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Internal Communications Lessons from a PayPal Fiasco

Internal Communications Lessons from a PayPal Fiasco

Good initiative, bad judgment.

That’s how I’d characterize PayPal President David Marcus’ message to PayPal employees leaked to VentureBeat.  His note can be summarized by his final paragraph as posted by the same publication:

“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 every day is a waste of the precious time you have on this earth to make it better. [emphasis added]”

“You” — not “we” or “us” — but you.  You people.  You are not like me.  The language is alienating.

Here’s the good, the bad and the ugly.

The Good

Employees are one of the most under-recognized allies a business has during a crisis, especially in a digital world. Too many businesses relegate their marketing or PR shops to playing social media cop, rather than social media enabler.  Our employees are better than most companies give them credit for; think:  3M’s 15% of time policy lead to PostIt notes.

Businesses should want employees to speak out, to evangelize, to spread the enthusiasm for their product, service or brand. The days of corporate communications Gestapo are over – word gets out, it spreads, and when it does, it’s published in a context over which the company has had no role in shaping.

We cannot stop leaks. If we put it in writing, the content can, and will, wind up online.

A better strategy is to frame it – to sync up employee communications with public communications. The path to doing this successfully is to be honest and though it’s becoming cliché, transparent. It’s never hard to get a story straight when we speak the truth.

What if Mr. Marcus posted his note to a blog?  What’s in the open is usually far less newsworthy and he would have chosen his words more carefully.

Even so, the man is brimming with passion for his product and he recognizes employees, and more importantly their behavior, as important signals to the market. He’s precisely right and so his instincts and initiative are in the right place.

david marcus paypal


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The Bad

If a company has products consumers will not use, it is in trouble.  If a company has consumer products its employees will not use, it is in major trouble.

It’s hard to know what PayPal’s financial disposition looks like: The company [at the time of this writing was] is owned by eBay, and accounted for 41% of eBay’s revenue in 2013, according to PayPal’s media page. eBay has demonstrated revenue growth and profit stability for the last few years.

There’s one problem: usability.  The ease of use brought to us in consumer gadgets has fueled the consumerization of technology. This trend is not about commoditizing products for scaling sales, as Apple as proven, it’s about making products both valuable and easy-to-use in order to grow sales…as Apple has also proven.

PayPal is not easy to use. My password for PayPal is 16 characters long, counts both upper and lower case letters, several numbers and several special characters. Counting all the systems I have access to – across personal finance, military and my civilian workplace – I’d estimate I have at least 50 passwords (and probably more) that are equally challenging structures. It’s simply not possible for me to remember them all, especially when I might access them only every few weeks; but when I need access, I really need access.

It gets more complicated – my bank for example now has triple-authentication measures – and fourth if a customer calls them on the phone – and that’s not counting the fact my bank knows if I’m “calling from a phone in my profile.” The weakest link is fast becoming that yellow sticky note hidden secretly under our mouse pads.

It’s just too hard.  When I need to make a purchase, I need to make a purchase…it’s far easier for me to whip out a plastic card that fits in my wallet and re-type the 23 digits I need to process a transaction.

“In many ways employee communications is like a bank account – we’ve got to make a few deposits before we can write a check that does not bounce.”

online purchase meme

The Ugly

Just this week, David Marcus’ own credit card was hacked.  He might have done well to start his missive to employees by explaining why he chose to use a credit card in the first place, rather than PayPal for whatever the transaction.

Regardless, his comments come down to tone. While I admire a leader passionate about their products and who recognizes the influence their employees have in its success or failure, people don’t respond well to screamers. This is especially true in business, where a highly educated and independent workforce thrives on inspiration and rejects didacticism, especially that which is non-sequitur.

Despite the economy and job outlook, there’s usually a backdoor for a talented workforce.


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Choices in a Path Forward

In many ways employee communications is like a bank account – we’ve got to make a few deposits before we can write a check that does not bounce.  When we make withdrawals, we need to make them carefully, because the effects of compound interest can last a lifetime.  We never have as much in equity as we think we do; markets are a psychology.

I suggest the following principles:

1) Leadership. Communication is a function of leadership; if we can’t talk honestly to employees through a keyboard no less, than who can we talk to?

2) Discomfort. Leaders should communicate consistently in good times and bad. Even answers to those uncomfortable questions are valuable – those are the deposits today that we’ll need to withdraw from tomorrow.

3) Feedback. When a leader can’t accept feedback they don’t like to hear, they are on a path to flying blind. Obtuse is not an endearing adjective.  The foundation will be crumbling and we’ll  never know, until we really wish we did.

4) Admission. We live in a culture where making a mistake is the mark of weakness, so it defies expectations, which by definition is news, and the opportunity to chart a new path. We can’t wait a week to do it, because in few days the media will forget, but the employees will remember.

Your turn; what would you add or contend?

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