Managing growing pains and gains – PayPal

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PayPal, a global e-commerce business which enables payments to be made online, is part of a select group of organisations currently experiencing tremendous growth. Speaking at The Economist’s CFO Summit 2013, Patrick Dupuis, Chief Financial Officer at PayPal, explained the steps being taken by the company to ensure it remained a growing, innovative business.

Evolving Within the High Growth Mobile Environment

Since Dupuis joined the business in late 2010, much of the company’s growth has been a result of the rapid developments in mobile technology. Two years ago PayPal was processing around $1bn worth of payment from mobile devices. In 2012 this figure grew to $14bn and in 2013 is expected to be close to $20bn. While these developments caught some industry giants by surprise, PayPal had already invested significant resources in its mobile division.

“We are way ahead of anyone else in terms of mobile payments. We put some of our best people on this way before anyone recognised the potential of mobile.”

The emergence of mobile also significantly impacted PayPal’s operating strategy. The company went from a model designed to support merchant transactions to one which needed to take into consideration the needs of consumers.

Constant Evolution

Founded in 2000, PayPal is a relatively established company within the technology sector. The business has had to rewrite its code a number of times to keep up with smaller, more flexible competitors, who are not constrained by 13 years of data. A lot of investment was recently poured into developing a new code to ensure PayPal was able to respond to changing consumer behaviour.

Another area the company has had to make changes is shifting the processes and focus of the leadership team. Dupuis explained that although Silicon Valley is known for creation and innovation, the most consistent and successful innovators, such as Apple, Google and Amazon, are also the most disciplined.

 “We are in the middle of a transformation where we are trying to get people to be less in love with just a bright idea and more with an entire solution and the reaction of their consumers.”

“Being Compliant Doesn’t Mean Being Slow”

Despite its position as a fast growing and innovative business, PayPal is well aware that it cannot afford to be a simple “Silicon Valley company”. Dupuis was quick to underline that in his experience the brightest ideas are not a replacement for organisation and people. The challenge is finding a balance.

“The world is going fast and we don’t have time to wait for financial systems to tell us how we’re doing.”

PayPal’s aim is to have the leadership team manage the company in real time, leveraging their experience to react to events as they occur. In terms of practical solutions, PayPal has taken full advantage of new technology to bring together employees from across the globe. There is also a focus on eliminating time consuming sit down meetings and replacing them with quicker, more informal stand up meetings.

“We’ve redefined a whole world of excellence in PayPal around three words ‘Simple Customer Focus'”

Fighting Bureaucracy

Dupuis explained that one of PayPal’s main challenges is remaining flexible whilst maintaining the level of organisation necessary for a multinational business to be successful.

“We’ve had to spend a lot of time fighting our own culture. Talking to three million merchants is very different to trying to figure out how 125 million consumers are going to behave across almost every country in the world.”

Dupuis described a number of the decisions he had to take in the past couple of years as “tough”. Although many were calling out for investment in new technologies and development, PayPal invested significantly in its backroom functions. Dupuis explained that he wanted these departments to be just as respected and innovative as the developers and front line personnel.

“Being a growth CFO, particularly when you have to protect a franchise that is growing 30 – 40 per cent a year, is also knowing how to support a bold idea and accepting that you might be wrong.”

A Shared Goal

Dupuis himself admits that the finance department probably feels he does not spend enough time with them. He would agree but points out that he prefers to learn from other departments and ensure they share a common vision of success.

“In a fast growth company the biggest problem you have is that you have very smart people who just don’t know what they don’t know”

PayPal ended 2012 with a revenue of $5.6bn, up 26% year over year. The challenge for the company now is to maintain this level of success without diluting the creativity that helped PayPal reach the top.

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