PayPal President’s Ream-the-Team Email: Good or Bad Leadership?

As you may have heard, PayPal president David Marcus recently zipped off a zinger of an email to company employees which was leaked to Business Insider and featured in this story:  PayPal Chief Reams Employees — Use our App or Quit.

Some highlights:

PayPal It, our program enabling you to refer businesses that don’t accept PayPal has seen the least amount of leads in *absolute* and relative terms vis-a-vis ALL other locations. Offices with under 100 employees beat us by an order of magnitude (total PayPal it leads to date: 126,862, San Jose leads: 984…).

Product usage data is similar. Employees in other offices hack into Coke machines to make them accept PayPal because they feel passionately about using PayPal everywhere. I don’t see these behaviors here in San Jose. As a matter of fact, it’s been brought to my attention that when testing paying with mobile at Cafe 17 last week, some of you refused to install the PayPal app (!!?!?!!), and others didn’t even remember their PayPal password. That’s unacceptable to me, and the rest of my team, everyone at PayPal should use our products where available. That’s the only way we can make them better, and better.

[…]

In closing, if you are one of the folks who refused to install the PayPal app or if you can’t remember your PayPal password, do yourself a favor, go find something that will connect with your heart and mind elsewhere. A life devoid of purpose, and passion in what you do everyday is a waste of the precious time you have on this earth to make it better.

While I think it’s easy to agree that companies should “eat their own dog food,” it’s harder to decide whether this email constitutes good or bad leadership.

Here are some things to ponder in answering that question.

  • In this day and age, there is a 100% chance that this email will leak.  I argue that every all-hands CEO email must now be written as if it is going to be leaked.  While perhaps a surprise 5-10 years ago, these leaks are simply a realty today.  The CEO should know that.
  • While we all want our employees to use our products, should they not do so because they are good products and they want to use them as opposed to being forced to at gunpoint?
  • By the way, using only the company’s products (and not our competitors) creates an insulation from the market such that the company may lose tough with realty.  (Think:  Detroit auto-makers giving execs new company cars every year.  They never had to deal with the vehicles poor aging/maintenance and never drove the competition for comparison.)  The PayPal cafeteria should accept Square and Google Wallet on these grounds.
  • Would a better approach have been to “seek first to understand” and learn why employees weren’t using their accounts?  (Ditto for the iPhone app.)  After all, you can force your employees to use PayPal but you can’t force the other 99.999% of the market.  Why not use  your employees — who should be naturally predisposed — as a test lab.
  • Could he not have provided an incentive (say a 10% discount) at the cafeteria if you use PayPal.  Then it would be really interesting to see why people weren’t using it.
  • Does anyone honestly believe that if everyone uses the products they will get better?  It’s a quaint idea, but if one of the junior marketing events people has some product feedback, does PayPal really run the kind of organization where it’s going to be listened to?  If he’s going to say “everyone should use the products so everyone can make them better,” then he better put wood behind the product-input arrow (e.g., an internal “ideas community” — today PayPal seems to lack even an external one).
  • Does this email actually motivate anyone or just make the CEO look frustrated and desperate?
  • To the extent San Jose employees are unexcited about the company and its products, will this email do anything to improve that?
  • Finally, should telling people to quit if they don’t use the products accomplish anything?  In complacent companies it’s the non-complacent who quit.  The complacent generally need to be fired.  So why yell at everyone about complacency — it irritates the non-complacent and has zero effect on the complacent (“oh, David’s yelling again; wonder when he’ll stop.”)

That’s my take.  Overall, this email was a terrible idea.  What’s yours?

9 responses to “PayPal President’s Ream-the-Team Email: Good or Bad Leadership?

  1. He should have followed the Socratic method of leadership. Asked using some kind of Chatter or Yammer like tool or a simple survey/newsgroup – What would get you to use Paypal everyday? What are the top 3 ideas? What are the worst features?

    He identified a problem – just the wrong lens on how to evaluate and solve it. The root of the problem is Paypal on phones doesn’t seem to have any appeal for most users. Fix that!

    So I agree with you.

  2. Right. Mixing dog food with kool-aid is a bad idea.

  3. Great questions DK.

    David Marcus is no dummy. Otherwise, he would not be in his current position.

    PayPal is under serious threat: Traditional competitors are becoming more consumer (and tech) savvy and there are new market entrants like Square and Stripe. My guess is that this is an attempt to stir things up, shake off the complacency, and rally the true believers who will be critical for the battles current and future.

    • The logic that says you don’t get the job if you’re not qualified is generally true but has many exceptions … Bartz/Yahoo, Apotheker/HP, … Bado/MarkLogic … so I’ll accept as general rule but not automatic validation.

  4. Pingback: PayPal President’s Ream-the-Team Email: Good or Bad Leadership? | Raj Nadar

  5. Its a great email. Of course he knew it would be leaked and he didn’t say use Paypal exclusively, he said know your password and install the app — which is not the same as the Detroit executives you reference.

    So now the world knows that the CEO is passionate not complacent, and that he cares that employees shoud feel the same way. Whats not to like>?

  6. Does anyone notice that he basically told people to hack coke machines?

  7. the CEO found a way to squash employee engagement and mission alignment all in a single email. this is an outsider recruiter’s dream – so easy to pull folks out of there now…. dawn

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