Wells Fargo:History & Issue Analysis

Green Team:

Beth, John, Ken, Maureen and Sarah

History of Wells Fargo

Founded in San Francisco in 1852 by Henry Wells and William Fargo

Developed a reputation of trust in banking and express service

Used cutting-edge methods of transportation to grow their business

Maximized use of the new nationwide rail system and developed Ocean–to-

Ocean motto

History of Wells Fargo

Becomes stand alone banking entity in 1905

Survives 1906 earthquake and fire and rebuilding begins

Expands its reach in the 1920’s and 30’s

Creates innovative solutions for banking

Utilizes technology in the 21st Century

Primary Issue

Employees opened an estimated

2.5 million unauthorized accounts

Driven to hit sales goals

Need to develop strategies to

regain stakeholders’ trust

Situation

Investigation launched to determine

scope of scandal

Aggressive sales tactics blamed

Fines of $185 million incurred

Employees let go

New leadership named

Old Leadership

CEO John Stumpf pushed quantity over

quality

“Eight is Great”

Carrie Tolstedt failed to implement controls

Minimal monitoring of the sales program

New Leadership

Wells Fargo. CEO Timothy Sloan, Wells Fargo Leadership. Photograph. November 2017.

Rebuild culture on transparency

Refocus on customer satisfaction

Accountability

Clawbacks and bonuses

Eliminated product sales goals

Communication

Poorly established culture

Culture fostered by leadership

Forced communication to stakeholders

Wells Fargo. Commitment to Customers. Wells Fargo. PDF Image. November 2017.

Financial Sustainability

Goal to put scandal in the past

Look to financial growth, sustainability

and cost cutting measures

Decline in growth and profit due to

decline in reputation

Investors disappointed but not giving up on Wells Fargo

Focus actions to offset and reverse decline in income

SWOT

Strengths• Customer service

• Innovation

• Philanthropy

Weaknesses• Organizational structure

• Lack of communication

• Account scandal

Opportunities• New leadership

• Refocusing customer

service

• Marketing initiatives

Threats• Damaging media coverage

• Enhanced regulations

• Competitors

Recommendations

Develop a plan for reputational risk

Implement standard operating procedures

Design reporting structure for better decision making

Recognize all stakeholders

Questions?

Works Cited

Ackerman, Andrew, and Emily Glazer. “Wells Fargo CEO Sloan to Apologize, Explain Bank’s Accountability in Congressional Hearing.” Wall Street Journal, 02 October 2017.

Calagna, Keri, and Matthew Davy. “Managing Reputation Risk.” Deloitte, Wall Street Journal, 24 July 2017.

Forbes Contributors. “The Wells Fargo Account Scandal: A Timeline.” Forbes Media, 2017.

Glazer, Emily. “Wells Fargo to Pay $185 Million Fine Over Account Openings.” Wall Street Journal, 08 September 2016.

Glazer, Emily. “Wells Fargo’s Slams Former Bosses’ High-Pressure Sales Tactics.” Wall Street Journal, 10 April 2017.

Glazer, Emily. “Wells Fargo’s New Mission: Growth, Not Scandal.” Wall Street Journal, 08 June 2017.

Glazer, Emily. “Wells Fargo’s New Chairman Elizabeth Duke Knows Crises.” Wall Street Journal, 15 August 2017.

Glazer, Emily. “Wells Fargo’s Sales-Scandal Tally Grows to Around 3.5 Million Accounts.” Wall Street Journal, 31 August 2017.

Works Cited continued…

Glazer, Emily. “Wells Fargo’s Year of Scandal Stretches On.” Wall Street Journal, 08 September 2017.

Glazer, Emily. “5 Things to Watch in Wells Fargo’s Results.” Wall Street Journal, 12 October 2017.

Glazer, Emily. “Wells Fargo Posts Weaker Earnings After Sales-Practices Scandal.” Wall Street Journal, 13 October 2017.

Lublin, Joann S. “After Uber and Wells Fargo, Boards Wake Up to Company Culture.” Wall Street Journal, 05 October 2017.

Rexrode, Christina, and Emily Glazer. “Wells Fargo CEO Defends Bank Culture, Lays Blame With Bad Employees.” Walls Street Journal, 13 September 2016.

Sloan, Tim. “Thank You.” Wells Fargo, 05 April 2017.

“Wells Fargo History.” Wells Fargo Bank, 2017.

“Wells Fargo.” Wells Fargo Bank, 2017.