Archive for the ‘Sense of Purpose’ category

The Week in Ethics: Wells Fargo Culture Lessons 8 Months Later

May 21, 2017

After eight months of headlines, with likely more to come, Wells Fargo’s consumer fraud (affecting at the very least two million customers) echoes so many other corporate crises….what some of us did isn’t who we are. The drama playing out at the bank underscores the importance of companies regularly addressing how their values and actions align.

Wells Fargo certainly isn’t the first company in crisis where leaders have justified their efforts, defended their culture and blamed a few bad employees. Or been dropped from the list of most admired companies. Their approximately 235,000 employees and 70 million customers suggest they knew the check list of Leadership 101 as well as anyone, including: respect your customers, reinforce your code of conduct, make it safe for people to give you bad news, ask the right questions and expect answers.

And yet, it didn’t happen. Yet another company with a values statement that if followed would have avoided crisis. Touting values and ignoring them when making business decisions invites crisis.

In April 2017, Wells Fargo’s independent directors released the findings of an internal Sales Practices investigation report on the consumer fraud; it placed blame on specific leaders’ failings, organizational decentralization, sales integrity issues, and made a case for how the board was misled. The report identifies 10 corrective actions done or underway. While risk measures and having the ethics function report to the board twice a year is included, absent is the role of values in helping reshape culture.

The report pointed to culture chaos using a variety of descriptions: “culture of strong deference to management,” “sales culture,” “cowboy culture” and “insular culture” along with “company culture.”

Culture failures are hugely embarrassing. Changing leaders doesn’t ensure a culture regains health and purpose, especially if values have been passive, more marketing slogans than actually defining a culture. The report indicates that as early as 2002, there was evidence that sales goals couldn’t be met without “gaming” the system to the detriment of customers. The commercial bank unit had at least 14 years operating in conflict with the bank’s stated values which impact the spirit of the entire culture.

For years, Wells Fargo’s values statement has said: “We strive to be recognized by our stakeholders as setting the standard among the world’s great companies for integrity and principled performance. This is more than just doing the right thing. We also have to do it in the right way.”

This standard now needs to move from platitude to practical application. It needs to be looked at with humility and fresh eyes –no matter how long someone has been on the board or worked at the bank.

Questions the board and leaders should ask themselves and each other include:

  • What specifically (in behaviors and actions) do we want striving for integrity and principled performance to look like in 2017 and beyond throughout the bank?
  • What does respect for customers mean at every level and how will we demonstrate accountability in delivering it?
  • How do we expect leaders to show up in ways all leaders did not before?
  • How will we re-earn employee trust and inspire them to live (with us) the bank’s values?

There is distinction between aspiring to the highest operating standards and holding employees accountable to unattainable sales goals. The report indicated: “In many instances, Community Bank leadership recognized that their plans were unattainable….” Those goals were demoralizing and incentivized unethical behavior. While striving for the highest standards of integrity and principled performance can transform an organization.

In the words of Thoreau’s Walden “If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under them.”

The report likely won’t change the minds of opinion leaders angry at the harm caused to customers in their community. Short of extraordinary measures, the bank’s explanation of what it’s doing to right wrongs won’t generate quickly the trust Wells Fargo wants regained. That was evident last month at Wells Fargo’s annual Shareholders’ meeting by the “tepid” re-election of board members. The board chair’s defense “…the board took the appropriate actions with the information it had” falls short. However, a focus on the ethical implications of the report findings offer a direction to identify what integrity and principled performance will mean going forward.

Three additional lessons grow out of the Wells Fargo experience that address culture:

Wells Fargo’s report indicated direct reports and others recognized former CEO/chairman John Stumpf  disliked conflict and receiving bad news. This weakness impacts what is shared, held back and received by the board. CEOs often won’t see themselves as conflict or bad-news adverse, winning at any cost or not aligning business strategy with company values. Even when CEOs have the dual role of board chairman, (now separated at Wells Fargo) independent directors create success when they clarify leadership attributes expected, discuss areas of potential concern and ensure CEOs receive developmental support when falling short.

A board should monitor regularly, with HR facilitation, how company leadership shows up in feedback (surveys, town meetings and ethics hot line etc.) to enable a more complete picture. The Leadership Circle’s Leadership Culture Survey is one of the outside assessment tools available. It looks at the health and effectiveness of organizational leadership and measures the balance between creative and reactive leadership competencies.

Given the huge internal, reputation and financial costs of ethical failures, board members should consider recommendations in “The Ethics Officer as Agent of the Board” to leverage ethical governance capability. In addition to walking the talk themselves, they create focus when they reinforce organization accountability to live up to its stated values.

Gael O’Brien, May 21, 2017, The Week in Ethics

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust and reputation. She publishes The Week in Ethics and is a Kallman Executive Fellow, Hoffman Center for Business Ethics, Bentley University.

Additional Wells Fargo columns: Where Wells Fargo Goes From Here (December 2016) and Wells Fargo’s Next Move? 10 Suggestions (September 2016)

The Week in Ethics: Corporate Citizenship in a Trump Administration

January 26, 2017

trump_white-house-photo-2017-featureCircumstances have caused an increasing number of companies and CEOs to speak out in recent years on hot-button social issues that previously weren’t part of traditional corporate citizenship. For example, nearly 400 companies filed an amicus brief on marriage equity with the Supreme Court, and employers and organizations banded together using economic leverage to fight legislation discriminating on the basis of sexual-orientation in IndianaNorth Carolina and Georgia. CEOs also weighed in against policies that exacerbated racial tension, like flying the Confederate flag and excessive use of force by local police.

This experience will serve corporate leaders well in navigating the challenges ahead. Issues of gender, race, sexual-orientation, pay equity, gun control and climate change are among the many hot-button social issues not going away – and likely to become more divisive — under the administration  of U.S. President Donald J. Trump. Corporate citizenship may be entering its greatest test.

Will a Trump presidency have the effect of muting CEO voices for fear of reprisals and Twitter attacks in a government now controlled by one political party? Or will corporate citizenship, acting out of a bigger sense of purpose, gain increased public trust and support?

The new landscape offers unknowns, perils and opportunity even as the administration’s agenda isn’t finalized. As president, Trump wields enormous power and a low tolerance for criticism which makes dissent tactically sensitive. Companies have a full plate keeping up with economic policies impacting their business. However, the hot-button social and environmental issues will create defining moments for leadership and corporate citizenship.

Three of my observations from recent corporate citizenship challenges: 1) how a company defines its purpose fosters momentum; 2) using economic leverage isn’t corporate bullying; and 3) it’s critical to speak up collectively for what’s right.

How a company defines its purpose fosters momentum

When company leaders see the purpose of business as delivering value to society and the environment in tandem with delivering financial results, things change. They create stakeholders, shifting into a more authentic and aware relationship with employees, customers and all those impacted by the business. It makes “community” personal and shapes values and behaviors around what enables the community to flourish or be harmed. If everyone has a stake in its success as stakeholders then what everyone does matters more. If a law or action discriminates against anyone in the community, for example, it is a catalyst in seeking out like-minded leaders to join in addressing the problem.

Using economic leverage isn’t corporate bullying

Under pressure from many business leaders, Indiana, former Governor Michael Pence, now Vice President Pence, backed down on provisions in the Religious Freedom Restoration Act that invited sexual-orientation discrimination. If the provisions weren’t dropped, Salesforce.com CEO Marc Benioff was the first to threaten economic sanctions  (like reducing investment in the state and offering employees a relocation option). Economic leverage, used in other states to address discriminatory legislation was called “corporate bullying”  by critics. As discrimination is illegal, how is it bullying for companies not to want their employees put at risk?

It’s critical to speak up collectively for what’s right 

Corporate Citizenship is an individual and collective act. It involves working continuously to reinforce ethical behavior in one’s own company and working collectively with other CEOs and like-minded organizations to address social and environmental concerns important to you and your stakeholders. There is strength in numbers, especially in uncertain and volatile times. Commenting  on corporate social activismBank of America’s  Chairman and CEO Brian Moynihan  said, “Our jobs as CEOs now include driving what we think is right. It’s not exactly political activism, but it is action on issues beyond business.”

Climate change is just one example of the persistence needed for progress. Climate action to create a low-carbon economy and support the Paris Climate Agreement faces a challenge getting President Trump’s commitment as he has called global warming a hoax. The most recent Gallup Poll on the subject, found 64 percent of Americans surveyed expressed some to great concern over global warming.

It is unclear how, if at all, dissenting popular opinion will impact the Trump presidency and social and environmental issues. He lost the election’s popular vote by an unprecedented 2.9 million ballots. The day after the Inauguration over 600 peaceful marches  – 400 in the U.S. cities and more than 200 around the world –  put the president on notice regarding grassroots support for human rights issues. The president’s popularity (and how it impacts members of Congress) will be a bellwether of his ability to get his agenda through. Likewise, a company’s continued strong financial performance creates latitude to address controversial social issues.

Those companies whose business purpose is more than just profit are likely to avoid ethical problems longer if federal regulations and enforcement are relaxed. According to the 2017 Edelman Trust Barometer, 75 percent of respondents agree that “a company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” While 53 percent believe the current overall system has failed them, many continue to have faith in business as an institution. “Among those who are uncertain about whether the system is working for them,” the survey found, “it is business (58 percent) that they trust the most.”

Whether or not progress can be made on hot-button social issues in a Trump administration, acting out of a bigger sense of purpose and drawing strength from collective voices will likely gain increased public trust and support of corporate citizenship.

Photo via Whitehouse.gov.

Gael O’Brien, a Business Ethics Magazine columnist, is an executive coach and presenter focused on building leadership, trust, and reputation. She publishes The Week in Ethics.

Reprinted with permission: This column was originally published January 23, 2017 entitled “Corporate Citizenship in an Age of Uncertainty” in Business Ethics Magazine.

Gael O’Brien, January 26, 2017, The Week in Ethics

The Week in Ethics: How Owning Purpose Tames the Unexpected

December 30, 2016

Benjamin Franklin was brilliant, but in 1789 he forgot to include an essential element in his famous remark, “…in this world nothing can be said to be certain except death and taxes.” He should have said “nothing can be certain except death, taxes AND dealing with the unexpected.”  leadership definition photo from istock

We use religion and spirituality to deal with death. CPAs with taxes. However, what helps us deal with the unexpected – the obstacles, setbacks and disappointments that throw our professional (or personal) world into chaos? The unexpected can paralyze. It can ruin our best intentions and shut us down faster than a Nor’easter blizzard.

We should never allow the unexpected to get in the way of making real our best intentions. After some soul searching, here are three questions I use to guide me through the unexpected:

What do I stand for? What can I count on about myself? What can inspire me to move forward in spite of problems the unexpected is causing?

I first remember using these questions when the unexpected challenged my new business.

When I started my business, a timely introduction enabled me to get work from a new VP at a global company in Boston. I was a very small fish, living in Columbus Ohio. The new VP was facing his first management committee meeting where he would pitch the project I was helping him create. I developed the materials he needed and emailed them. However, on the morning he replied asking for some additional elements — that would require a lot more research — it was only two days before his meeting and I’d just returned from the doctor. My nagging cold had raged overnight into a severe case of bronchitis. If I went back to bed (so tempting) I wouldn’t make his deadline. I knew there wouldn’t be more work from him once he got acclimated into his new company’s resources. And the money, while needed, was not as vital then as going to sleep. So I rationalized, surely someone at his company could take over. But then, I turned to my three questions.

What do I stand for? (My response was helping leaders succeed.)

What strengths could I count on here? (When I was healthy, I cared about my work and I had the skills to do what he needed.)

I struggled with what could inspire me to do the work feeling so sick. I visualized him walking into his meeting unprepared but that didn’t move me. Then I visualized his having convincing materials, winning approval and using what I’d done to make a difference at his company. That inspired me. I cared about creating that outcome enough that I was willing to spend the next 8 hours at the PC. I sent back the plan. His project was approved. I felt a sense of exhilaration that my purpose was real. Knowing that distracted me from how sick I felt.

How do we deal with the unexpected? By being recharged by our purpose. So as 2017 is ready to launch, if you haven’t discovered your purpose yet, take time to think about what you stand for/believe in that creates meaning in your work and gives you great satisfaction. A sense of purpose creates its own inspiration, producing a lot of positive energy.

Leadership expert Simon Sinek, in his TED talk “How Great Leaders Inspire Action,”  says purpose is the WHY behind what we do. It is what inspires others to follow us.

Most companies have mission or purpose statements. However when leaders’ actions don’t inspire employees in how they demonstrate it, we can’t let that stop us from taking our own and the organization’s purpose seriously. Research indicates that having a deeper sense of purpose creates engagement and satisfaction with one’s job. Everyone deserves that and we control the ability to have it.

Starbucks’ mission, for example, is “to inspire & nurture the human spirit – one person, one cup, and one neighborhood at a time.”  A Starbucks I visit often has amazed me with how its employees show up. A barista called “hello Gael” after only my 3rd visit. Another barista, I didn’t remember waiting on me more than once, recited my drink order specifications when I reached the counter before I could order to see if she had it right. These simple acts created a sense of being part of a community there, something I’ve never experienced in any other Starbucks. No matter what unexpected problems might be going on in their personal or work lives, these baristas consistently make me (and others) feel valued, which is the essence of nurturing the human spirit.

When in our jobs or personal lives, the unexpected throws up roadblocks consider the power of your answers to these three questions.

What do you stand for? And what does your organization stand for?

What can you count on about yourself?

What can inspire you to move forward in spite of problems the unexpected is causing?

Then visualize the best that can happen when you own your purpose. Visualize the positive impact you can have on your team, company, customers or community.

And then feel the magnificent energy when you commit to making your purpose real.

The Week in Ethics

Gael O’Brien, December 3o, 2016

Gael O’Brien is an executive coach, presenter and leadership columnist. She publishes The Week in Ethics and is a columnist for Business Ethics Magazine where her December column  is Where Wells Fargo Goes from Here

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