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Bova (2018, pp. 175-179) includes a chapter (or "story") on Wells Fargo and its debacle of (un)ethical leadership, which I quote in its entirety here:

Wells Fargo: A Rhyme Is not a Reason

"Life imitates Art far more than Art imitates Life." -- Oscar Wilde, "The Decay of Lying: An Observation."

Glengarry Glen Ross is a 1984 Pulitzer Prize-winning play by David Mamet that was made into a film in 1992. One could argue that the movie is one of the most unflattering depictions of the job of being a salesperson Hollywood has ever made. A group of desperate Chicago real estate salesmen are driven to engage in any number of unethical, illegal acts --- from lies and flattery to bribery, threats, intimidation, and burglary --- to sell undesirable real estate to unwitting prospective buyers. 

Alec Baldwin's character, Blake, a motivational sales trainer, gives an angry and verbally abusive speech to persuade them to close more sales or lose their jobs. "We're adding something special to this month's sales contest. First prize is a Cadillac Eldorado. Second prize is a set of steak knives. Third prize -- you're fired!"

Baldwin's character may have been fictional, but he exemplified --- and inspired --- a cutthroat, unscrupulous sales culture that even found echoes in Bernie Madoff's infamous Ponzi scheme.

HIGH-PRESSURE SALES CULTURE GOES AWRY

Now, once again, the sales profession is challenged to defend its integrity from an example of life imitating art. Wells Fargo --- founded in 1852 as a stagecoach express to carry valuable goods to and from the gold mines to the West --- is now the world's second-largest bank by market capitalization. After a flurry of acquisitions and mergers in the 1990s and early 2000s, then company CEO Dick Kovacevich had a unique view on the role of banks and how best to 'sell money.'

Kovacevich looked for ways to make the banking experience similar to other business-to-consumer (B2C) businesses. In Kovacevich's mind, bank branches were 'stores' and bankers were 'salespeople' whose job it was to 'cross-sell' --- which meant getting 'customers' --- not clients --- to buy as many products as possible. "Products' for the bank were things like checking/savings accounts, lines of credit, and mortgages.

While Kovacevich thought he was getting the company focused on  Customer Experience, in reality his mandates created a high-pressure sales culture. He had launched an initiative called 'Going for Gr-Eight,' which meant getting the customers to buy eight products from the bank. Like at every other sales organization, there were status updates on daily goals. At Wells Fargo this one may have been a bit extreme. There was a branch manager call in the morning about 'how you were going to hit your sales goal, and if you didn't, you'd have a call in the afternoon to explain why and how you were going to fix it.' This kind of high-pressure management practice never ends well: it either pushes good people out of the organization because the environment becomes a bit too toxic, competitive, and aggressive, or  people start gaming the system to meet the unrealistic goals . In this case, both happened --- and continued even after Kovacevich retired, multiple employees and executives complained, and a new CEO, John Stumpf, came on board.

Maybe one of Stumpf's greatest mistakes, which ultimately led to his downfall, was that he followed the practices that Kovacevich had put in motion. Even with the warning signs in the 1990s, nothing changed. The bad sales practices had become the new culture --- and they ultimately came back to bite Wells Fargo. Stumpf never deviated from the sales practices Kovacevich had implemented --- including those that were creating a less-than-ethical sales culture. There is no way to know for sure why these sale practices continued, but this statement made to investors unfortunately gives insight as to why management pushed for customers to get more products from them: ' customers who had five products with Wells Fargo were three times as profitable as those with three products, while those with eight products were five times as profitable. Additionally, the more accounts a customer had, the less likely it was that he or she would switch to another bank paying higher rates of interest.'

Fast-forward to September 2016. The customer-banking giant (and the biggest U.S. mortgage lender) was facing its biggest scandal in its history. It fired 5,300 people, most of whom were low-level employees, as well as 10 executives. Other executives chose to step down or retire. One of them was Carrie Tolstedt, executive vice president of community banking, who oversaw over 100,000 tellers and other frontline employees at more than 6,200 Wells Fargo branches. She was paid $9.5 million in 2015 because of her 'strong cross-selling ratio' and her work 'reinforcing a strong risk culture.' Wells Fargo CEO John Stumpf subsequently resigned under pressure. The board has since clawed back over $100 million in stock and executive compensation, paid $185 million to regulators, and settled a class-action suit for $142 billion.

What went wrong? How did Wells Fargo stray so far from its longstanding culture of integrity and putting the customer first? Wells Fargo has since acknowledged that its employees were under too much pressure to meet aggressive sales targets --- sometimes as high as twenty banking products a day like a new account, a mortgage, a retirement account, or even online banking --- whatever it took. During the investigation, regulators found that Wells Fargo had 3.5 million accounts that were potentially opened without the customer's permission between 2009 and 2016. It also found that 'the Bank's sales practices were unethical; the Bank's actions caused harm to consumers; and Bank management had not responded promptly to address these issues.'

According to Wells Fargo, its vision is to 'satisfy our customers' needs, and help them succeed financially.' The company emphasizes its mission: 'Our vision has nothing to do with transactions, pushing products, or getting bigger for the sake of bigness.  It's about building lifelong relationships one customer at a time .... We strive to be recognized by our stakeholders as setting the standard among the world's great companies for integrity and principled performance. This is more than just doing the right thing. We also have to do it in the right way.' Unfortunately, they lost sight of this vision along the way.

This one story uncovers the unsavory tactics used when faced with a highly aggressive sales culture. It can happen in any industry, not just banking. The lesson here is: even when pursuing hyper-growth, never sidestep ethical behavior in pursuit of higher sales numbers and don't ever create a sales culture that rewards bad behavior or forces people to game the system just to maintain their jobs.  Do what's right by your sales force so that they can do what's right for your customers. Every time.

WELLS FARGO: KEY TAKEAWAYS

· One of the biggest mistakes in reasoning made by Kovacevich was attributing causation to correlation when he noticed that customers with more accounts did more business with the bank.

· A high-pressure, top-down management sales environment is not the only reason sales organizations can find themselves on the wrong side of doing what's right for the customer and/or the business. Sometimes it can be the lack of training, tools, and processes, which are the reasons sales gets off track. Regardless of the reason, unethical behavior in sales must never be tolerated. 

· It would be fair to say that Wells Fargo  wanted to deliver a better  Customer Experience than its competitors. It would also be fair to say that they were very focused on  Customer Base Penetration and  Product Expansion by trying to inspire existing customers to buy more products from them. All three of those paths plus  Optimize Sales in combination can be a game changer if done well. However, Wells Fargo failed, and failed miserably, on the (internal) people side of those sales efforts. The pressure from above to hit unrealistic sales targets, coupled with a complacent management team, created the perfect storm for bad (sales) behavior. If you have a situation arise like Wells Fargo did in the  Optimize Sales path and you ignore it, it can and will wipe out all of the efforts and progress you have made in the other paths.

· Sometimes bad sales behavior follows bad sales management . As leaders, it is our job to inspire people and help them realize ways that they can achieve their best performance. Overmanaging isn't one of those ways. Command and control tactics are bound to backfire, whether you are managing a team of two or a team of two thousand. The last-mile employees, those who are facing customers, are the voice of your brand.

Work Cited:  Bova, Tiffany. 2018. Growth IQ: Get Smarter About Building Your Company's Future. New York: Portfolio/Penguin. Pp. 175-179.