United Airlines, Wells Fargo, and Developing a Customer Experience Culture

In the course of the last week, two major stories demonstrated customer service failures. A United Airlines passenger in Chicago was injured while being dragged off of an airplane. Wells Fargo also released a report, comprehensively documenting its abusive sales practices and the measures it will be taking to address them. What these stories have in common is that each seems to have resulted from a failure of each company’s leadership to instill a customer experience culture.

Successful companies realize they must develop a corporate mindset and collective culture built around serving their customers. There are three main components to this: 1) delivering a quality product or service, 2) delivering it at a competitive price, and 3) creating a pleasant experience for consumers, who feel they have been valued and treated honestly. In creating this culture, there must be buy-in from all parts of the company or organization. The designation of a “customer service representative” must be cast aside, as every member of the company should be focused on creating the best possible experience for the customer.

United Airlines offered passengers on a recent flight eight hundred dollars to give up their seats and take the next flight to accommodate United employees. When none accepted, United selected four passengers they would force to leave. When one refused, they sent Chicago Airport Police aboard the flight to forcibly remove him.

United Airlines’ long-standing slogan is “fly the friendly skies.” Their website promotes the airline with value statements such as, “warm and welcoming is who we are,” “we fly together,” “celebrate our journey together,” and “we fly above and beyond.” These are good values for a company to espouse and aspire to. They are also obviously inconsistent with forcing paying passengers off an airplane for the convenience of their own employees. Those values are also at odds with brutalizing and bloodying a customer for the world to see.

Wells Fargo released a 113 page report, documenting its investigation into widespread issues with its sales practices. Wells Fargo had focused its efforts on cross-selling accounts to customers, with a goal of having eight accounts per customer. It created aggressive sales goals for its retail employees, who were placed under enormous pressure to meet them. As a result, Wells Fargo employees opened as many as 2 million unauthorized accounts. Wells Fargo has agreed to pay tens of millions of dollars to settle a lawsuit filed by the city and county of Los Angeles. It is also clawing back tens of millions of dollars paid to the executives deemed responsible. More about the details of what happened are available here:

https://corpgov.law.harvard.edu/2016/12/19/the-wells-fargo-cross-selling-scandal/

Wells Fargo’s Vision and Values Statement is available on its website. Its vision statement reads in part, “we must never lose sight of putting our customers first and helping them succeed financially.” That document also states, “[t]he reason we wake up in the morning is to help our customers succeed financially and to satisfy their financial needs, and the result is we make money. It is never the other way around.” It also discusses the need to be guided by its corporate values. Needless to say, the values espoused by Wells Fargo are at odds with the unethical sales practices that have subjected it to scrutiny.

Creating a Customer Experience Culture

1)        Aligning the company with its professed values. It seems clear that while both United Airlines and Wells Fargo paid lip service to valuing their customers, their behavior toward those customers was not consistent with those claimed values. It is not enough to simply claim to value customers. Creating a customer experience culture requires orienting an organization’s entire culture and decision-making process around a simple question: How will this impact our customers? 

           In much the same way that a company should align executive compensation with the goals of the corporation and its shareholders, it should do the same with its values and behavior. When a company goes to the trouble of developing a values statement, it seems self-evident that it should ensure it comports itself in a manner consistent with those values.

The company’s Board of Directors and executives should constantly be asking themselves:

·        what kind of company they want it to be

·        whether the company behaves in a way consistent with that mission or values

·        what can be done to align the company’s behavior with its mission or values

2)        Building a culture. This requires buy-in from all members of the organization. Everyone, from the CEO to the department manager to the frontline staff, has to be of one mind in delivering the best product or service and the most pleasant experience possible. To be truly successful and build customer loyalty, a company must deliver a quality product at a fair price. But it must also provide friendly and efficient service, which leaves the customer eager to recommend the business to others. From employee orientation to ongoing training and development, to the development and implementation of the company’s strategy, the focus must consistently be on creating a quality customer experience.

3)        Maintaining accountability. The company must create risk management methods designed to hold employees accountable to helping to create the best experience possible for customers. Even minor employee infractions that could affect the customer experience and how the customer views the company have to be dealt with quickly and aggressively. If a company is not proactive about putting out minor fires in that regard, they can spread quickly and poison the entire culture. The basic goal is to prevent moral hazard, in this context, situations where an employee has a financial incentive that could encourage behavior that benefits the employee and even the company, at the expense of the customer.

Wells Fargo employees were opening unauthorized accounts to keep their jobs and attain bonuses. United Airlines employees called airport police to remove a paid customer from their airplane to save the airline money and headaches associated with getting a crew where they needed them. In both situations, employees sacrificed the needs of the customers and the trust the public places in those companies for their personal or their company’s financial interests.

           Placing a trusted and respected individual in the role of a corporate ombudsperson is a good place to start. She should be empowered to be the corporate enforcer, tasked with making the company accountable to its own values statement(s). It should be understood that her role is not to generate revenue but trust.

           Corporate audit teams are also a good idea. A team of employees should be tasked with ensuring that the sales are being made honestly. A big part of this is making sure that the company’s desire for sales and profits does not lead it to incentivize employees to make sales or decisions at the expense of its customers. The company should make a strong commitment to reward the ombudsperson and the audit teams when they prevent and detect fraud or unethical behavior, even if it costs the company money.

           Systems should be put in place to assist the ombudsperson and audit team. These systems must be powerful enough that they prevent even the top executives in the company from placing their own interests before those of their customers. In the case of Wells Fargo, complaints about excessive sales goals, undue pressure to meet those sales goals, and the opening of unauthorized accounts made their way all the way to the CEO’s office. Despite that, those concerns were minimized and largely dismissed. It is hard to escape the conclusion that the same executives making tens of millions of dollars as a result of the bank’s unethical sales practices had a powerful incentive to look the other way. One way to structure the risk management system along those lines would be to have the ombudsperson and/or the audit team report directly to the Board of Directors. Another would be, in certain circumstances and when appropriate, to require those individuals or groups to report their concerns directly to a third-party, possibly state and federal regulators.

Creating a customer experience culture requires a true commitment from the entire organization. Strategic planning, daily decision-making, and every choice made in between have to include a conscious evaluation of how it will affect the customer. This goes well beyond delivering a quality product or service at a fair price. Companies must act in a way consistent with their values, treat customers in an ethical manner, and make clear that their focus is their customers.