The Performance Improvement Blog

Culture Eats Strategy at Wells Fargo

"Culture eats strategy for breakfast," a quote famously attributed to Peter Drucker, is being played out dramatically in the crisis at Wells Fargo Bank. Apparently, the culture in the Wells Fargo workplace is not aligned with the espoused values of the company. This misalignment has tarnished the brand built on an image of trust and customer care, resulted in the dismissal of over 5,000 employees, poses a threat to the tenure of top executives, and resulted in a precipitous decline in the market value of the company.  

Wells Fargo CEO Stumpf has acknowledged that employees had opened bogus bank and credit card accounts for customers and then collected millions of dollars in illicit bank fees. In reporting on Stumpf’s testimony before the Senate Committee, Michael Corkery writes:

Mr. Stumpf disagreed with senators when they described the illicit sales as part of a deliberate scheme to increase the bank’s bottom line. He said the 5,300 employees who had been terminated over the issue — many of them earning $12 an hour — deserved to lose their jobs.

“The 5,300 were dishonest, and that is not part of our culture,” Mr. Stumpf said. “That is not scapegoating.”

This statement by Stumpf indicates that he does not realize that the dishonest behavior IS part of the Bank’s culture. It might not be what he hopes is the culture, but it surely is the normative actions of employees, recognized and supported by managers, and incentivized by the organization. The behavior is guided by the beliefs and assumptions of employees; it’s how they do their work, regardless of what it says in the company’s statement of values.

If you tell 12 dollar an hour employees that they can make more money by opening credit card accounts and “everyone is doing it” and maybe even, “Don’t worry about it, customers can always cancel”, then the company is rewarding unethical and, in some cases, possibly illegal behavior. And evidence suggests this has been going on for years. That’s culture trumping strategy!

Ethics training required of every employee seems to have had little impact on behavior. This is understandable given the culture of the organization. Whatever employees learned about integrity, honesty, and trust in the classroom was quickly forgotten under the pressure of cross-selling and making their numbers.

Wells Fargo is not alone in its failure to align workplace expectations and behavior with the strategic goals set by management. This disconnect can have very serious consequences for companies, as we are seeing at Wells Fargo. Every organization needs to periodically check to make sure that the actions being rewarded on-the-job are consistent with its espoused values and goals.

Know the Hidden Curriculum of Work

Do you know what you really need to know to be successful in your job? You won’t find it in company training programs, or in an MBA program, or your professional association’s certification workshops. But this learning is more important for survival and success in the workplace over the long term.  

Jesse Sostrin calls this the “hidden curriculum”. In a post titled, The Hidden Curriculum of Work, he writes:

Nobody told you this, but the day you were hired you actually accepted two jobs. The first was the position you interviewed for, including all of the tasks outlined in that job description. The second
“job-within-the-job” included the unspoken, unwritten work that, among other challenges, requires you to manage constant change, collaborate well with others, navigate workplace politics, and get your best work done in an environment of shrinking resources and increasing demands. Nobody trained you to succeed in this hidden work, and you have to learn how to confront its everyday pitfalls. And although you can reach out to trusted colleagues for input, the pace of work and pressure to perform often limit our willingness to reflect, formulate questions, and take the time to seek guidance.

These two elements combined — the challenges of your job-within-the-job plus the need to add value to your organization through continuous learning and performance — represent what I call the hidden curriculum of work.

I think that learning from this "hidden curriculum" requires knowing how to learn. The ability to “reflect, formulate questions, and…seek guidance” has to be developed in people. We shouldn’t assume that employees already know how to learn in this way. Managers need to help their direct reports learn how to learn from the "hidden curriculum." That is, how to receive feedback, how to inquire, how to ask for help, and how to judge the quality and accuracy of information. Being reflective, in the sense of being open and honest about your strengths and weaknesses and what you need to learn, is not something we all do well but is essential to learning in the workplace.

A critical element of learning the hidden curriculum is co-worker and manager involvement. Much of what people need to learn in the workplace they cannot learn alone. They need to share their learning with others and they need feedback to help them assess how well they are doing, what they should keep doing, and what needs to change. You might not need this kind of social learning with the visible curriculum, but it is essential to the "hidden curriculum."

Awareness of the "hidden curriculum" is all that much more important as the rate of change in technology increases, especially artificial intelligence. Alexandra Levit, in an article for The New York Times titled, Thriving in the Robot Workplace, writes:

I think the only way forward is to look at artificial intelligence developments as an opportunity rather than a threat. We need the mind-set that success is no longer about our level of knowledge but about our level of creative intelligence. If we accept the process of lifelong learning, in which we adapt to new ways of working as technology improves, we’ll always find roles that take advantage of our best qualities.

Both Sostrin and Levit are making the point that the workplace is constantly changing from social interactions and technology and, therefore, to be successful in the workplace we need to be continually learning and adapting to the environment around us. And we need leaders that recognize the “hidden curriculum” and this need for life-long learning and provide the conditions and resources to support continuous learning in the workplace.

The Changing World of Work

Microsoft and PopTech have created an eight part video series that describes how the world of work is changing, in both the company workplace and the global workplace.

 

The videos present these eight core themes:

1. Digital technology and an abundance of information are causing profound changes in the way people work.
2. To be competitive, companies are shifting from a focus on “efficiency of process” to a focus on “effectiveness of outcomes.”
3. Companies are being more responsive to the decision-making and information needs of employees.
4. Employees are more interconnected and, therefore, more interested in a collective response to business issues.
5. Leaders are developing adaptive organizations that depend on collaboration and trust.
6. Human contact matters; therefore, workplaces are being designed to increase collaboration.
7. Workplaces are being designed to accommodate a wide variety of spaces that fit the range of workers’ needs.
8. Automation is eliminating jobs but also providing an opportunity to create new, more creative jobs.

The 23 notable speakers in this video series emphasize that continuous learning must be a part of this new workplace that is local and global. They say that we don’t know what tomorrow will bring so we need to continually learn how to adapt to whatever comes at us and whatever we seek to change. And given this rapid transformation and increasingly networked world, adaptability is key.  Stanley McChrystal says it this way:

…when you combine the two, speed and interconnectedness, suddenly you have this unpredictability, so you don’t know what tomorrow will be like, you don’t know what next week, and you certainly don’t know next year is like…so you’ve got to have adaptability to respond to changing conditions so organically, it has to be in the DNA of the organization so that it doesn’t have to come from top down directives that says, “now we are going to produce a new version of this”. Instead, it allows the organization to learn, adjust, and adapt automatically.