Did Wells Fargo Just Commit a PR Blunder?

It’s your fault, and mine, that Wells Fargo can’t say "thank you" to its tellers by taking them to Las Vegas for twelve days of revelry and relaxation because we’re so persnickety about how the bank’s corporate leaders spend money. That’s the gist of a full-page letter published in the New York Times this morning.

No, it’s not what the letter intended to say, but in today’s climate of anger, frustration and fear, it’s easy to imagine that’s how it will be read. As I read the letter I thought it is a very risky, cheeky message, one that could as easily backfire as not. I view it from a communications angle and wonder what, exactly, it hopes to accomplish.

I don’t know Mr. Stumpf, the CEO who signed the letter, and I’m not a customer of Wells Fargo (at least so far as anyone of us can know in the topsy turvy world of corporate buyouts.) I don’t even hold a grudge against any bank or financial institution. But this is a study in corporate communications that’s worth a look. Here’s why.

In the worst case scenario it could become yet one more example of the public relations fiascoes of an era of reckless greed and tone-deaf behavior by senior executives in banking and finance. It might start something like this: Wells Fargo President John G. Stumpf signed off on an audacious letter that lays blame on the media for the misperceptions that, in turn,  led Wells Fargo to cancel what he calls an employee recognition affair but what some critics called a Las Vegas junket at two of the city’s top hotels over 12 days. Mr. Stumpf’s letter says such recognition events are at the heart of the company’s culture.

Wells Fargo Letter The letter runs on the same day the front page of the New York Times features an article about people in Ft. Meyers, Florida losing their homes. It tells of an entire exurban neighborhood abandoned to weeds. It says crime is increasing and empty houses are being taken over by sellers of another kind of weed and turned into drug houses. It is accompanied by photos of people standing in line for free food.

All of this is the result of lax housing development regulations and freewheeling mortgage lending according to some interviewed in the article. Against this backdrop, Mr. Stumpf’s letter blames the media and by implication an oversensitive public for preventing him from honoring his mortgage broker teams that brought in 230 billion dollars of business. We readers should just hold our horses for a moment and consider how we are punishing Wells Fargo employees who are being denied the recognition they deserve, the letter says.

Because we’re so worked up about CEOs who’ve received taxpayer bailout money paying $1,300 for waste paper baskets, spending half a million on spa treatments and going on Caribbean golf outings while people are being evicted from their homes and waiting in line for a free loaf of bread, all Mr. Stumpf can do for his employees is put a feckless letter in the newspaper to say "thank you," and by the way, he wasn’t going to spend taxpayer money anyway.

Fair or not, that’s how the letter can be spun. That’s why it was a risk, in my opinion.

Mr. Stumpf, the anger, fear and sadness that I hear every day about lost pensions, lost homes and jobs is not merely palpable, it’s pervasive. Even if you have a case, you won’t be heard in this environment if you argue that you’re misunderstood because of media coverage and public misperception about this event. That horse is out of the barn. Your communications people failed you miserably. Whatever you intended, the letter sounds like whining and scapegoating.

Surely, if you want to thank your employees in a meaningful way, you can do so. No doubt you already ensure that each is paid a living wage with full health care coverage,  opportunities for training to upgrade their skills and profit-sharing based on achieving economies and implementing green practices. Perhaps you could agree that you will take no more than five times the salary of the lowest paid employee of Wells Fargo, that you will pay your own club membership fees, household help and forego all the other perks that sweeten the pot for CEOs.

The public reaction is not about recognizing your everyday employees. It’s about the symbolism of a junket by bankers to Las Vegas in the midst of what some are calling a depression. It’s hardly worth defending an event such as this against public misperception and media half-truths no matter how praiseworthy your intent. That case won’t "stick" today.

Whatever you do, you should tell your communications people to conduct a communications audit, an implications wheel, focus groups, attitudinal surveys, or use any number of other research tools that start with what your customers and the wider public think of your bank and the finance industry before you make another defensive and reactionary public comment. Then work backward to develop your messages and services. And then test those messages and see if they work.

And please, don’t blame us for your questionable calls. You’re already in a deep hole, and you just paid good money for a message that digs it even deeper.

A Postscript : In her own inimitable style Maureen Dowd commented on this issue today.

4 Responses to “Did Wells Fargo Just Commit a PR Blunder?”

  1. ms February 9, 2009 at 8:46 am #

    i think it is you who have misunderstood this – first of all – what is wrong with making money – isn’t that one of the reasons why people go to college or to school in the first place – so they can be responsible contributors to our society – this company was merely attempting to recognize its employees for their performance – that has been going on for a long time – spelling bees in school, Super Bowl, i could go on and on – but competition and success have been the way human beings have made a difference in many areas – both economic and social – when a company brings a trip like this into a city – it means jobs for waiters, waitresses, hotel staff, etc. what is wrong with this country – i agree that the top executives of the mortgage bailout companies shouldn’t be paid excessive bonuses – however this is a little different scenario –

    my husband works for a small business in the paper industry. the CEO of the company has put himself on the line and has taken some personal risks to turn the business around. i applaud the CEO and am so grateful that he was willing to step out and take a risk – as was my husband and other executives – but i don’t resent the money the CEO makes – he is worth it to every person in the company(especially those who work in the factories) and shareholders as well. aren’t businesses supposed to make profits – the current administration makes one think they resent companies that make profits – how crazy is that. profits in business enable many of us to put bread on the table – profits in business enable those who have made huge profits give back to their communities and many business executives do just that. profits in business create additional jobs – what is going on in this country? the government “produces” nothing – it might create some jobs – but it really contributes nothing to the gross national product –

    so whether or not this executive should have thought more about this letter – he was merely fighting back at the demagogues (the press) who would love to crucify conservatives and those of us who are out there fighting to make an honest dollar (which is increasingly difficult in this country). what are they contributing to the economy except gloom and doom philosophy.

  2. ma February 9, 2009 at 3:18 pm #

    BRAVO Larry!

    you said it, like all the rest are calling it.

    I know a couple of families that have lost their homes because they’ve lost jobs, their health care, their lives — that have tried to work with wells fargo.

    Who knows, maybe instead of spending funds for a ‘job well done’, they’ll help work with struggling home owners instead.

  3. Charlie Mackey February 9, 2009 at 4:20 pm #

    Larry,

    You have definately made me think. I am eternally grateful that we are all allowed to have our own opinions on different topics, and I am also happy to have the chance to express my own opinions right here along side yours.

    After reading your review I had alot of things that I want to say, however I felt that the previous comment made about your review summed up what I would have liked to say rather well. I would however like to add a few things.

    I have a very simple thought that i would like to put across to you, I am a 24 year old college graduate, however I have no financial background. I do however know how to research information.

    According to statements found at Google Finance, in the 4th quarter of 2008 alone, Wells Fargo loaned out more than three times the money they had received from the bailout. During all of 2008, more than 28 times what they were given was then passed on to the public in loans.

    If I can research this information with Roman Noodles and re-runs of The Crocidile Hunter as my fuel. What is stopping newspaper employees or big news stations from taking the time to report “accurate” and “unbias” information?

    The reason is because good news does not sell, good news does not bring ratings. If the media that we rely on so heavely to give us information would report “accurate” and “unbias” information we would have real news, but bad news and catastrophy bring more ratings than the good stuff, and if I watch their broadcast, then they can charge more for commercial time.

    All in all though, if Wells Fargo did what they were suposed to do with the money and then some, why should you or I care?

    I am a taxpayer, my money was taken to loan to strugling banks and buy shares in those companies. (I strongly dissagree with this no matter what the alternative outcome would have been)

    But we did not have an option as to where the money was spent or how much. So do we gain more control over this situation by yelling at the companies that received the help? Or are we just mad at the government and not able to do squat about it so we take our anger out on others? Think on some of that. I’ll follow up on this blog, maybe this is a discussion that we can continue.

    Thanks Larry,
    C.J.

    • Larry February 10, 2009 at 12:51 pm #

      Cj.J. I think you raise a good point. There is a strong emotional reaction against the excesses of some executives in some companies. Perhaps one part of my reaction is personal. It has to do with standing before a collection of staff and explaining why some of their jobs must go away because we don’t have the revenue to continue to sustain them. This is, as everyone who’s done it and I’ve heard speak about it, one of the most difficult tasks a CEO must do. So, without having this at the forefront of my thought it was certainly somewhere in there, perhaps looking to be expressed.

      Your point is well-taken.

      Larry

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