A value suspended can become a hurricane whose damaging force wreaks havoc for years.
Here’s how one company experienced that reality.
Their strategic objective:Aggressively increase revenue by cross selling existing products to current customers who do not know about those products.
Underlying logic:It is easier, more cost effective and profitable to sell products to existing customers than it is to pursue new customers. Cross selling to existing customers deepens relationships and increases customer life cycles. Trust is already established; the selling cycle is shorter.
Execution tactics:Mid-level personnel will become the sales force for the cross-selling initiative. They are already here, have some knowledge of the products to be offered and can get up to speed faster than new employees. Give them extremely ambitious sales goals and lean hard on them to achieve those goals – by any means necessary. Do not accept any excuses for failure.
Applicable Company Values:
- What’s right for customers.We place customers at the center of everything we do. We want to exceed customer expectations and build relationships that last a lifetime.
- Ethics.We’re committed to the highest standards of integrity, transparency, and principled performance. We do the right thing, in the right way, and hold ourselves accountable.
How to connect and weave those values into the execution of the strategy. Ignore them. They are an impediment.Revenue and earnings – increasing shareholder wealth are all that matters.
Welcome to Wells Fargo Bank.
Could they have adhered to their stated values, executed their strategic objective, achieved their goals and reaped the intended rewards? Of course. But more slowly. Their employee training investment to properly sell the products would have been greater. Perhaps they were blinded by the need for speed. If so, their experience taught all of us a graphic lesson about what happens when your strategies and your values are not aligned. The whole world can see that the long-term cost of doing it right is a small fraction of the horrendous financial and opportunity cost, and the cultural destruction that results from doing it wrong. Wells Fargo is still experiencing those costs and that destruction. Five thousand people fired – needlessly. $3 billion in hard-dollar costs – more to come. A government-imposed moratorium on growth until they get their house in order. The list goes on.
Wells Fargo was not the first. They won’t be the last. Their experience begs these questions. What would it take to live our values all the time? How will living our values impact the creation and execution of our strategies?Apparently history is not an effective teacher.
More on the alignment of values and strategy in upcoming blogs.
By Bill Leider, Managing Partner, Axíes Group