Wells Fargo Lean Process Improvement Initiative

Heba Darghli Brandon Taylor Luis Thompson

Founded in 1852 • Famous for their Stagecoach! • Secure online payments in 1995 • Merged with Wachovia in 2009, creating the fourth largest bank in US History That’s the stagecoach!

WF Prides itself on diversity, community service, and exceptional customer service. • “We want to satisfy all our customers’ financial needs and help them succeed financially” Vision

Checking • Savings • Credit/Debit/ATM cards • Renters insurance • Retirement accounts • Teen accounts • Child/baby savings • ID theft • Much more Cross-selling products

Waste Problem

Informal Survey of Tellers • 22 individuals • Subject: estimated # poor solutions • Estimated number of dissatisfied customers • Findings • Estimated that 11% of solutions were of a poor nature. • 12 customer acct. closings Waste Quantified

Net charge-offs were $2.6 billion in quarter , 2011 (for loans and accounts) • 3rd quarter NI= 4.05 BB could have been higher • Charge-off expense is tucked into the 47BB Administrative and Operating Expense • Doesn’t appear like much in perspective to the other costs Financial Data

Process customer transactions • New services • Focus on sales and exceptional customer service • All employees must meet or exceed quotas, or face termination Retail Branches Tip: Avoid trips to the bank on the 1st and 3rd of each month.

Tellers: 280 “solutions”, or 93.3 accounts • Bankers: 2 accounts and 15 other “solutions” daily (total 1,680+ “solutions”). • Branch managers will face consequences if branch profit levels, or sales drop too much. • Daily check-ins/scolding from district manager • District manager scolded by market president • Market president scolded by regional president • Etcetera Quota System (quarterly) Unreasonable quota systems cause stress and depression

Lying • Manipulation • Abusing the elderly/mentally ill • Abusing language barriers • Opening accounts without customer knowing • Re-opening new accounts and closing others for various, made-up reasons Ethical Issues Leading to Waste

Numbers increase Unethical practices Quotas Inflated, unprofitable accounts Crushed Morale Wasted money Increased hiring costs Dissatisfied employees Fishbone Diagram

Sale quotas should be attainable • Adjust quotas with foot traffic • Look at profitability of “phony accounts” • Reduced turnover leads to less employee need • Operating lean by having experienced employees Going Lean

Tenent 1—Value lies within the service provided • Tenent 2—Gemba (opportunity) alter or remove quota system • Tenent 3—Muda(waste) lower# quality solutions= higher revenue/lower charge-offs Going Lean

Tenent 4—quota system=Push, Increase value to cust. = respond to mkt pull • Tenent 5—Perfection (Svc. not Mfg.) 5 S’s • Seiri—sort correct level for quota system • Seiton—ensure employees not over pressured • Seiso—ensure tellers are experienced and well trained • Seiketsu—implement standardized training • Shitsuke—keep employees happy and well trained to sustain level of service. Going Lean

Adjusted quotas based on traffic Reduce sale quotas Quality account policy Result: improved profits and reduced employee churn Account quality control via banker connection Mandatory funding of accounts New Process Flowchart

Happier employees, especially in non-converted Wachovia locations • Reduced turnover/training costs • Less waste • Higher profits • Better public image of banking industry Benefits of Change

Waste at Wells Fargo is abundant • Hindering Profits • Need to implement lean process improvement • Federal Lawsuit alleges “Daily Solution Reward System” promotes unethical and illegal activity. • Brandon Taylor no longer with WFB and has never been happier Conclusion / Updates

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Wells Fargo Lean Process Improvement Initiative