Tag Archives: Bob MacDonald

Wells Fargo Confirms that Big Banks are a “Basket of Deplorables”



In what The New York Times called, “The brazen scam no one noticed,” Wells Fargo Bank has admitted to scamming thousands of customers by surreptitiously opening an estimated two million bogus credit card, checking and savings accounts. Acknowledging this fraudulent activity, Wells Fargo has agreed to pay a fine of $185 million dollars.

Of course, from the CEO down, Wells Fargo management has denied any knowledge of this activity and have placed the blame on the lowest levels of employees; announcing that over 5,000 employees have been terminated for their involvement. (The New York Post is reporting that hundreds of current and former Wells Fargo employees have taken to social media asserting that the fraud was an “open secret known by all at the bank.” Many cited being penalized by management for not going along with the scam.)

The final story has yet to be told, but it strains the credibility of common sense to believe that a scam of this magnitude could go on for so long (5 years) and be so pervasive within the Wells culture without management at all levels being aware of it. (The New York Times reported that the senior executive who oversaw this group of “rogue employees” announced her retirement and walked away with a $124.6 million dollar severance package.) It might even say more about Wells Fargo management if they didn’t know about this fraudulent activity carried on for so long by so many people.  

If one is to believe that the Wells Fargo CEO and all his minions had no idea the scam was being perpetrated on thousands of customers it is proof-positive evidence of stupidity, incompetence and non-existent corporate governance. How can over 5,000 employees independently and systematically dupe thousands of customers for years, without some evidence of this activity coming to the attention of management? It means that management is either dumber than gold fish or they condoned it by turning a blind-eye to it in the name of personal bonuses and corporate profit.

Wells Fargo is not Alone

If the actions of Wells Fargo were an outlier of typical big bank stupidity, incompetence, dishonesty and greed it could be passed off, but unfortunately it is further validation of the fundamental flawed DNA of bankers. But it would not be fair to lump all bankers into this category; there are good bankers. Unfortunately, the actions of 99 percent of the bankers give a bad name to the others.

The Wells Fargo is just another example of a history of the banker’s attitude of deceit, greed and dishonesty when it comes to dealing with customers, but it goes further than that. A quick review of every national financial crisis in the past 200 years will show that the greedy and foolish acts of banks were the spark that set the crisis in motion.

Wild stock speculation by banks brought on The Great Depression of 1929. The very first act of Franklin Roosevelt when he became president was to close all the banks in the country. This led to Roosevelt’s famous quote, “The only thing we have to fear are bankers who run-a-muck.”  Soon after that the Glass-Steagall act limiting and controlling the size and activities of banks was passed. It is interesting to note that from the time Glass-Steagall was passed in in 1933, until it was repealed in 1999, not one single large bank failed and the country did not suffer a serious financial crisis.

The 1999 repeal of Glass-Steagall allowed the banks to consolidate into huge national institutions and put their capital at risk in insurance, investments and investment banking. Armed with this new-found freedom, it took less than a decade for the decisions of incompetent, greedy, deceitful bankers to become the catalyst for the greatest financial crisis since The Great Depression.

Learning the lesson again of just how greedy and stupid bankers can be if left to their own devices, in 2010 Congress passed the Dodd-Frank law. Although not perfect, the primary objective of Dodd-Frank is to rein in the size and laissez faire actions of banks. The intent is to prevent banks (and any other financial institution) from becoming “to big to fail;” so that the failure of any one bank would not take down the entire economy with it.

Even Bankers are Upset with Wells Fargo

Exposure of the deceptive practices at Wells Fargo comes at a particularly bad time for banks, because the banking industry is right in the middle of an expensive, lobbyist-led effort to repeal Dodd-Frank so they can once again revel in the unrestrained freedom they enjoyed after the repeal of Glass-Steagall. The big banks are upset with Wells Fargo, not for what they were doing, but because this incident draws attention to just how greedy, deceitful and stupid bankers are as a group. They are worried that the actions of Wells Fargo will make it even more difficult to repeal Dodd-Frank.

At the same time, even the smaller banks – ones that tend to be more connected with their communities and customers – are furious with Wells Fargo. They fear that the actions of Wells Fargo could result in even more regulations that significantly increase the cost of doing business.

We should not be surprised (and shame on us if we are) by the deceiving actions of Wells Fargo, but it should remind us that big banks are too incompetent, greedy, deceitful and stupid to be left on their own; especially when the size of their mistakes can damage the entire economy.

Just as Ulysses, the Greek king of Ithaca, had himself bound to the mast of his ship so he would not follow the seductive song of the sirens, bankers should be bound to only be bankers, lest they succumb to their own stupidity and the siren songs of greed, deceit and avarice; taking us down with them.

Do You Have What it Takes to be a Successful Business Maverick?



Business mavericks are abhorred and adored. The mentality of a maverick is to relentlessly seek to find better ways to do what is being done and to focus on what is not being done and ask “why.” Those who are comfortable with or indebted to the way things are, abhor the maverick as a troublesome irritation who constantly rocks the boat. Those who are frustrated by the status quo but feel powerless to bring about change, adore the successful maverick as a hero and a role model. One thing is clear, whether it is resisted or embraced, the successful maverick brings about change that ultimately benefits everyone.

For those who long to follow in the footsteps of successful mavericks, the question is: What does it take to be a successful maverick?    

Let there be no doubt that the business mavericks who bring about change are those who challenge the old rules governing how and what should be done and chart new, creative courses of action. Often, these trailblazers are running new, entrepreneurial businesses, but just as often they head some of the biggest names in business.

Think of Fred Smith, founder of FedEx, Steve Jobs, the guru of Apple, Inc., Bill Gates of Microsoft, or Richard Branson of the Virgin empire. Business mavericks like these are noted first and foremost for breaking the rules; for challenging the tradition which says, “You can’t do that.” They don’t accept that as an answer and always seek to find ways that it can be done.

But it is important to understand that one need not be an industry mogul to become a successful business maverick. Anyone at any level in any business of any size can challenge the way things are and seek to do better. It makes no difference if one is tasked to do a specific job, manage a department or lead a division, it is possible to exhibit the attributes of a maverick; and spur success.

If you want to join the fraternity of successful business mavericks, you’ve got to start by thinking like they do. And the first sign of maverick tendencies is relentless curiosity. The man or woman who “cheats” on the old, outmoded rules of business is constantly asking questions and challenging the way things are done. It means being willing to accept the resistance from those wedded to the status quo and take exception to established procedures and mores.

Mavericks often exhibit other attributes as well:

  1. The willingness to adopt new perspectives whenever possible.
  2. The openness to try new things and to do old things differently.
  3. The compelling drive to act on ideas to test their true value.
  4. The eagerness to listen to others and profit from their input, regardless of who gets credit.
  5. Respect for and support of others when they propose new courses of action.

Being a business maverick requires an openness and willingness to look at the world in new ways. Rule-breakers know that new ideas need nurturing and support. But they know that thinking about a new idea is not enough. The true value of a good idea resides in its implementation. As management expert Peter Drucker said, “Ideas are cheap and abundant. What is of value is the effective placement of these ideas into situations that develop into action.”

On the surface, becoming a business maverick doesn’t require any special skills. You don’t have to have an MBA from an Ivy League university. In fact, you don’t need a degree at all. But if it’s so easy to be a cheater, and the potential for reward is so great, why, then, doesn’t everybody do it?

The Will to be a Maverick Is Hammered Out of Us

We have to recognize that daring to think and do things differently exposes us to risks as well as rewards. But you know what? Even though you may risk the ridicule and tsk-tsk of your friends, business associates and your boss, and an endless string of others; even though there is a risk that you’ll come up with a dumb idea for which you’ll be chastised; even though some may perceive you as a show-off or know-it-all; even though all of this may be true, when you finally succeed by doing things differently, the reward and personal satisfaction is so much better than the punishment. It’s not even a contest.

The only reason the downside exposure exists is simply to control you: to intimidate you so that you’ll be unwilling to join the ranks of mavericks and creative thinkers. The result? Many potential mavericks are afraid to engage in behavior that could potentially make waves. Instead, they lay low and avoid the possibility of future embarrassment and pain. It is a shame that most who admire the maverick and seek to follow in their path become timid feeders in a sea of conformity.

But it does not have to be that way. Even if one is not a natural born maverick, the attitude can be an acquired talent; a talent well worth learning and practicing. To develop and nurture this talent for ourselves, we have to overcome the way our psyche has been bullied for so long in an effort to get us to stop asking questions. To achieve real success in our life and career, it is essential to recondition ourselves to challenge convention. Doing so allows us to join the ranks of those mavericks who bring about real change and become a role model for others.

Adopting “Best Practices” Is Not the Path to Innovative Leadership



The road to leadership and management success is not an easy one, and there are many who fail. Those seeking success will be confronted with potholes, perilously winding roads, dead-ends, and bridges to nowhere. That’s bad enough, but when these obstacles are encountered, there are those who promise that there will be clear sailing ahead and the objective achieved if only those seeking success follow and implement accepted actions.

For the most part, however, these are false promises. The problem is that they encourage those seeking success in management to do what others do. But innovative leadership is about doing what others have not thought to do, not simply following the herd.

One of the most insidious of these false promises is a concept that has gained widespread acceptance and promotion. It is the theory of adopting the “best practices” of others. Unfortunately, the idea of identifying and then implementing “best practices” is nothing more than a scheme invented by management consultants to serve as a type of perpetual annuity of fees paid by those seeking the yellow brick road to management leadership. The concept is simple: if you copy the “best practices” used by successful people or organizations, then you will become successful as well. But, it is fool’s gold.

The consultants do not want you to know this, but the core of the best practices hypothesis is, in reality “copy to create.” The conventional “wisdom” of best practices is that a manager can be more effective at delivering a specific outcome by following a standard way of doing things that have been established by other organizations. The idea is that by adopting the processes, systems, checks and structure of other organizations, the desired objective can be achieved with fewer problems. What has allowed this notion to become so accepted is the alluring, but false promise that success can come faster and with less effort simply by following, copying and repeating the procedures that have worked for other leaders and organizations.

Unfortunately, the only ones to benefit from the wishful thinking that adapting “best practices” as a leadership or organizational philosophy are the consultants. Selling the proposed benefits of “best practices” allows the consultants to charge outrageous fees for offering prefabricated templates to standardize leadership and business process systems.

There are a number of fallacies in the temptations to adopt best practices. The first of which is that all leaders and organizations are the same and that they face similar challenges and opportunities. Of course, this is simply and patently untrue. What distinguishes truly outstanding leaders is their individuality. And what distinguishes truly successful organizations is their unique culture.

While there are fundamental principles such as open communication, consistency, trustworthiness, respect for followers and high ethics that are common among successful leaders, a closer look at their application of leadership will show that there are distinct differences in the style of these leaders. The reality is that there are no “best practices” of real leadership that can be easily quantified and copied.

It is even more foolhardy to think that the processes and procedures – let alone the culture – of one organization are easily transferable to another. As with individuals, organizations develop their own unique style and culture. There is no doubt that a leader should seek out and instill best practices within an organization, but those best practices must be designed to leverage the culture and resources of the organization they lead, not those of a competitor. Companies come in all shapes, sizes and stages of development; each has its own culture.

That’s not to suggest you don’t study the style of leadership of others or understand what it is your competition is doing, but you ought to do that to do better than the competitor, not to become the same. Imitation may be the sincerest form of flattery, but blatantly copying the way others operate is a type of “me-too” attitude that simply doesn’t work.

Best Practices and Innovation

There is an even greater risk that comes with falling prey to the fascination of a best practices philosophy. Adopting a “best practices” style of leadership or the processes of other organizations legitimizes sameness and mediocrity; it stifles innovation and encourages bureaucracy.

If you fall prey to the belief that the best way to achieve your organizational objectives is to adopt the best practices of other leaders or organizations, there is no reason to attempt to discover a better or more innovative way to achieve success. Moreover, what might be best practice 10 or 20 years ago may not be best practice today. Just ask Blockbuster Video or Circuit City. If you think the path to achieving success as a business leader rests with process and procedure lifted from others, then you are following—not leading. In reality, “best practices” encourages you to attempt to be successful by doing what the competition does. This is wrong. The way to beat the competition is by being better than the competition, not by doing what they do.

Create Your Own “Best Practices”

If you want to be successful, develop your own style and your own best practices. Don’t be fooled by the false promise that the easy, simple path to success is to study what others do and copy them. Yes, study what others do, not to do what they do, but to do what they do better.

“Best practices” is a wonderful idea and a philosophy. However, they should be the best practices that you develop in your leadership style and the practices that best fit the strength and culture of your organization. The best practices you can adopt are ones that others want to copy. Then you will win the gold and they will be the fools.