Strategy Discussion – PayPal’s Sri Shivananda On Leadership & Shaping Corporate Culture

PayPal is an amazing company, being founded by a group of entrepreneurs that have gone on to do incredible things. Peter Thiel was a founder, while Elon Musk (Tesla) and Reid Hoffman (LinkedIn) were early employees. Elon Musk actually merged his company into the early PayPal, even though they were bitter competitors, as told by Thiel in his book Zero To One. I have always been intrigued by the company’s success to both assemble the right team, and then supercharge those individuals while at PayPal to go on and continue creating great, innovative ventures.

I hope you enjoy our recent conversation, shared with you below.

Loren: I was reading your recent work on the four phases of leadership, one thing that caught my eye was the importance of receiving feedback. Often both employees and their supervisors are reluctant to give feedback, and it can be uncomfortable to receive when one isn’t used to it. Then we have important cultural issues to overcome because in many geographies, it might be considered impolite.

Sri: Yes Loren, what I would say is that we are naturally capable of giving and receiving feedback. Almost through all of school, it was a high feedback kind of environment, we got feedback on everything we did and suddenly we come to the corporate world and it begins to disappear a little bit. I think there is for whatever reason, a certain lack of comfort, but I attribute it to this concept of building trust, when you build a trusting relationship with the people around you and it doesn’t have to be just your manager, I think what that creates is an opportunity for those conversations and I think there are two sides to it like you say: as a person providing feedback you need to create the opportunity for it to be received in the right way so the message that you’re trying to pass you have to think about it a little, you have to deliver it in the right way, at the right moment you probably should do it in a way that is not in public and so much more, and as a person who is receiving it, developing a listening mode and taking it at face value and considering it.

Two things I’ll say, the most critical aspect of giving and receiving feedback is this concept of psychological safety and the creation of psychological safety, and when you have psychological safety things can be said, things can be heard, things can be synthesized and people can work on it. The second thing I’ll say is without feedback most people wouldn’t know what to go work on and if you have to create an environment where people are willing to come and give you that feedback and how you receive it, it will allow them to gauge whether they want to give you feedback again and each time you receive it well they want to give you more; and each time you show improvement they feel like their feedback is actually working. So it’s work from both sides: the creation of psychological safety, the right environment of trust, active listening and then action from that listening that will make an environment of feedback great for everyone around.

Loren: You know that reminds me of a couple of things: one, I think of Andy Grove and his checkpoint employee one-on-one sessions. I don’t know if he invented it but he certainly helped to make it more famous, right? Ben Horowitz also has spoken of their importance. But another thing that you mentioned, what differentiates a real leader from someone who is merely a supervisor or manager and they’re not doing a bad job, but they haven’t earned the designation of leader?

Sri: Yes, and what I’ll do Loren is actually call our even more deltas between management and leadership. Management in general involves some thing that you’re managing, it’s either a set of people or a system that you’re managing and so on, and there the key outcome is around efficiency, that’s the main thing you’re focusing on.

As a leader you go well beyond that, you don’t just think of the efficiency itself but you go across into effectiveness and how do you inspire people? How do you get people to thrive? How do you get people to really reach potential and that involves more than just day-to-day management, and also when you think of leadership, it is not that you have to go through the path of management to become a leader.

Leadership is something anyone can do in the organization; even an individual contributor in the organization can be a leader in terms of their thought leadership or in terms of their influence and so on, so leadership at the end of the day is about connecting and creating influence and bringing people along towards a purpose or a journey, and that is a deeply interesting management, also is a deeply human thing to do when it comes to people management. But I would say as you grow in your career you need to do both. There are outcomes that need to be achieved, some of which is efficient use of everyone in the organization, all the things that are available to us.

Leadership on the other hand is to take the sum of parts and make it more than the mathematical sum of each part even, right? So leadership goes beyond just the area of management, it involves a connection that one, involves communication. It involves change management. It involves crisis management, and at the bottom line it creates followership, inspiration, direction towards a purpose, the sense of accomplishment and then wanting to do more together and so leadership is something that we all work at on a continuous basis. Management is as well but leadership takes a little while longer and has more human ingredients if you will, than just pure management.

Loren: I remember  early in my career I was working at a somebody’s company and I said to a colleague that I want to start my own company, and he said “if you leave take me with you,” but we were peers, and he was essentially saying “I want to work for you.” These were not people that reported to me, they were peers but they were kind of saying “we want to come and work for you” and you know I think I was still in my twenties. It really caught me off guard, and so that brings up my next question which is you know how important introspection is because it’s one thing, but how can we develop the skills of being introspective and have the right amount of self-criticism without falling into masochism where we can have low self-esteem and we’re beating ourselves up? But on the other hand we can have blindness and not enough self-awareness.

Sri: When it comes to self-development you want signals from everywhere, and we talked about feedback before, and oftentimes it feels like good feedback is rare. I think introspection, self-reflection and observation are key ways in which you can actually find a lot of things that you need to do and you need to improve on by yourself. It is something that I spend a lot of time on and it happens real time during the day, it happens based on observation I make during meetings, sometimes just at the end of the day thinking back about the day.

I have this ritual where normally on Saturday nights I sit back and think back on the week, and when I think back on the week there are many things that I feel proud and great about. Like you said, introspection is not just about reflecting on the things that are not going well and being very self-critical, it’s also about reflecting about things that went well, strengths that you used and are maximizing that too.

When I do reflection on Saturday nights my most important email notes go out on Monday morning, some of them are apologies to say “you know, I reflected on that conversation I had with you, I don’t think that was the best of me, I’ll do better next time,” and keep in mind that that improves trust even further with those individuals, and it becomes a great environment for collaboration too. So just if I were to summarize reflection, self-observation is very important.

In fact, most of us realize over time that our identity actually is something that we find within ourselves, we don’t have to think of ourselves as what other people perceive and as we go through the journey, everything becomes extremely clear, we know who we are, we know what our strengths are, you know what we bring to the table, we know what our weaknesses are, we know what our areas of development are, and that creates a roadmap that we can then use to develop ourselves, be the best we can be, knowing fully well that we are a work in progress, but come to the table in a way that we are continuously taking feedback, continuously improving and inspiring others to do the same as well.

Loren: The company PayPal where you are chief technical officer is, if you look at the founders and then if you look at some of the people and some of the things that come out of that initial group of people that came together to make it shows you the essential role of talent. If I look at myself now and myself maybe from 30 years ago, I knew it was important, but I didn’t realize just how critically important talent was.

I’m a fan of college football and the difference between a 5 star and 4 star recruit, or 4 star and 3 star recruit is exponential, not linear! Teams have to recruit the best people, but then you say “okay they got all these five-star recruits,” but then they also have to develop that talent. That is why just like with academics, some schools have a better reputation for getting players into the NFL because they prepare the players—BUT they have to start with the best raw material. My question is: How do you find those people? How do we filter and find the right raw talent? That’s something that eludes a lot of people who may have good ideas and great concepts but a lot of times they just don’t have the right team put together. You can have a great coach and great game plans, but you aren’t going to win championships if you don’t have the five star recruits!

Sri: Loren you said it so well, when it comes to creating an environment where people can thrive together as a community, it requires a lot of different ingredients, it all first starts with the purpose that you’re trying to pursue,. a great set of values and behaviors, and purpose on behalf of the company the mission that you’re on. That being inspiring is one of the first thing that attracts the best because together all of us somewhere want to make a difference in the world, so the initial income of people as they come in the reason they get attracted is what is the company up to, what are they doing, how will this company make a difference in the world, so that purpose mission values and behaviors are very important and we take that very seriously, we talk about it, we live it every single day.

Second is we believe that great talent is everywhere in the world, we are a global company and we go out to every place that we can find great talent and as we bring them in, we go through a process of onboarding where we know, look anyone they need a certain set of tools and training and also hand holding to get to their first success, so we invest in people getting to their first success and allow them to understand the culture of the organization, bring their diverse ideas into the mix, include them in every single process, allow them to demonstrate their specialty and feel a sense of progress. And when they feel a sense of progress, they actually want to be a part of the whole they want to do more. We also see how we can create an environment for innovation and creativity, and that means that people have an ecosystem and they generate ideas, the ideas are heard, they are tested they are tried, those things that don’t work, we discard them, those things that work we take them further and people see that cycle.

The biggest of all is that we are a learning organization, we don’t feel like we get everything right all the time, but as a learning organization we know every single choice we make, every single decision we make, we will look at how that fared, we’ll learn from that process, we’ll apply to the next choice and the next decision and so on. So, failure is a welcome thing in the organization, learning is something that we desire and when people see an environment where the purpose is great, there’s an amazing opportunity to learn, there’s progress being made, they get inspired. They’re not just engaged but they get inspired to do more and they want to continue to be a part of that mission. All of that plays a role, and at the end of the day the biggest asset that any business has is people, and without people none of us are anything as a corporation or a company and that’s why we focus a lot and we do many different things to develop people internally, not just in the day-to-day that I mentioned, but also through programs.

Like we have internal program called Good To Great, we have internal program called the Technology Leadership Program, so we make those investments as well, doing our best to elevate them further through step-function choices they can make in their education and self-development as well so, it’s holistic it is during the sourcing process, it’s during the onboarding process, it’s during the day-to-day work process, it’s during the opportunities that come up and all that together makes reason for why somebody would company come to a company like PayPal because they know if they come in here, they’ll have the opportunities they desire to make the career their dream.

Loren: It’s impressive, I mean I think that it’s interesting because we’ve talked about technology platforms and corporate strategy and things like that but to really understand more of the role of leadership and culture, not just PayPal products or successes. But it’s been exciting to talk to you about your individual…not just management philosophy, but I would say leadership philosophy and that’s been kind of an unexpected gem.

Sri: Thank you Loren.

Loren: Great, stay safe.