Fraud charges and $185 million fine – this was the price of one wrong KPI for Wells Fargo. This notorious case probably induced many companies to double-check their motivation schemes and reach out to BI consulting practitioners. And it’s easy to understand these precautions. For many years, Wells Fargo was a role model for many banks that dreamed of repeating their success in cross-selling. Likewise, Wells Fargo’s failure motivated their followers to double-check their own strategies.
Wells Fargo defined a brilliant strategy. With a limited number of customers in the market, the best scenario was to sell more products to the existing customers. The company followed the principles of smart strategic management that instructed to translate a corporate strategy into KPIs, and defined a KPI on cross-selling with a target of 8 products sold per customer. Besides, Wells Fargo invented a catchy motto Eight is great. Only many years later, the company found out that they had chosen a wrong incentive that led to creating 2 million fake accounts.
While this article cites Wells Fargo’s example, the problem of poorly defined KPIs that are not connected with ultimate business goals can appear in any industry.
BI solution can help in defining right KPIs