By Elliot H. Clark
I have been chided before by our editorial team for sinking my fangs into a provider here andÂ there. I have rarely commented on the HR practitioner audience. Throughout 2020, there haveÂ been numerous important HR-related stories. From HRâs response to the coronavirus pandemicÂ to the role of HR in social progress with California Assembly Bill 5 (AB5), HR has been at theÂ forefront of the business news. But Wells Fargo is an HR story that has been broken up into fang-sizedÂ bitesâa story of the complete and utter failure of cultural management at one of AmericaâsÂ largest banks.
How do I loath thee? Let me count the ways. Four years ago, Wells Fargo was embroiled in a series of awful headlinesÂ about creating fraudulent banks accounts and loan accounts. At the time, CEO John Stumpf, who later resigned in theÂ wake of these scandals, blamed overzealous employees trying to maximize their commissions and succumbing to greed.Â This was cold comfort to the thousands of customers who had to actively engage in credit report repair and who wereÂ being harassed for loan payments on accounts they knew nothing about. Stumpf at the time promised an overhaul ofÂ Wells Fargoâs culture and compensation schemes to avoid this happening in the future. Hold that thought as we moveÂ chronologicallyâwe will come back to that issue after we take a side step into a recent diversity and inclusion fiasco.
Earlier this year, the new Wells Fargo CEO Charles Scharf commented on a call with employees that the bank had missedÂ its diversity hiring goals due to a âlack of qualified candidates.â The story broke that African American employees wereÂ disturbed by the characterization, with news reports using terms like âtone deafâ given the recent racial tensions inÂ North America. In my opinion, itâs a bit of a different issue. CEOs are careful in public communications. They have teamsÂ of communications and HR professionals reviewing and polishing their messages. I believe the bigger problem is CharlesÂ Scharf believes this or he would not have said it. In all likelihood, he heard this from members of his own team, includingÂ HR, who also believe it and have told him so. We all know diversity hiring is diffi cult. These groups are MINORITIES so lessÂ readily abundant than, oh, majorities. And, in some cases, salaries are bid up. In some cases, you have to hire for talentÂ and groom for skills with good graduate recruiting programs. There are plenty of highly qualified candidates amongstÂ the gender, ethnic, and racial minorities, so if you canât make your goals, you set the wrong goals or you didnât look hardÂ enough. Thatâs strike two…
This was followed shortly by the revelation that more than 100 employees had been terminated for filing false PayrollÂ Protection Program (PPP) applications, defrauding American taxpayers of millions of dollars. In a statement, CHROÂ David Galloreese indicated that the bank was âcooperating with law enforcement investigations.â When it involvesÂ one employee, itâs a screening issue; when it involves more than 100, itâs a cultural issue. Another example of rampantÂ dishonesty.
We talk a great deal in HR about the importance of an ethical, responsible, inclusive culture. In HRO Today, we shareÂ best practices and the âshining example on the hill.â But with Wells Fargo, itâs the other example: the corporate culturalÂ equivalent of a dumpster fire. And itâs ugly.
In the midst of this current pandemic, there are critical issues of ongoing operations to be addressed, but CEOs, CHROs,Â and HR leaders also have time to think about corporate culture on a long-term basis and evaluate screening not just forÂ background but for behaviors. Itâs time to think about training, recognition, and how to drive values. If you donât, thisÂ kind of de-evolution of culture will quickly occur.
Think about the previous Wells Fargo brand: one of the oldest banks in the nation and an organization you could trust.Â Now, it has become a brand that disrespects diverse populations, where large groups of employees are investigated by lawÂ enforcement every few years.
Sad, but most dumpster fires start small before they get out of control. Make sure you donât have one in the first place.