Case Study: the crisis born of the false accounts of the Wells Fargo Bank
People were angry at the bank. In a crisis, anger is a powerful mobilizing force against a brand.
The American bank Wells Fargo had created millions of fictitious accounts without the authorization of its clients, and had thus violated the basic rights of consumers. The reaction of customers and the public was visceral, because what the bank had done was both easy to understand and very personal, unlike the scandals that led to the financial crisis of 2008.
If the bank had done that, who knows what else it could have done? It was nothing less than reassuring.
In this crisis, Wells Fargo had its work cut out to restore its reputation.
How should it go about restoring its reputation?
It will take time and energy, and there will be no room for error.
We can’t put a stop to it for as long as the investigation and the ensuing lawsuit will most likely take years.
Even once the brackets are closed, the slightest misstep, the slightest error of the same order, could wipe out all efforts.
What does the bank need to do to manage the crisis well?
Of course, to begin with, it will have to close all accounts opened without authorization and reimburse all related fees charged to their customers. The system of sales targets that caused these discrepancies and the resulting corporate culture must be stopped. Wells Fargo must launch an internal investigation to ensure that no further such practices are taking place.
If the investigations reveal any violations, managers and those with knowledge of the practices should be fired. To protect the organization, a fuse is needed. There should be no exceptions to this rule, regardless of the hierarchical level of the culprits. This applies even to the new CEO. Transparency doesn’t stand for anything like that.
Was it a good idea to recruit a man from the seraglio as the new CEO? Yes and no. It has as many advantages as disadvantages. Whoever the person is, the questions are the same:
What is his or her background? What vision does he or she propose for the future of the company? Is he or she willing to do whatever it takes to restore Wells Fargo’s reputation? The answers to these questions should be, respectively: Task-free. No more lies. Absolutely.