The Buy-In: Why Cohesiveness Is Critical To Organizational Change

These days, I’ve been feeling in need of a support group. I’ve been dealing with my current condition for about 18 months, but it stretches back well over two years. Public awareness is coalescing around this condition poorly, and it’s driving me crazy. Writing this is one part academic, one part therapeutic. I need to do this. So without further ado (and at risk of being doxxed),

Hi. I’m Joey, and I work for Wells Fargo.

Nearly everyone has seen the proverbial mud that the name of the well-known consumer lending bank has been dragged through in recent weeks. The allegations of widespread fraud, intermingled with a toxic environment of high-pressure sales and cheating (to the detriment of the clients who put their trust in the bank officers who subsequently took advantage of them) has been front page news for weeks. Many depositors have withdrawn their accounts, Congress is on a mission to lop the heads off of careers (rightly so), and my stock options have devalued to the point where I don’t want to even look at the login screen to my 401(k).

And it all could have been avoided. It very nearly was, and if senior leaders within the company had been more effective at communicating within the ranks of management, they likely would have achieved significant organizational change.

The current controversy, while just now becoming publicly known, has been old news for years in Wells Fargo circles. The main story ties back to a lawsuit filed by the city of Los Angeles in May of 2015, alleging “‘unfair, unlawful and fraudulent conduct” through a pervasive culture of high-pressure sales” (Reckard, 2015). Comparatively, media outlets have used each of those terms like confetti since the scandal broke in September.

Even before that, the company was trying to change.

Leading up to the end of 2014, it began to become apparent that there was a cultural problem at Wells. Even as early as 2011, there were allegations of “employees [opening] duplicate accounts, sometimes without customers’ knowledge” (Reckard, 2016). At the time, I was a newly minted employee, still a rookie banker, when it was announced that there would be ‘major changes’ to the way we did business. At the time, everything that could be measured was measured daily. If possible, hourly ad hoc reports were requested. Daily reports were comprehensive, and the principal tool used by managers to gauge effectiveness of personnel. Everything was in a stack-ranking format; the highest performers were always on the top of the list, fostering competition between retail bankers to ‘out-sell’ each other. When the ‘major changes’ came down at the start of 2015, the first thing to go was the stack-ranking, followed shortly thereafter by some of the more insidious reporting like the hourly ad hoc reports. Language was changed in the sales incentive programs to promote a less cutthroat, “sell sell sell” mentality.

Nothing really changed. In fact, change was rather heavily resisted in my area. When reports were disabled and removed from the system, lower-level executives and area managers simply began demanding that their direct reports create and send them the reports manually, via email, much to the chagrin of branch managers and senior executives alike. When minimum goals were redacted, those same lower-level executives and area managers simply implemented their own minimum goals. When manual reporting was banned by senior leadership (yes, it actually got that bad), emails were replaced by thrice-a-day phone calls. Finally, in what felt internally like desperation, the company did the unthinkable: all daily reporting was blocked, and the model shifted to a weekly basis instead, with managers limited to no more than two conference calls with subordinates per week.

It’s necessary to explain the progression in order to demonstrate one very important fact: change was being attempted by senior executives; whether out of fear or altruism, the intent was very much there. According to Schein’s planned change theory, top executives were trying (and failing) to kick off the process of unfreezing, “creating the motivation to change” (Penn State University, 2016). This failed for a myriad of reasons, from the level of entrenchment in the culture to the lack of transparent communication regarding the need to modify behaviors. Following the Schein model, unfreezing was a failure because the three mechanisms it is comprised of never fully came together, and portions were omitted. Disconfirmation, “the process of showing organizational members that their current behaviors or attitudes are incorrect” (Penn State University, 2016), was half-heartedly approached with programs like the seminal “Ethically Speaking” newsletter that was sent out on Mondays, outlining examples of unfair, abusive, or deceptive sales practices. The second mechanism of unfreezing, “creating anxiety or guilt in organizational members” (Penn State University, 2016), never materialized at all, with a few outlier exceptions. The third mechanism, creating psychological safety, or “showing organizational members that there is an alternative to their current behaviors that will reduce the guilt and anxiety they are experiencing” (Penn State University, 2016) was undercut by the fact that the second mechanism was never triggered, and by the fact that while one thing was being said by high-level executives, the awards, bonuses, recognition, promotions, and accolades employees sought after were bestowed upon one demographic: the highest sellers.

That being the case, with the first step of the 3-step model to organizational change dead on arrival, the second step of actually implementing changes could never be effective; naturally, this makes refreezing, the third and final step, a moot point, trapped in a proverbial purgatory of non-existence without the effective use of the first two. The fact that daily reporting was replaced by managers demanding manual daily reporting is a testament to the ineffectual nature of change without unfreezing. It also speaks to another issue and the one that, in my own opinion, is the lynchpin of the unfreezing’s failure; a lack of buy-in. The half-heartedness with which the company approached their attempt at organizational change was underscored by the fact that no one bought in to the change. With rewards still limited to high sellers, what motivation did the (relatively) few employees cheating in the trenches have to change? What motivation did managers, whose upward mobility pivoted on the sales figures of their subordinate managers and producing staff, have to try and change?

Instead of addressing the problem directly, a soft approach of weekly memos, quarterly conference calls, and slow removal of incentive reporting was taken. No one wanted to address the elephant in the room; that certain area managers and presidents in certain locations were being unethical was widely known. Many of our leaders disregarded talk of it, not because they were guilty of taking part in the abusive practices, but because they themselves weren’t supporting such behaviors, and didn’t think it was their concern. In more rural states like Wyoming, we had it relatively easy; our own district’s internal culture was very sales-cheating averse. The districts and areas that were doing such things were scoffed at. They were an abstract concept; a bunch of idiots that were going to be standing in the unemployment line, barred from working in the financial sector ever again if they got caught.  The fact that Wells Fargo has fired over 5,300 employees over ethical concerns in the last five years (Egan, 2016) suggests that the scoffing wasn’t that far off the mark in many cases. But still, the problem wasn’t really addressed, because the three mechanisms of unfreezing were never fully deployed.

Since the nationwide version of the story that company employees have been dealing with for years broke, I’ve been on no less than six conference calls with different business lines, discussing how to increase sales volume. It’s as if the leadership between my level and the top of the crop simply cannot comprehend the paradigm shift that must happen, despite the fact that Wells Fargo announced publicly that all of its sales incentive bonus goals will be discontinued. Many area managers and lower-level executives still haven’t changed their tune, and it is beginning to look like they will either be forced to change, or will be removed. Already, I’ve had two superiors unceremoniously fired in the last three months (to the point of the company trying to instill change, these firings happened well before news broke on the topic of sales practices). I fear that many more will follow if the message of change that has been trying to get through doesn’t come.

The good news is that, in the wake of the media blitz, change finally appears to be coming. There is nothing quite like being asked fifteen times a day by clients if they have any accounts in their name that they are unaware of to help along the process of disconfirmation of the behavior. For bankers who have cheated and not been caught, anxiety is now very likely a constant companion; the removal of sales goals, with a different incentive plan focused more thoroughly on customer satisfaction surveys, is generating psychological safety. Sales accolades are gone, with new, “client-centric” accolades being levied in their place. The unfreezing step is now happening, and is visible. As for change, and refreezing… well, we’ll have to wait and see what that looks like.

NOTE: This is not a confessional; I can honestly say that not I, my team, nor any of my colleagues currently employed by the company have ever engaged in the kind of behavior displayed in the news. The truth is that we didn’t need to cheat to meet our goals. A blind eye was turned to it in some cases, and the results have been rough. The people who did it received a couple hundred bucks’ short term benefit, usually followed by a spate of unemployment as the long term consequence. I have high hopes for the company’s future.

**Image of WFC stock prices last 12 months. Note in particular the sharp drop in September (SlideShare.com, n.d.).

**An example of Wells Fargo’s ratings from a high-level overview investment meeting just months earlier (SlideShare.com, n.d.).

 

Egan, M. (2016). 5,300 Wells Fargo employees fired over 2 million phony accounts. CNN. Retrieved from http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/

Penn State University. (2016). OLEAD 410, Lesson 5: Learning and Change In A Global Setting. Retrieved from https://psu.instructure.com/courses/1802572/modules/items/21179082

Reckard, E. (2015). LA Sues Wells Fargo, Alleging ‘Unlawful and Fraudulent Conduct.’ The Los Angeles Times, May 4, 2015. Retrieved from http://www.latimes.com/business/la-fi-wells-fargo-suit-20150505-story.html

Reckard, E. (2013). Wells Fargo’s Pressure-Cooker Sales Culture Comes At A Cost. The Los Angeles Times, December 21, 2013. Retrieved from http://www.latimes.com/business/la-fi-wells-fargo-sale-pressure-20131222-story.html