When good incentives go bad

Last week saw one of America's premiere financial institutions get hit with a fine related to their sales practices. Wells Fargo was fined $184MM (a paltry sum compared to their $23B in profits) for allowing employees to open and fund accounts in their customers' names without the customers' knowledge.

In the senior living world that's pretty tough to correlate but it begs the question: do your sales practices encourage good numbers or do they encourage alignment with your customer? More than 5,300 employees were fired in the Wells event but it went on a long time and he CEO may lose his job.  

I happen to bank with Wells and it hurts knowing they may have had my money above my relationship.  Presumably the fine and the impact of the practices are proportional. So was it work $184MM (in the context of $23B) to jeopardize a relationship? Of course not. Ironically, Warren Buffet is a huge shareholder of Wells and famously says it can take 20 years to make a reputation and 5 minutes to lose it.

As developers, when we model fill-up and sales velocity we have conversations about incentives, rent rebates, commissions, etc. I'm not sure we've paid enough attention to the precise alignment of that with the ultimate resident. Maybe that's hard. But it's not as hard a rebuilding a ruined image.