The Price of Profit

By Tracy MacDonald
Sep 2016

Profit is important, but it’s not the only indicator of a company’s health and well-being. All too often, profit is used as the primary source indicating success. We’re not saying numbers are not important- without them you don’t have a company. But for executives at Wells Fargo, the consequences of focusing on just the numbers seems to be bubbling up in a less than stellar way. For anyone in sales, this story may sound familiar. You’re working hard to fill your pipeline, get meetings, close deals and finally collect the all-mighty, highly coveted commission check.

Typically, it takes a variety of skills to get from cold call to close: patience, creativity, tenacity, and drive just to name a few. Most sales follow a predictive process from start to finish with a common and anticipated time frame. Others are so easy, one may expect hidden cameras to come out from behind a mirror. And then there are the ones that are so challenging and time consuming for such a small sale, that it’s questionable as to whether or not it will even be worth the commission in the end. Those are the ones you should walk away from.
But— management wants numbers. Sales translate into income which translates into profit. But, just like that sale which challenges every skill you have, at what cost is the profit?

Profit

Integrity? Honesty? Ethics? Those values, the ones your direct reports and customers trust in you, are not worth ignoring just for profit. While we don’t know the people personally involved at Wells Fargo, those who felt forced to open up false accounts in order to keep their jobs sacrificed these very qualities all in the name of profit. And to that we ask: what good is profit if it’s not coming from a place of strength and integrity?

The real question here is why. There were millions of dollars awarded to the bank in the form of fees from people who didn’t even know they had accounts set up without their knowledge. And before that, employees felt forced to open up accounts for friends and family just for the sake of opening them. With such a depth of questionable transactions, there seem to be more questions than answers. Was it Wells Fargo’s need to build profit? Recover from a loss after 2008? Attempt to reach markets they hadn’t been able to penetrate? Make up for a shortfall someplace else? Hope to build employee morale by showing really strong numbers on paper? Any of those are possibilities and it’s reasonable to speculate that if a company is doing well and is profitable there is a spillover effect to employees at all levels. Everyone feels food and everyone wins- until they don’t.

For argument’s sake, let’s say the goal of this whole plan for Wells Fargo was to boost employee morale by showing that the numbers were on the rise all around: accounts were increasing, card services were increasing, the Wells Fargo family was growing! Employees at all levels should feel great about that. If morale was the problem, and given the result of the plan and the pending federal investigation, then perhaps that issue should have been addressed differently.

This is where true leadership comes into play; digging beyond the problem on the surface to find the cause and ultimately the ability to develop a solution that is appropriate and will result in profits. While this process does run the risk of leaders finding out that they, or their direct reports, are not performing at optimum levels, don’t we owe it to ourselves to take an honest look at leadership capabilities and shortfalls? Of course we do because when companies have good leadership, and the right leadership, the rest will follow naturally, and flow into profits.
So if profits are not where you want them to be, rather than forcing sales, take the time to have an honest look at your company, the leadership structure, and your own leadership style. A few tweaks at the top could spread throughout and into many amazing successes.

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