal scrutiny, other than a couple sacrificial lambs. Which does sound like something of a cultural failing.