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There are a few business axioms that people seldom see coming when looking forward, but almost always happen when wrong-doing has been exposed. According to reports this morning, UK banks have become these axioms in action.
The axioms:
- Every business that suffers from wrong doing must find a way to make up for the losses suffered from both the effects of wrong doing and the wrong doing itself.
- The brown stuff always flows downhill.
- When things go well, management takes credit. When things go awry, management blames someone or something else.
Here’s the deal. The rank and file, bottom of the totem pole, average underpaid entry-level and slightly above employees will pay for the sins of the management and executive staff above them. You had to see it coming: “We’ve got to be careful how we sell PPI now because everyone is watching. It doesn’t matter that regulators are watching us – any customer who reads the papers won’t buy it.”
Solution: Part A – Sell them our other products, whether they need them or not; Part B – Create new money making schemes that benefit the bank more than the customer; Part C – raise sales quotas and make the sales galley-slaves row harder; Part D – Whip those slaves even more.
I have seen it over and over through the years. It doesn’t matter what the business is. It is always the same page in the hymnal. Don’t beat them to death. Beat them enough to make the sales quota. “We need to increase revenue so that we can afford to give the Bob Cratchits of the company their Christmas turkeys and still afford to pay ourselves our outrageous £3 million pound Christmas bonuses.” Okay, I admit that I am exaggerating a wee bit. They’re not really all that interested in the turkeys – or the Bob Cratchits.
Consumer group “Which?” revealed that 66% of more than 500 bank employees interviewed confessed that they are being pressured to sell more; 40% said that the goals set for them drive them to sell items that are not beneficial to the customer; and nearly 50% said that they know at least one co-worker who has mis-sold products in order to meet their goals (and keep their jobs). “Which?” interviewed employees of Lloyds, Barclays and RBS.
This sort of practice – let’s call it ‘blowtorch management’ in memory of Sam Walton, who not only coined the phrase, but lived it – only breeds corruption. Customer satisfaction be damned, except when speaking publicly. Many businesses, especially banks at the moment, are being run by managers and executives who have exceeded their capacity for honest creativity. That leaves them with nothing but a blowtorch mentality that puts the peons under pressure to be much more creative than they are being paid to be. What happens in these circumstances is that some ‘slick Willy’ at street level devises his own sleight-of-hand sales technique that makes him look good enough to promote. Now, what kind of manager do you think he will be?
I can’t say that I am surprised at the report. In fact, I expected something like this to come, I just didn’t know when. Alison Loveday, Managing Partner at Berg, said that banks have not begun to change sales strategies and, as one might expect, those strategies have not been well through and have unclear metrics by which to measure performance. It’s going to take a lot more creativity and true customer concern to change the “sell at all costs” paradigm.
Don’t look for any major changes anytime soon.
