Bad Leadership and Bad Followership – at Wells Fargo

Just this past week, about a year after Wells Fargo first got embroiled in scandal, the bank made a further announcement: there were some 70 percent additional potentially unauthorized accounts than it originally admitted. These accounts now number about 3.5 million.

Moreover, the bank’s recent review revealed another problem: unauthorized enrollments – that is, unauthorized by those being enrolled – in the bank’s online bill payment service. Wells finally confessed to finding more than a half million such cases, and to hauling in close to a million dollars in additional fees. A million ill-gotten gains here, a million ill-gotten gains there, well, it adds up.

As Gretchen Morgenson summarized the situation: “The mounting infractions at Wells Fargo are getting hard to track without a scorecard. Unrequested auto insurance that affected 800,000 people – check. Unauthorized changes to mortgage repayment terms in bankruptcy – check. Improper withholding of funds to some car loan customers – check.”*

When there is this much malfeasance, over such a sustained time, blaming those at the top does not suffice to assign guilt.  Or to explain what happened and how. There is, in other words, no way in hell to understand the scandal at Wells Fargo without a systemic analysis.

  • First, an analysis of the bank’s leadership group – that is, its entire management team including the board and senior executives.
  • Second, an analysis of the bank’s cadres of followers, including, for example, its lawyers and other enablers, along with its minions of mid-level employees, many if not most of whom no doubt knew they were doing wrong but did it anyway.**
  • Third, an analysis of the bank’s corporate culture, including its values; its premium on making money even if at the expense of its customers; its sanctioning of high pressure sales tactics; and its shameless abandonment of individual and institutional accountability.

The government is not done with this case. Democrats in the House and Senate have called for further hearings, though it’s not yet clear if the Republicans will go along.

The leadership industry, in any case, cannot afford to ignore this case. We, we leadership experts and educators, must show our clients and customers, and above all our students, how relatively easy it is to go to the dark side. And how, when bad things happen, not only are leaders responsible but followers as well.



**A handful of Wells Fargo employees did try to blow the whistle. But they obviously were in the tiny minority.

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