Why PayPal’s David Marcus is a boss but not a leader

An internal email was recently leaked, wherein David Marcus, the president of PayPal, scolds his employees for not having “passion” or “gusto” for their jobs. I’d like to think that the tactic Marcus employed is something of an outlier. However, the truth is that it’s much more common than it should be.

Being a consultant, I’ve peeked behind the curtain at dozens of companies. I’ve also worked for several large firms. And a recurring theme at many of the businesses I’ve observed is the habit of the executives to become disconnected from their employees. And being disconnected is the only thing that could have convinced Marcus that his email was a good idea.

Above: David Marcus, president of PayPal.

Image Credit: Adam Tinworth/Flickr

Company culture flows down from the C-suite. Employees look to their bosses for guidance in many aspects of business, including culture. Think of a few companies you’re familiar with. If a company has a lackadaisical, somewhat lazy culture, does it also have a group of executives with those same traits? Likewise, if you know of a company with a cut-throat, do anything for the sale mentality, does its management possess those qualities?

Often when a manager or executive lashes out at their employees, they’re doing so because it’s a knee jerk response to having a mirror held up to their own actions. When someone is presented with their own shortcomings, they usually go on the defensive. The email by Marcus was a defensive act. It was a reaction to what he felt was a culture of apathy. Instead of examining the cause of this apathy, he flew off the handle and blamed it on his employees.

A popular picture that is making its way around the internet. It shows a boss being pulled along by his employees while he shouts orders. Juxtaposed to this image is a leader, first in line, pulling alongside his employees. It illustrates a point that I’m trying to make. Leaders lead, they don’t boss. They don’t make commands for attention, their actions command attention.

I can understand that Marcus is under some pressure right now. Smaller, more agile companies are coming on the scene and stealing PayPal’s thunder and clients. Just a few days ago, Whole Foods tapped Square to be its payment partner. And more and more small businesses are opting for Square’s ease of use over PayPal. So, maybe Marcus was just having a bad day. But reacting the way he did is going to have the opposite effect than what he was hoping for.

A true leader would look at the apathy rampant in their company and they would look to change the culture from the top down. Instead of demanding that employees take part in referring businesses to PayPal, a true leader would audit the program and see if they’re incentivizing employees the right way. They would ensure that managers were making this program a priority and taking part in it themselves. They would find the root of the problem instead of focusing on a byproduct of the problem.

A leader wouldn’t scold his employees for their lack of innovation. Rather, they would ensure that innovation was nurtured. They would commit resources to support those that pushed for innovation. They would make innovation such a common place event in their company that those who didn’t take part in it would feel out of place.

As I mentioned above, I’ve seen some poor examples of leadership, but I’ve also seen some amazing displays of it. Carl Hewitt, the CEO of Decisions, continually creates a culture so rich and engaging that he often finds employees of his previous firms wanting to follow him to his new endeavors. Likewise, I’ve witnessed Michael Sainsbury, the CEO of Arellia, lead his people and foster a great culture even though he works 8,000 miles away from most of them. He is based in Sydney, but this hasn’t stopped him from ensuring the right people and culture are being promoted here in the States.

Marcus’ email shows that leaders aren’t necessarily bosses and being a boss in no way makes you a leader. As John C. Maxwell once said, “A leader is one who knows the way, goes the way, and shows the way.”

Mike Templeman is CEO of Foxtail Marketing, a digital marketing agency specializing in content marketing. When he’s not writing about the tech industry, startups, or marketing, you can find him hiking a mountain near his home in Utah. You can follow him on Google+ or on Twitter.