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Did Collins simply misinterpret how Wells Fargo reported their successes after 2001?

Initial Post

In his 2001 article, “Good to Great”, Jim Collins found 11 companies that went from good to great and metaphorically discussed how each of them did this. Of particular note was how Collins described the transformation of Wells Fargo.

Using the Hedgehog Concept, Collins argued that leaders are hedgehogs, not foxes. Foxes are good at many things. Hedgehogs are good at 1 big thing and are able to distill everything down to 1 simple workable idea. Accordingly, to be a great company, the CEO would have to ask: 1) what is the company best at; 2) what economic denominator drives the company; and, 3) what are the employees passionate about? Using this formula, Collins notably claims that Wells Fargo discovered that their economic driver was not profit per loan but profit per employee. Consequently, they pioneered electronic banking with the idea that they would “run a business like they owned it” and ended up turning that employee profit into superior results.

Although Collins does not empirically define these results, Wells Fargo’s profit summaries since 2001 reflect as much. In 2016, a former employee revealed that Wells Fargo had been involved in elaborate schemes to defraud customers by using their information to create phony accounts without their knowledge. Still trying to recover from the $1.2 billion housing settlement in February of 2016, this disclosure resulted in yet another $185 million in fines by the Securities and Exchange Commission (SEC). Consequently, the CEO resigned and the Department of Justice (DOJ) is now investigating the company. Wells Fargo shares have lost nearly 16% of their value.

For your discussion, you must first determine if Collins was incorrect to begin with. Did Collins simply misinterpret how Wells Fargo reported their successes after 2001? Or was it something internal at Wells Fargo that caused the Hedgehog Concept to go awry? If so, how could profit per employee go so wrong? Most importantly, where was the failure in leadership and why

 

Post a 400-word thread answering the Discussion Board question assigned from the readings. Threads require a minimum of 3 properly formatted citations

 

Peer Responses

Post a 250-word reply to 2 classmate’s threads. The reply requires a minimum of 1 properly formatted citation. Each reply must be completed by you, the individual student. Additionally, each thread and reply must reflect a solid Christian worldview through the use of at least 1 Holy Bible reference.

Responding to a classmate’s post requires both the addition of new ideas and analysis. A particular point made by the classmate must be addressed and built upon by your analysis in order to move the conversation forward. Thus, the response post is a rigorous assignment that requires you to build upon initial posts to develop deeper and more thorough discussion of the ideas introduced in the initial posts. As such, reply posts that merely affirm, restate, or unprofessionally quarrel with the previous post(s) and fail to make a valuable, substantive contribution to the discussion will receive appropriate point deductions.

 

Subject:  Masters Political Science

 

I have attached material you will need –  see attached file

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