A Tale of Two CEOs: Stumpf & Priebus

Wells Fargo  CEO John Stumpf has finally been shown the door but not before he did immense harm to the company that paid him well to protect its good name. What should-be been uppermost in his mind, the public’s perception of the Company he was entrusted was put on the back burner in favor of near term goals  enhancing the bottom line and his and others bonuses. Two million unauthorized  accounts without the customer’s knowledge revealed a management culture that lost sight of the big picture. What good was an extra statistic if you lost your good name or as Mark 8:36 admonished “For what does it profit a man to gain the whole world and forfeit his soul?” Wells Fargo paid big bucks for they thought was a visionary leader and ended up with a shortsighted bookkeeper. The board that hired him made a disastrous mistake, but in their defense lack of vision is usually seen in retrospect. Until a challenge is unmet, one can’t judge performance. Mr Stumpf probably did mundane chores exceedingly well but  he failed to see how his policies could jeopardize  the company’s brand for a few pennies on the bottom line. Two million accounts and no one questioned it? Didn’t Stumpf feel the need for controls that would’ve alerted management to this mass  hanky-panky?  It appears there were no avenues for whistle blowers to get a hearing. Any decent Business School would point out setting the proper priorities is essential to being a good leader. Perhaps he missed this at  Curtis L. Carlson School of Management at the Univ. of Minnesota. Stumpf’s  successor Timothy J. Sloan will have his hands full rebuilding  public trust  in Wells Fargo. What was easily lost by ignoring the most  important thing you possess, your reputation, must be painstakingly rebuilt with no assurance of ultimate success. At least Stumpf is gone and the process can begin.

Republican Party Chairman Reince Priebus,  in effect its CEO, appears to suffer from the same myopia that brought down Stunpf and Wells Fargo. He seems to think his only job is to promote Republican candidates no matter their profile. Is he unaware the  party’s most important asset is its public image? Above all don’t let it get mangled. Priebus never saw it that way. Anybody wanting to run for his party’s mantle was welcome. No questions asked. Whoever gets the most delegates gets Reince’s total support. By his logic and job perception, if David Duke ran and received the most votes in a populist wave, the Party must get all in behind him. Party’s reputation be damned.You might say this is extreme but how many people can you name besides Duke that could do more damage to the Party’s image than Donald Trump? It isn’t that Reince wasn’t knowledgeable about the party’s image . He oversaw the famous “autopsy” after the second straight  presidential election loss in 2012. It  recommended out reach to women, minorities and younger voters to improve Republican election prospects. When Trump  threatened to run for the Republican nomination in ’15, a simple google search would’ve shown enough info to signal Trump was the antithesis of the “Autopsy’s” conclusions. Actually, Trump has threatened to run for president for decades. It would be malpractice by both major parties if they failed to have lengthy files on this potential opposition candidate. Remember till recently Trump was a Democrat.

If for some reason, the Republican National committee didn’t know Trump’s resume (a huge dereliction of duty) when he announced they should’ve done their due diligence. Even a cursory investigation would’ve shown he was completely at odds with the “Autopsy” conclusions. Discrimination against blacks provoked Federal lawsuits against the Trumps. Even if it didn’t turn off that demographic, the “birther” attack against the first black President closed the door. Repeated unflattering references to a woman’s looks is only the start of his problems with women. Walls and disparagement of Latinos didn’t make any friends there. With the young, it seem he represents virtually everything they despise. Dig a little deeper and maybe listening to some choice Howard Stern broadcasts and it would’ve clear the image they wished to project in the future and Trump was totally incompatible. Would you let someone take the wheel and drive you in the  opposite directions of where you wanted to go?

But what could Priebus do?  Weren’t his hands tied? Nonsense! The Republican Party is a private entity with a national committee  making all its own rules.That means among other things barring anyone that it deems would jeopardize it.If David Duke wanted to run for the Republican Nomination, a way to ban him would be in place before you could blink. So why didn’t he act in the party’s interest? Fear of third-party run by Trump. Reince must’ve felt that a Trump third-party run would doom the eventual Republican Nominee. Why else would he demand everyone running for the nomination pledge to support the eventual nominee. This was  bizarre. When people looked into Trump’s ability to self fund a Presidential bid, the conclusion was he didn’t have the cash resources necessary. This was based on his own possibly inflated financial disclosure statement, not any real verifiable figures. Even then experts asked for his tax returns to get the real picture.  Remember Tim O’Brian was sued by Trump for writing Trump overstated his wealth and O’Brian won. In effect, Trump bluffed and Priebus  folded. Had he just done any basic research and shared it with the national committee, we think they would’ve backed him in showing Trump the door? Maybe pressure on the members or a wayward judge might’ve thwarted him, but the important thing is he didn’t even try. For Stumpf an account was an account even if was bogus, to Reince a Republican was a Republican even if he was bogus. Possibly Trump might’ve tried the third-party route but that would take money and organizational skills never in evidence in the Trump campaign. Even in the event he went third party, how many of his supporters would’ve stuck with him if it meant a Hillary Clinton win?

Worse Reince was given a second chance when so many damaging questions arose that could only be answered by Trump’s tax returns.  Charitable giving, possible Russian connections, actual wealth and whether he paid any taxes were among other things coming to the fore. Many people demanded that all the candidates disclose their taxes or forget about having your name put in nomination. This just made sense to protect the party from a devastating disclosure right before the election. Remember, Romney’s late disclosure contributed to his defeat. Even well before the convention most people realized Trump was never going to share his returns. Instead of taking the lifeline, he dug in favor of Trump. Who will stand for the  reputation and integrity of an entity if the CEO won’t? After all it’s their job. At some point Stumpf realized his errors and tried to do damage control. Unfortunately, he did it poorly.  Priebus to this day has never shown any awareness of the damage he has done to his own party. Wells Fargo will probably survive but we can’t say the same about the Republican Party.


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