by D. Kevin Berchelmann | Sep 14, 2016 | Brazen Leader, Executive Improvement, Human Resources, Organizational Effectiveness
I hate to call anyone a crook. It sounds unseemly and judgmental, and just a tad juvenile…
Ah, to hell with that. Wells Fargo, you guys are a bunch of crooks. Specifically, the leadership involved in the fraudulent account processing debacle. 
Yes, the leadership, not the schmucks that
leadership whacked in the process.
The numbers, for you analytical types:
- 565,443 — The number of unauthorized credit card applications filed by Wells Fargo’s community banking division
- 1,534,280 — The number of unauthorized deposit accounts opened by Wells Fargo’s community banking division
- 5,300+ — The number of schmucks (mentioned above) fired for actually opening these fraudulent accounts
- $185,000,000 — The amount of the fine levied on Wells Fargo for this fraudulent activity
- $200,000,000 — The amount of stock held by John Stumpf (just “Stumpy” from here on)
- $19,000,000 — The amount of money Stumpy hauled in last year.
- $125,000,000 — The amount to be paid to Carrie Tolstedt, the executive in charge of these fraudulent activities
- $20,000,000,000 — The approximate dollars in annual profit made by Wells Fargo
- 0 — The number of senior leaders held accountable for this travesty
Here’s the deal… there’s simply no way that 5,300 people–all doing the same job for the same division–can be fired for fraudulent (potentially criminal) acts, and no one in real leadership was aware of the problem. Just no way. Think about it–that many people whacked, same division, same job, all for fraudulent activities in a bank. And no one noticed? That’s your story? Seriously?
I call bullshit.
If you hold a gun to someone’s head and say, slap Bill over there or I’ll pull the trigger, well, Bill’s about to get slapped. It doesn’t matter that you aren’t the violent type, that you’ve never hit anyone in your life, or that Bill is a helluva good guy. None of that matters. What matters is you have a gun to your head. The schmucks fired at Wells Fargo, all likely justified for doing something way wrong, had guns to their heads.
Over aggressive daily sales quotas; hourly (yes, you read that right)–hourly–conference calls to make sure your quotas are on track; after-school detention overtime and forced marches on Saturdays for anyone coming up short. And if you came up short after two months, you got whacked. I’d say that feels like a gun to the head. Held there by senior leadership at Wells Fargo.
The push was relentless, and making these arguably unreasonable quotas was not simply an issue of performance–some personal bankers had as much as 20% of their total compensation tied up in sales commissions from these extra accounts. In other words, another gun. I’m not excusing criminal or unethical behavior by those doing it; the firings were likely justified, and behavior like that is deplorable no matter the incentive. But to just punish over 5,000 workers while senior leadership is not just held unaccountable, but rewarded with mucho dinero?
In a 2013 interview, Wells Fargo CFO Timothy Sloan said “I’m not aware of any overbearing sales culture.” Where’s that bullshit flag again…? I’m throwing it. Of course, Timmy had good reason for–and was rewarded for–his ignorance; he’s been promoted twice since that interview, and is now heir apparent to Stumpy himself. Things that make you go hmmm. I’m certain it’s just a coincidence…
Stumpy doubled-down on his perception of executive innocence in a Sep 13 WSJ article, stating “There was no incentive to do bad things,” and that “…some employees didn’t honor the bank’s culture.” And what, exactly, might that culture be, bigshot? My favorite Stumpy quote: “I feel accountable.” Not “I am accountable.” Tweeeeet! Throwing my flag again…
Leadership matters. Ethics, integrity, even simple honesty, are all driven from the top. That which you condone, allow or permit, through action, inaction or positive consequence, is what you get. Culture really is that simple. Honest leaders get honest employees (for the most part). Ethical senior leadership promotes ethics and integrity throughout. Conversely, fast-and-loose behavior at the top creates a culture of shady corner-cutting throughout the organization. Plausible deniability is a good movie line, but it sucks when used by senior leaders to allow bad behaviors to boost profits.
This is Stumpy.
Stumpy likes money
Stumpy doesn’t question where it comes from
Stumpy’s people get him money
Stumpy makes lots of money
Don’t be like Stumpy
Be Brazen…
by D. Kevin Berchelmann | Aug 28, 2016 | Brazen Leader, Miscellaneous Business Topics, Organizational Effectiveness
Don’t get caught with your pants down.
That idiom has its origins in the Roman Emperor Caracalla, later known as Marcus Aurelius. He was known as one of the bad-ass Emperors somewhere before 200AD. Legend has it he was killed while relieving himself, hence 
“with his pants down.” Though it may actually have been a robe. Or chainmail. Whatever he was wearing, he had it down and he was killed. Going forward, warriors took care of their business with sword in hand, so not to be “caught with their pants down.”
So, what does this incredibly interesting trivia lesson mean to you? Funny you should ask…
Simply put, in the people equation, demand has—and will continue to—outpace supply. Our recent 2016 Survey of Senior Leadership (SSL) ranked Talent Acquisition/Talent Management as the #2 Leadership Challenge today. Behind only Revenue/ Earnings Enhancement, the perennial #1 for many years.
I know what you’re thinking… War for Talent?? Seriously? Oil is at or around $50. Global layoffs in oil & gas exceed 350k in the past 18 months. Article after article tells of the woes of recent graduates, unable to find anything but McJobs after incurring a bucket-load of student debt.
I was born at night, you say, but not last night.
Yeah well, listen up—it’s happening. We’ve got something of a perfect storm brewing for talent.
Demographics: Baby boomers continue their exodus. And many are stepping aside from leadership roles even if not leaving the workforce. Millennials aren’t just looking for a job, they are seeking specific roles with specific returns and rewards. Simply “needing to work” isn’t enough to cause action if the position and company aren’t a perceived fit.
Market stabilizations, though welcome, mean that hiring simply must take place. Some layoffs were too deep, others brought to surface shortfalls heretofore unrecognized.
Increased employee turnover is an added dynamic. National turnover rates in the U.S. continue to increase, nearly doubling (yes, you read that right, doubling) in the past four years. In other words, you’ve got to plan for new hires and replacement hires. And remember that about half of all that turnover occurs within the first 12 months of hire. Put that in your pipe and smoke it…
We’ve got to pay attention here, and plan for reality. Here are some simple suggestions:
No, really… plan for hiring well in advance of desperate need. Identify what you truly need, and project out for at least a couple of quarters (a year is better).
Be willing to hire when the right candidate is ready. Not when you’re ready, necessarily, but when the right candidate is ready.
Charge recruiters with keeping an eye out all the time. If they stumble upon someone available today who fits a Q3 need, see #2 above.
Be slower on staff reductions. Give market and company conditions some time to equalize. I know the short-term pressures can be big, but longer-term failures due to talent shortages are bigger.
Leadership matters. People will stay with effective, meaningful leadership. They’ll leave if it doesn’t exist. We know that now, so act accordingly. Employee referrals increase when leadership cares. We know that, too. Plus, engaging leaders drive discretionary effort; new hires and incumbents succeed more often with engaging leaders.
Talent matters—nothing new there. The right talent can be difficult to find even when you receive 400 
applications/resumes. Ask anyone responsible for recruiting today—they’ll tell you. Bodies are plentiful, specific talent… not so much.
Sort of like the Twilight Zone episode, Where is Everybody?
Know what’s coming, and get ready.
Be Brazen.
by D. Kevin Berchelmann | Aug 23, 2016 | Brazen Leader, Executive Improvement, Kevin Berchelmann, Organizational Effectiveness
This is an area where mediocre leaders just don’t get it.
And because of their egocentric defensiveness, they lose a ton of credibility.
Without writing a treatise here, suffice to say that there are three very simple things that a leader can do to set himself apart (positively) from the pack: (more…)
by D. Kevin Berchelmann | Aug 16, 2016 | Brazen Leader, Executive Improvement, Miscellaneous Business Topics, Organizational Effectiveness
As do many of you, I travel a bit.
During the last several months, as I travel around, I’ve been asking people I come in contact with two questions:
- Do you like your job?
- Why or why not?
Creates some interesting conversations, I’ll tell you. Almost missed a flight out of Baltimore when my conversation with the Hertz counter rep went into overtime.
I jotted down fairly copious notes for these discussions. And though I realize the lack of statistical “rigor” in my survey methodologies, I think the results were interesting nonetheless.
In about four months, I spoke with 56 people about this. Most readily answered my questions. Some, of course, seemed hesitant to respond candidly to such questions from an unknown traveler (go figure). Most, however, spilled their guts without a drop of hesitation.
16 people said “yes, I like my job.”
11 said “It’s OK,” or “It’s a job,” or something equally noncommittal and nonplussed.
26 replied “no,” or something equally negative. A few expletives were included in several.
(for you math whizzes, this doesn’t total 56; 3 would not answer the question at all)
The #1 reason given for “why?” with those 31 who said, “yes?”
They let me do my job.
Not “the money,” though most in this category did mention the pay was either “good” or that they felt paid “fairly.”
Not “it’s easy,” or “I don’t have to do much work.”
Nope, not those things we frequently imagine are in the minds of employees who seem satisfied, contended, or otherwise happy to work for us.
They let me do my job.
Never forget — the vast majority of successful leadership application is not some fancy buzzword, or the chapter title from some consultant’s new glossy book.
It’s the basics. It’s blocking and tackling.
So, what’s the take-away from this incredibly scientific, statistically strict employee survey?
- Hire right. Attitude, integrity, intellect and work ethic… none can be trained, all must be hired.
- Set and manage expectations. Keep it simple, folks.
- Empower people to do their jobs, and expect that they will.
- Rinse and repeat.
Don’t make this harder than it needs to be.
Be Brazen.
by D. Kevin Berchelmann | Aug 1, 2016 | Brazen Leader, Executive Improvement, Organizational Effectiveness
“Teamwork” has forever been a buzzword in our business world. It seems that the importance of having employees work as a team has been promoted in every available piece of management literature. Nevertheless, we at the top have routinely had a hard time “playing well together,” despite the fact that the need is more pronounced now more than ever.
I used to work for a CEO who believed that the definition of a “team” was a group of people doing things his way. It’d be funnier if it didn’t apply so well to so many…
Who cares?? Why does it matter, as long as I do my job and am good at it?? Some arguments for executive teamwork:
- External Demands. Worldwide competition and changing financial markets make it necessary for the organization to be on the alert at all times – the pressure to innovate, apart from the company’s organizational health, are no longer the CEO’s sole purview.
- Internal Demands. Diversifying businesses require differently-skilled managers leading varied business units. We can no longer be “all things to all people.”
- Succession. An executive team is usually – and naturally – the best selection pool for future executives, as individual members would have first-hand knowledge of the essential competencies of a potential top leader within our current organization.
- Exemplary Behavior. In addition, top executives working well together sends a potent signal down the line. Monkey see-Monkey do. ‘Nuff said. Your folks really do emulate your behavior…
So why, then, if we understand the need, do top executives often fail to form a team?
Consider the source: Managers who have climbed the ladder’s upper rungs are typically strong-willed, ambitious and are experts in their own right. These characteristics, though obviously allowing them to successfully rise in within an organization, may also pave the way for an unwillingness to show weakness, overprotective behavior for their functions, and viewing other executives as “competition” in their quest for the Holy Grail: The CEO’s chair.
Personality and behaviors can be difficult to change once they are really entrenched, so forming a true executive team becomes a difficult undertaking.
Ultimately, the CEO must establish a climate that is favorable to developing an executive team. S/He can do this by:
- Selecting discriminately. Normally, “upper management” can be a big group, consisting of the CEO, COO, CFO, various heads of important functional areas, and other political savvy or otherwise valuable individuals. Limiting the number of total members to 8-10 enables all to develop healthier relationships, to say nothing of the success of subsequent meetings. And no, not making someone part of this group does not mean they are unimportant.
- Communicating unequivocally. The CEO must ensure that all executive team members understand the vision, mission, strategies and goals of the organization in no uncertain terms. There can be no “highway” option here.
- Ensuring Commitment. If there is no involvement, there is no commitment.
- Clarifying Roles. The CEO must clearly set the mandate for each executive team member. This involves defining strategic responsibilities (not operational), areas of cooperation, interdependence, information-sharing and decision-making processes.
- Ensuring safety. Establishing an atmosphere where members can show their weaknesses, disagree and express their opinions openly without fear of losing face and authority can induce team creativity. It also promotes increased trust among the members.
- Emphasizing Shared Accountability. Rewarding solely individual performance undermines the formation of a cohesive executive team whose performance is supposed to be assessed collectively. Collective measures of profitability and other gains are crucial.
- Having Courage to weed out non-performers. It’s perfect, of course, if all executives would deliver on their responsibilities – but, nobody’s perfect. If an executive hinders the team’s progress or is disrupting the team’s process, then it might be time to let that member go. Make that decision as certain as it would be if s/he were functionally incompetent.
By the way, I was interviewed by the Houston Business Journal on this exact topic…
I worked with the CEO of a large services company. A VP member of his senior staff was a brilliant P&L manager — but entirely destructive to the team. We coached, cajoled, taught, pleaded and begged. This senior manager would not be swayed — he was clearly “on the dark side,” and wanted to stay. He wielded his P&L performance as a Kevlar vest.
The CEO fired him, and you could hear the air being sucked out of all the collective guts of the senior team. The boss was serious, and now the team was, too.
Creating a synergestic team of top leaders in an organization is tough work. Selecting, managing personalities and relationships, establishing and enforcing norms, and developing executive team members is a complex process – but it can be done.
The payback is huge. You know that, of course, if you took the time to read this whole posting. Stop looking for a magic bullet — it takes effort and commitment, and in all likelihood, some tough decisions.
Let me know if I can help.
Be Brazen.
by D. Kevin Berchelmann | May 28, 2016 | Brazen Leader, Kevin Berchelmann
Many people — mostly consultants, I know — make incentive-based compensation planning complex and overly difficult to create, implement, and manage. It simply does not need to be that way…
Understanding incentive compensation is simple, and is largely human nature. Just realize the following:
1. That which is rewarded is repeated,
2. You don’t get what you want, hope for, manage to, or request — you get what you pay for (as a tenet of compensation, not necessarily a life philosophy), and
3. Simplicity wins.
There are certainly exceptions to this, but they are just that… exceptions. Don’t be misled by one or two instances of simplicity, for example, not working. In the long run, across the board, these tenets hold true.
Well crafted incentive schemes will generally work best when — viewing from the employee’s angle — we can show that:
1. Working harder (bigger, better, stronger, faster) will improve my job performance,
2. My improved performance will create rewards, perhaps an increase in salary or valued benefits, and
3. I value these rewards.
(oft-paraphrased from Victor Vroom, though not sure his was original)
Keep it simple, keep the end in mind, and stay focused on what you are really trying to accomplish.
Yes, the leadership, not the schmucks that
This is Stumpy.