In September of this year, news broke that Wells Fargo was fined $185 million for “widespread illegal” practices, including opening accounts without customers’ knowledge. In the weeks since then, details have emerged about a “pressure-cooker sales culture” in which employees say they felt they had to cheat the system in order to achieve quotas and keep their jobs.
Some argue that Wells Fargo is not alone in this type of behavior. How can scandals of this nature be prevented? What should financial services organizations do to ensure that ethical standards are followed by their employees at all levels? One key answer is to examine training practices.
The Importance of Culture
“More important than any class is our culture,” says Kathie Rotz, CPTM, director of learning at Honkamp Kreuger. A major reason employees behave unethically is because they don’t value company ethics. It’s important to build a culture that fosters a different attitude.
One way to create this culture is to change perceptions of selling, especially among banking professionals, who often don’t view themselves as salespeople, according to Mike Esterday, CEO of sales training company Integrity Solutions. Often, employees have a negative view of what selling is because of pop culture or their own experiences. (“The financial industry is a little like the dentist,” says Shanelle Grisso, director of training for United Capital Financial Advisers. “No one likes us and every one is a little skeptical.”) By creating a culture that values selling as a client-oriented service rather than pushing products, it’s easier to inspire ethical behaviors.
Sales trainers can help employees develop this new perception by helping them change their mindset. Esterday says that ethical salespeople have a customer needs-focused mindset rather than a transactional or product-focused outlook. By teaching salespeople to ask questions that uncover their prospects’ real needs, trainers can help them establish a rapport that builds trust and subsequently avoid taking advantage of customers.
Developing Ethical Selling Skills
There are many ways financial services organizations are training their sales professionals in ethical behaviors. Wells Fargo has said that it is enhancing training on ethics and how to report ethical problems and moving to performance metrics for employee evaluation. Meanwhile, Citigroup recently introduced an internal video series in which executives talk about how they’ve made business decisions “in grey areas of ethics,” according to Fortune. Bank of America uses a risk “boot camp” to refresh managers’ knowledge on regulations and provide opportunities to practice various scenarios.
“We have found that the best way to deliver ethical training is to deliver the content in multiple different approaches (live, self-study, audio, visual, departmental) and often,” says Rotz. “The more we keep the important topics in front of us the more we will become better at it!” At Honkamp Krueger, they have daily department huddles, which include reminders of customer service standards such as confidentiality, and quarterly customer service training on each standard.
For Grisso, creating an ethical culture “starts with the front line” and is “interwoven…in the daily life of the employees.” From 60-second videos on having honest, ethical conversations to real-life scenarios that demonstrate how to help clients make decisions, training “reflects a more organic and simple way to interact with people. It’s more human.”
Courage and Emotional Intelligence
Courage is an important trait for ethical behavior, especially in sales. In fact, research shows that after leadership and the executive office, sales is viewed as the function in which it is most important for employees to develop courage. To help sales professionals develop courage, this research suggests, it’s important to reinforce four behaviors, or “acts of courage”:
- Taking responsibility for sales outcomes
- Considering creative alternatives to fulfill customer needs
- Exploring new business and relationships
- Applying new skills
Along these lines, a recent Harvard Business Review article stated that emotional intelligence “allows you to build trust with your clients – and this is the most challenging and underappreciated part of any job in the professional services industry.” Emotional intelligence is developed by learning to listen, face challenges calmly and resiliently, value and support coworkers, and empathize with clients. Integrity Solutions also includes emotional intelligence and social skills as two important components of sales training, particularly in banking.
Developing Ethical Sales Leaders
One way to help bank leaders develop ethical behaviors is to cross-train them to develop a broader experience and range of skills. This cross-training will enable them to understand alternative solutions and approach situations from a variety of perspectives, developing critical thinking skills and the ability to identify and make the ethical choice.
It’s also critical to teach managers how to respond to whistleblowers. Executives can encourage employees to report ethical violations and concerns, but it won’t make a difference if their managers don’t know how to respond properly. Teach leaders to alter their mental images of whistleblowers and misconduct, identify which reported information is important, and detect behavior patterns.
Selling has a bad reputation, particularly in the financial services industry, and recent scandals have not helped. By reframing sales as a process in which professionals meet clients’ needs – and helping those professionals develop ethical selling and leadership skills – we can create a more positive, successful and just system.
In other words, help salespeople realize they’re doing something “worthy and noble,” as Mike Esterday says, and the sales will follow.
