The authors of a recent HBR article, Wells Fargo and the Slippery Slope of Sales Incentives, provided the answer “to meet sales quotas and earn incentives” to the question “why they (they being the lower level employees of Wells Fargo) did this in the first place.” The “this” being unethical if not illegally selling and charging customers for services they did not need or request. It seems that the perspective here is that the employees where at fault, after all they are the ones who acted fraudulently! The authors support this with reference to previous accounts of similar misconduct by employees of Sears, whose pay was dependent upon commission for services and parts sold, for selling needless repairs to customers.
Note how the cause and blame is always the individual worker—the poor sap who is an employee. In today’s highly mechanized and financialized world these individuals are parts collectively comprising what is now often referred to as human capital.
These examples are not the only companies instituting such performance management practices whereby numerical goals and extrinsic motivation—that is fear-based methods—are the principle elements. In fact the vast majority of companies—particularly in banking—rely on such means to control behavior of employees in pursuit of profit and shareholder-value maximization. So why is this management approach so common?
Business executives have been trained to have a mechanistic materialist worldview as their lens for perceiving and understanding the world, particularly the world of business. In other words the world/Nature is a mathematically explainable machine where every effect is linearly and directly traceable to a definite cause, Nature is to be dominated and exploited, people are independent individuals, people are externally initiated—people are not self-initiated—and value means material value. Accordingly, general speaking, the business curriculum trains people as technologists in order to maintain the effectiveness of the profit-producing machine.
The following from By The Numbers provides a bit more explanation:
The economic system has a considerable influence on the way business is conducted since it encourages enterprises operating within it to align with its material growth maximization maxim…Accordingly, those with administrative authority over the enterprise pursue material growth, monetizing all aspects of the company in the process…In fact, the effectiveness of a manager is most often determined by the numbers, by his/her P&L statement.
Not only is most everything translated into monetary terms it is accepted management practice to reduce the evaluation of both individual and organizational performance—very complex issues—to a simple either/or dichotomy. That is, evaluation is reduced to a good versus bad judgment relative to what is expected. The common practice is to assess and evaluate performance with the aid of a variance report, which does for management what numbers does for painting: Making it simple and formulaic with no need for understanding and critical insight. Correspondingly, the MBA—the ticket to be punched on the way to the corner office—is a highly quantitative curriculum designed to prepare future captains of industry for the quantitative management of business.
In capitalist society, the many people hold the view and relate to the captains of industry as if they are the smartest ones in the room. So it is understandable how they themselves might even come to think that they are.
Even though they might see themselves as ‘the creatives’ in society—job creators is often the moniker they speak of themselves as—the majority are capable of only painting by the numbers. We must wonder whether those who’ve successfully climbed the career ladder to the executive suite even acknowledge or understand this?
Unknowing in a Human World
A critical viewing the C-Span video of John Stumpf testifying before the Senate Banking Committee is quite revealing. It seemed as though he was focused on deflecting, not reflecting. Speaking either to his untruthfulness and insincerity or to his lack of understanding that an organization’s systems and culture do affect people’s behavior, Mr. Stumpf said he had no idea why people did this—really! Could it be he is absolutely ignorant of the human dynamics within organizations? Such a person should not be leading any organization, let alone one as influential to society as Wells Fargo.
Moreover, he showed no caring response such as empathy for the many adversely impacted by his organization’s actions or embarrassment over the very manipulative system of performance management practiced within his organization. Could it be he is incapable of human sensibilities, such as care and concern for people?
One could conclude he was well prepared for the position of CEO/Chairmen—after all we shape the leaders we get. He clearly has been successful in climbing to the top of the management hierarchy within the capitalist system where greed as a behavioral trait is sought and developed. It is a system that advances the primacy of material self-interest and fosters a results oriented culture wherein getting results irrespective of means is what counts. The world of many business minded people is one wherein maximizing one’s material gain is primary and humanness is expunged out of what is inherently a human world. How likely is it that he is just another corporate psychopath?
Corporate Image as Lever
Captains of industry intellectually know that people prefer quality, even though they are incapable of personally internalizing it. Quality is rarely the intent, quantity in revenue and profit is. However the idea of quality is used as a lever to manipulate and exploit others. This is why “business executives tell us in so many ways (e.g. we value you our customer, we are committed to your safety and satisfaction, we care about our employees, etc) that providing quality to those they serve is very if not utmost important.” Again this illustrates the tendency of those in authority within corporations to have quite undeveloped human sensibilities, especially when profit maximization is everything.
More specifically, through its value statement Wells Fargo portrays itself (and the guiding principles of its management) as caring about people (employees and customers alike) and such caring values guide “every conversation, decision and interaction.” Yet at decision making time when managing people and their performance the maximization of profit is primary, with image of quality being the useful lever. Why else would such a detrimental program to customers (and employees) involving fraudulent account openings continue for several years beyond 2011, the year these practices came to light?
Moreover, we mustn’t forget that capitalism and its materialist mechanistic worldview, the very system within which business is conducted, has no moral precept. All that is required is that each person, as an independent individual, seeks to enhance his/her condition materially, each must act solely out of selfish concern—there is no ‘We’, just a bunch of ‘Me’s’ where others are objects for exploitation. So as concern for results dominate relationships become reduced to economic transactions between objects.
If Wells Fargo—or any organization for that matter—truly cared about employees, about customers and about the society as a collective of people, as human beings, then they wouldn’t act as they do. More specifically they wouldn’t manipulate and exploit people; they wouldn’t use fear-based methods leveraging basic (deficit) needs fulfillment as their go-to means of getting others to do what they want. Stimulus-response methods (i.e. behaviorism) coupled with the use of extrinsic motivation methods instills in people an externally referential way of being. When externally referential, they aren’t guided by their own values, principles and beliefs but by those of positional authority, hence they are easily manipulated and exploited.
While I can’t speak to the very specifics of Wells Fargo’s performance management system it is a safe bet that to get others to act in support of the organization’s goals, their processes involve setting a target performance level—a quota—for each department and individual within. It is likely management in authority legislated a performance policy that required every individual to meet or exceed a numerical goal. Holding every individual accountable for attaining this performance goal –for meeting their quota—would lead employees to feel their income if not their job was on the line.
Further as for the purpose of judging individuals by their performance against the goal, people are labeled as either performers or non-performers. As stated in Managing Performance, “Management gets rewarded for delivering results, and those (employees) who perform in their work get results. Hence (quite understandably) management must identify and embrace performers. The more performers there are the better (and easier) it is, especially for management. ” So who would want to be thought of as a non-performer, as a person of little worth (to the organization)? The fear welling up under such an environment is palpable. Controlling others through fear, no doubt will get them moving in the direction one desires! It is the way scientific management drives people for results. In this context, management is all about acting upon others to manipulate and exploit for one’s own gain. When management is motivated employees are moved!
Wells Fargo management was not only complicit in this fraud, those in authority had the motivation to provide the conditions—the antecedents and continued support—that were needed for it to be carried out! It is quite clear Mr. Stumpf greatly benefited—to the tune of millions of dollars—from the actions of the 5,300 employees he fired. Employees were simply complying with the performance quota system that management in authority instituted. Explaining away more than five thousand people—Mr. Stumpf characterizing it as only 1%–acting uniformly throughout the organization, and it not being something that management initiates and supports is not logical—it doesn’t pass the smell test.
So scapegoating by placing blame on individuals—yes 5,300 individuals—for this and expecting reasonable and sane people to believe you it is quite laughable. Yet for people absent of an authentic sense of self offering such an argument is quite common among leaders in capitalism’s material value orientation. As noted in Leadership Untainted, “unless your mind is closed and unreflective, it should be at least clear if not obvious that the capitalist’s worldview and associated value orientation are not in harmony with the development of our humanness.”
It is not that Mr. Stumpf, and others very much like him, is clueless about driving for results. He no doubt is a good technologist of scientific management and mechanic of the profit-producing machine; clearly he can drive others to achieve results. What such people are clueless about is leading a human system for the benefit of all who are touched by it.
Leading in a Human World
The essence of leadership is about engaging with others in humanly productive relationships whereby their, as well as your, human potential is actualized. Unfortunately, the value orientation of capitalism leads one to fixate on material growth and profit maximization, relating to people as objects to be manipulated and exploited to this end.
So it wouldn’t be a surprise if we found the conversation within Wells Fargo now be about how do we fix our image. The surprise would be if it was about how do we change our intent and the way we manage for the betterment of all. As discussed in Objects of Subjects, for the latter question, “a good first step is to cease driving for results and begin enabling potential—be a mentor of people, not a mechanic of the machine. This means not treating people as objects but rather relating to them as subjects, core-to-core. To do this those in authority will have to stop relying on positional authority and begin developing their personhood as a way of influence.” But then again, this way of being and managing would not support the capitalist system and align with its worldview. Hence the likelihood of this happening is slim to none—unless of course the intent of business is fundamentally changed.