The story is all too familiar by now. In an effort to meet their targets, Wells Fargo employees created over two million fake bank and credit card accounts from which they charged various fees. While the fees were real, the fraudulent accounts were never authorized by the owners.
Companies set targets without being mindful of how those targets might elicit unintended unethical behaviors – behaviors that are inconsistent with their core values. In bold letters under the heading, “Vision and Values”, Wells Fargo CEO, John Stumpf, states on the company website, “Everything we do is built on trust. It doesn’t happen with one transaction, in one day on the job or in one quarter. It’s earned relationship by relationship.” Well, it seems like Wells Fargo disregarded its relationship with millions of its customers.
Regulators are blaming the bank for not having tighter controls and oversight on employees’ behavior. But I seriously question if loose controls were the culprit. It seems like what was lacking was values-based leadership at the helm of this Wall Street behemoth. Research by myself and others demonstrates that the best leaders are those who not only emphasize meeting goals but also emphasize how those goals are met; for a values-based leader, a goal is only important to the extent that the company’s values are upheld in the process. Yes, setting goals is important for keeping employees motivated. But if those goals are achieved at the expense of the company’s values, then the achievement is more than shallow – it’s a major blemish to the company’s public image and trust.
Values-based leadership means that values are not just words but are translated into actions – actions including how targets are set and monitored. Targets are meant to be won or achieved. But in this situation, everyone involved – employees, the company, the customers, the banking industry – is a loser.
Jennifer Jordan is Professor of Leadership and Organizational Behavior at IMD. She teaches on the Orchestrating Winning Performance and Building on Talent programs.
Anne, a newly appointed CFO at a global manufacturing group, transitions from consultant to leader, embracing delegation, strategic thinking, and career growth.
Leaders are always trying to figure out how to get more social power at work. So, how do you develop your social power with the groups and teams around you?
From absorbing stress to finding your authentic voice, leaders of global companies share the wisdom that has helped them excel in their roles.
Ethics professor Peter G. Kirchschläger sets out a roadmap for the regulation of AI technology that will satisfy the concerns of governments, businesses, and consumers alike.
Effectively integrating ethics, values, and diversity is vital for responsible leadership. Here is a guide to decision-making in the ‘gray zone’.
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications