The old saying that the sun never sets on the British Empire applies well to Atlanta-based Global Payments Inc. Daylight is always shining on some part of this company’s domain, too.
In the company’s decade of existence, Paul Garcia has led Global Payments from its birth as a $300 million-a-year spinoff from National Data Corp. to its current status as a $2 billion-a-year Fortune 1000 company with more than 3,700 employees living in 26 nations around the world.
Doing business in far-flung locales presents an interesting set of geographic and cultural challenges for the electronic payment processing firm’s leadership team. Garcia, Global Payments’ chairman and CEO, recently talked with Smart Business about the nature of those challenges and about how he and his team work to surmount them.
Q. Looking back over the last few years, what is the greatest leadership challenge you’ve faced?
I would say it stems from having almost 3,800 employees in 26 countries. We are strong believers in our company’s values, but those are sometimes very tough to translate. You have cultural issues, you have language issues, and you also have time zone and distance issues, obviously.
Today, I spoke to our colleagues in Asia. They’re 13 hours ahead of us. If it’s morning your time, it’s night there. So you’re in very different ‘head spaces,’ you know? Their day is over, and they’re thinking about going and getting a cocktail somewhere, and your day is just starting. Or vice versa.
Obviously, [everyone] wants to go home at night. So we do our best to mix it up. And that’s a challenge. All those geographies, all those cultures, all those time zones. And there’s always something going on. You have things happening 24 hours a day, literally. So sometimes you have to disconnect. Sometimes you have to put your BlackBerry down.
Q. At what stage in your company’s development did this start to become a significant challenge for you and your team?
Let me give you a little history. We just had our 10th anniversary. Ten years ago we had about $300 million in revenue, and we were all basically from the U.S. Today we’re at $2.1 billion, with 45 percent of it coming from outside the U.S. So we have significantly more revenue outside the U.S. than we had in entire-company revenue when we began.
These challenges started to become evident pretty quickly, because we started doing deals outside the U.S. right away. The first was Canada, which in some ways is not that big an adjustment from the U.S., but, you know, it’s still a different country. In fact, in my opinion Canada is more like Europe than it is the U.S. in a lot of important ways.
Then we did a deal in Asia. And that immediately created challenges with distance and cultural differences. Then we added the U.K. to that. Then we did deals in the Czech Republic, and Russia, and now we’re also in Spain, and Brazil. …
So it happened quickly. When I took over this company, I looked at the opportunities, and I said, you know, the most dramatic opportunities are outside of our borders. So that’s what we focused on.
Q. Let’s talk about the specifics of some of the difficulties posed by doing business around the globe. What’s a typical situation that you run into with time differences?
Well, take this interview, for example. If you wanted to chat with me and you were in Hong Kong, it would now be midnight your time. So we’re only going to have a skinny window. You’re going to talk to me at 7 or 8 o’clock [p.m.] your time, which is going to be 6 or 7 a.m. my time. Then if we go too much later, I’m now really cutting into your evening, and you’re really cutting into my morning. So it creates practicality issues, in terms of just finding a good time to talk. And ultimately, management is about people talking to people.
Culturally, it’s a different type of challenge. For example, on Dec. 31, you would wish me Happy New Year. But if you were talking to someone in one of our 11 Asian countries, you would be mistaken, because their New Year starts three weeks later. And right after that — right around now, in fact — they have what they call Golden Week, which is their big shopping time, when all the merchants are very busy. So this is a huge peak period for our business there. But this time in the West is not a busy shopping period at all. It’s just the opposite.
So it’s very different. There are different cultures; there are different shopping patterns; there are different consumer behaviors; there are different expectations from employees. And you have to ‘get’ all of that.
Q. With such distant business units, how do you structure your management team?
One of the things we do is that, unlike a lot of American companies, we don’t say, you know, we created this whole merchant credit card environment, in terms of automation and sophistication, and consequently we’re going to make sure we have people from our head office in all of these regions running these businesses. We do the opposite. So we have a really smart Russian guy that runs [our business in] Russia. We have a really smart Chinese guy that runs China. A very accomplished Indian lady who runs India. We’ve got a top-notch English guy that runs England. We have a great Spaniard that runs Spain. A Brazilian that runs Brazil. … All the way down the line.
So they’re running their country or region. And they ‘get’ the cultural differences, because they’re from there. And they know what they need. Our job is simply to provide support to them. Where we can provide assistance, we do. But most of the time we stay out of their way.
Q. What else have you done to overcome the geographic challenges?
I know this sounds trite, but the most important thing is to hire good people and empower them and give them objectives.
So this is how we do things here. If you’re in charge [of our business] in a given country, you’re really in charge. You have a lot of latitude to run your business. Now, if you make your numbers, you’re going to do well. You’re going to be rewarded; you’re going to make your bonuses; you’re going to receive equity compensation; you’re going to be given even more latitude. If you you miss your objectives, then, frankly, unless we all understand that there were extenuating circumstances, you’re probably not the right person for that job. Because we ask you to set the objectives. We have realistic goal-setting, and we expect people to make those numbers.
Now, that doesn’t mean make them at any cost. You always do so in an ethical, honorable way. But we do expect production. That’s the capitalist world we live in.
Q. Can you give an example of a situation where a translation mistake was made or where there has been confusion or misunderstanding because of the way something was translated?
Here’s a good one; it shows how even the best intentions can lead to unintended consequences: We had a meeting once, right after we did a deal in China, and we told the people there that it’s really not part of our culture to work six days a week, so we won’t be requiring people to come in to the office on Saturday. We expect you to get enough production in the five days a week, and it would be an exception that you would have to come to work on a Saturday. And the staff seemed upset by this. So I said to the guy running it, what am I missing here? He said, if they don’t come to work on Saturday, all their neighbors will think they’ve been fired. So they’re going to put on a suit and go somewhere.
Q. How did you respond to that?
We said, you know, that isn’t what we meant to convey; that isn’t what we’re trying to accomplish. So we will continue to adhere to what you’re doing in this region. The office will remain open [on Saturdays], and we’ll continue to serve the beverages, and we encourage you to come in. And I apologize because we weren’t being culturally sensitive.
Q. Your company has grown quickly, and a lot of the growth has come from acquisitions. What types of challenges does that pose?
There’s an old expression — it’s kind of corny, but it’s true — that the first word in merger is ‘me.’ When you merge companies, you’ve got to answer the ‘me’ questions. What about my job … my pay … my location … my boss … my products … my future … my retirement? And you’ve got to encourage people to ask those questions, because they’re important. They’re providing for their families, they’re working for that reason, so you need to have answers. And we have good, crisp answers for every one of those questions. That’s how you start off a new relationship properly.
Q. Let’s delve into what you’ve learned as you’ve addressed this challenge. For example, let’s say I’m the CEO of a company and I’m thinking of expanding into a country in Asia. What’s the most important thing I should know? What should I be watching out for?
The first thing you have to do is answer this question: What exactly can you do that will advance things — whatever service, whatever product, whatever business you’re in — what can you do to make that business better? But if going in and doing it is going to cause some serious cultural shifts, don’t even think about it.
Also, always look for good local management. Those are the two keys that I have never violated, and it absolutely has paid dividends.
So those are the things that you have to do, and you have to be very honest about them. And if you’re talking about, OK, we are going to have to change this wholesale; we do it this way in this country, but they don’t do it this way in that country — forget about that. That’s a disaster.
Q. So when you say forget about that, what would you do instead?
Well, you have to look at things that you really can do. And if the answer is, I don’t know if I really can make this better, then save your shareholders the write-off. Don’t do the deal.
Q. Don’t go into that country at all?
Yeah. Let me tell you: The road is littered with companies that do deals internationally and they fail. Because they’re either arrogantly thinking they can run it from the United States, or they don’t understand the local markets, or they try this one-size-fits-all [approach]. It doesn’t work that way.
Q. So you’ve had situations where you’ve given serious consideration to expanding into a country and reached the conclusion that it’s a bad idea and backed out of it?
We’ve had several. Several [markets] that I’d really like to go into that have tens of millions — in one case, hundreds of millions — of people. But I haven’t done so because their payments market is different. It’s either priced in a way that you can’t make money, or the relationships you have with the merchant and the card-issuing bank are not defined in the same way. We’ve resisted going into those markets, until either we can think of a way that we can help — I mean, if we get to the point where we really believe we can change it — or it changes on its own. So you’ve got to be disciplined about that.
Q. I gather that your company has a very decentralized management structure, with a lead person in each country who has a lot of autonomy. Would you say that’s an accurate description of how your business is set up?
Absolutely. And I think that translates into a couple important things to remember. No. 1: Management is simply people taking care of people. Your job as a manager is to help someone do their job. And to always be a moral example, to make ethical decisions that are above reproach.
And the other thing to remember is that people want to do well. It’s very important for someone’s life — what they do, how fulfilled they feel, coming to work feeling that they’re doing something that’s meaningful, receiving appreciation in an environment that’s conducive to success. And that’s the CEO’s job. It starts with one person, then it filters down from there.
HOW TO REACH: Global Payments Inc., (770) 829-8000, www.globalpaymentsinc.com
THE GARCIA FILE
Name: Paul Garcia
Title: Chairman and CEO
Company: Global Payments Inc.
Born: Newburgh, N.Y.
Education: Ithaca College, Ithaca, N.Y.; bachelor’s degree in history, 1975
What was the first job you had?
I started working when I was 14, and I’ve had some doozies. I worked in a factory at night. I drove a laundry truck. I was an industrial plumber. I was a form setter. I’ve been a waiter. A busboy. … Then, post-college, my first job was with Citigroup in New York. I got into the payments business, travelers checks, commercial instruments at that point. It was very exciting.
What’s the most important business lesson you learned from that job?
Show up. Just, be there. Be there on time, keep your nose down, raise your hand when someone needs a volunteer. And don’t give up. Don’t get discouraged. It’s not perfect. I mean, I was naive to think that, ‘Boy, Citigroup, they’re going to have the most enlightened managers.’ It wasn’t necessarily the case. So you have to hang in there. It’s amazing what you can accomplish if you just hang in there.
In a nutshell, how do you define success?
That’s a tough one. The first thing you would say is, ‘What’s your return to your shareholders?’ I mean, this is capitalism, so you’re expected to make money. But I think it’s deeper than that. I think you could have significant shareholder return, but if you’re a [company] that is not helping your community, not helping your people, and not providing a true service to your customers, that’s built on a house of cards. That’s going to collapse. So while ultimately the bottom line is the most important thing, it has to be a sustainable bottom line. There has to be true service, with employees who are loyal and customers who are loyal.