As more bad news about Wells Fargo’s practices emerge, the stain transcends CEO Stumpf’s reputation. Warren Buffett opted to wait and comment knowing that he himself needs time to sort through his own internal review process.
It’s not just Stumpf who needs to believe that the “cancer “found in the retail bank was its source. The Gr8 prorgram setting very high bars for growth with 8 interconnected accounts per customer delivered results but discovery of the ill effects proceeded much slower. It took years and then the decision to remove the malignancy—firing of low level employees and managers—what made management believe this toxic behavior didn’t spread?
Well that’s naïve, if not ridiculous, isn’t it? Elizabeth Warren made clear that an organization must remain accountable to its customers more than its shareholders, no matter how large or successful it becomes. Somewhere along the line Wells Fargo, Samsung, Chipotle, VW, and GM all made similar high profile mistakes.
Speed to market may appear an appropriate competitive response but not if short-cutting quality results in shortchanging business value.
Bottom line the antenna in a business can’t be only tuned in for reward especially since it often means the business misses the risk signals. The obsession for rapid growth isn’t just blinding good judgment shows in ignorance of the environment and its complexity.
Interconnected digital networks absolutely create a speed advantage. But speed needs to be managed, and adjustments made to acknowledge the additional risk it creates. Ask the NASCAR drivers what precautions they take that are absent in other environments, or the Samsung engineers who knew they hadn’t done enough testing to properly advise the risk management team with information that prepared them for the inevitable fire.
Pull not push
The Internet made it easier than ever for consumers to find anything, anywhere, and at anytime. Businesses and sales people need to adjust and adapt to accommodate these more informed buyers. At the same time management goals or quotas must recognize changes in the environment, but looking more broadly at the inevitable interactions and the change in likelihood that they will occur.
It may be a cliché, but it isn’t true that what got you here will get you farther. What worked in the past works differently today and will work in another way in the future. The trick is to find the part that is essential and remains critical. Water does seep to the lowest level, but technology advances have created stronger more resilient and resistant containment mechanisms that alter the impact. Don’t wait to understand them until it’s too late.
Start by answering these questions to the satisfaction of your leadership team and board.
- How does your management team leveraging or limiting the new levers of change?
- How does social media, sensor networks, big data and cloud computing alter the behavior of your customers?
- What risks to your bottom line do they introduce?
- What steps have you taken to mitigate and or adjust your targets to assimilate them?