Does your company’s culture encourage or discourage email leaks?

April 18, 2017
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Seldom does a week pass without a news story of a hacked, leaked, or subpoenaed email. Emails originally intended to remain private, much to the consternation of the sender, are routinely disinterred, sometimes years after they were originally sent.    J. P. Morgan’s $265 million dollar fine for illegal hiring practices and the forced resignations of both Debbie Wasserman Schultz as the Chairwoman of the Democratic National Committee and Michael Flynn as National Security Advisor, were all triggered by leaked emails.

 

The greater the importance of an email’s subject, the greater its chances of being leaked. People harbor the delusion that because they have written an email on a private system, they own or control the email. Once sent though, the recipient, not the author of the email, controls its further transmission. Power over the disposition of their words has been ceded to others. Information is power, and never has that been more true than when information can be forwarded outside an organization with a keystroke. The power of leaking internal information is on full display with the unfolding scandal of Wells Fargo Bank .

 

Let me tell you a story…

At one time, Wells Fargo was the largest bank in the world by stock market value and in 2016 was the third largest bank in the U.S. as measured by assets. It was also the most profitable large bank in the nation with a return on equity twice that of Bank of America. Wells Fargo made the most home loans in the country, as their focus is in traditional retail lending. 

 

One of the factors powering their high rate of return was that its customers have an average of 6.3 fee-generating accounts or bank products per customer versus the industry average of 3 per customer. Regarding multiple accounts, then CEO John Stumpf said, “That’s how we’ve grown so much.” In the 2010 annual report, Stumpf wrote he was often asked why Wells Fargo employees had a cross-selling goal of 8 accounts or products per customer. He stated, “The answer is, it rhymed with great. Perhaps our next cheer should be: ‘Let’s go again, for ten!’”

 

Cross-selling, which is persuading existing customers to open more accounts, occurred at the bank’s 6,000+ branches, which it calls stores. Rasheeda Kamar, a former Wells Fargo manager, said her store in New Milford, N.J. was given a quota of selling 15 new products or services per day. If the store’s daily quota wasn’t met, the balance was added to the next day’s quota. Ms. Kamar said low performing employees were threatened with termination or publicly criticized on conference calls. In February 2011, she wrote an email to CEO Stumpf that read, “For the most part, funds are moved to new accounts to ‘show’ growth when in actuality there is no net gain to the company’s deposit base.” Stumpf did not reply to her email which was subsequently leaked.

 

The experience in New Jersey was not anomalous. After an internal investigation, 230 employees in Los Angeles were fired in 2012 for “very aggressive” sales practices. Leaked Wells Fargo documents from this investigation provided evidence supporting a 2013 story in the Los Angeles Times. The Times cited their sources as “a 10-page report tracking sales of overdraft protection; a spreadsheet of daily performance by personal bankers in 21 sales categories; and widely distributed emails urging laggard branches to boost sales.” All were provided by Wells Fargo employees.

 

Similar cases occurred throughout the nation as 5,300 Wells Fargo employees were fired over the course of the last 5 years for using aggressive sales tactics. Some of these tactics included opening unauthorized credit cards, for which one customer was assessed $1,300 in late fees, and making unauthorized purchases of life insurance policies, which were debited from customers’ accounts at up to $100 per month.

 

Ken Zimmerman, former Wells Fargo head of deposit products, wrote an email in 2012 to several Wells Fargo retail-bank executives that was subsequently leaked to the Wall Street Journal. The email warned against customers getting multiple checking accounts on the same day. Zimmerman took a leave of absence from the bank in early 2016 and left the company in July the same year.

 

At a Wells Fargo sales meeting in 2014, a regional executive gave lower level managers what seems like ludicrous guidance – never open accounts for people who do not exist. From a leaked email written in all caps and punctuated with exclamation marks, one manager at that meeting urged her subordinates to ignore their superior and get sales at any cost.

 

Opening accounts for people who didn’t exist and without customer authorization was relatively easy, but how was it possible to keep these fake accounts covered-up for so long? Managers and employees at Well Fargo’s 6,000+ stores were given a 24-72 hour warning before an inspection by Wells Fargo’s internal auditors. Industry standard is no warning. This gave employees time to conceal fake and unauthorized accounts. Prior to inspections, managers would often have employees stay late, sometimes all night, to shred documents, forge signatures, or cut and paste a signature the store had on file for a customer.

 

A combination of customers’ complaints and leaked emails led to investigations into the practices to meet sales goals and make quarterly bonuses. CEO Stumpf was called to testify before the Senate on September 20, 2016 concerning Wells Fargo’s sales practices. When asked to identify the independent consultant who calculated that 5,300 employees had been fired, Stumpf replied that he was “contractually barred” from answering. The fact that it was PricewaterhouseCooper had been leaked to, and published by, the Wall Street Journal four days earlier.

 

Wells Fargo subsequently paid over $300 million in fines and customer settlements in September 2016 for employees opening over two million accounts using fictitious or unauthorized customer information. The U.S. Labor Secretary has pledged to conduct a “top-to-bottom” review of cases, complaints, and allegations going back to 2010.

 

After paying the fine, CEO Stumpf said, “There was no incentive to do bad things.” Regarding employees he said, “If they’re not going to do the thing we ask them to do, put customers first, honor our vision and values, I don’t want them here. I really don’t.”  Wells Fargo CFO John Shrewsberry said, “The people we’re talking about here weren’t high performers. It was people trying to meet minimum goals to hang onto their jobs.”

 

However, William Dudley, the President of the Federal Reserve Bank of New York, noted that compensation drove the culture at Wells Fargo when he said in March 2017, “There was a serious mismatch between the values Wells Fargo espoused and the incentives that Wells Fargo employed.”

 

Stumpf abruptly resigned as CEO three weeks after testifying. He was replaced by Timothy Sloan. In an attempt to address the environment that fostered such rampant violations, new CEO Sloan said the bank will be working with academic “culture experts” to survey all 269,000 of its employees starting in May 2017. “Our goal is to uncover our culture’s positive attributes and its potential weaknesses, so our leaders can understand how best to foster an ethical, inclusive, and customer-focused culture.”

 

The promise to be heard

The root word for culture is cult, a small group of people dedicated to a specific belief or practice. If something is wrong with the corporate culture, then something is wrong with the beliefs, goals, and metrics guiding the way the corporation is being managed. Management, if willing to listen, can provide employees with an opportunity to be heard, to have questions answered, to possibly effect change, or at least to hear the rationale for maintaining the status quo. The choice for management has become honestly engaging with employees in a corporate environment that affords privacy or addressing a corporation’s most sensitive and possibly illegal issues on the public forum of social media.

 

The promise of social media is the promise to be heard. An organization’s proprietary, internal information is constrained only by an understanding that employees will keep organizational matters within the organization. An implicit component of that compact is that grievances will be redressed in a fair and timely manner and not ignored or repressed. The larger the organization, the larger the outside audience for internal information. If an organization does not listen to its employees, customers, suppliers, and other stakeholders, someone outside the organization will.

 

Kent Robinson is the author of “UnSend: Email, text, and social media disasters…and how to avoid them.”
Does your company’s culture encourage or discourage email leaks?
Source: HR.com Articles

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