Leadership lessons from eBay’s CEO
interview in the FT with the CEO of eBay, John Donahoe. As the FT
say, when he became CEO in April 2008 "He inherited a beleaguered army.
Growth was faltering, and the
company had lost its focus by trying to do too much and ignoring needed
improvements to core products like Ebay.com." Shares in Ebay dropped
below $11 in his first year, 81% below their highest ever level. Since then the company is back on track, and the share price has recovered.
1. FOCUS on the CORE: one of the
boldest moves was to ignore the hype of Skype, bought by eBay in 2005, and float the internet
phone company. This left eBay to focus on the core business.
2. KEEP your HUNGER: Donahoe found a
company that had grown complacent. This is a recipe for disaster for any leader brand, leaving you open to competitive threat. As he said “Growth can breed complacency that makes you blind
to how other companies are meeting the customer’s needs better than you
3. NEW CHANNELS: Donahoe led a
drive into the emerging field of
mobile shopping. Ebay transactions on iPhone and Android apps topped
$500m last year. And eBay has been quick with its iPad app (below), which
according to Donahoe offers “the
best Ebay shopping experience we have”. And PayPal, also part of eBay,
is also rolling out a successful app that lets users
send money. Altogether, Ebay expects sales of $1.5bn in on
mobile devices this year.That's an huge extra chunk of core business
4. RALLY the TROOPS: Mr
Donahoe’s focus on new technology was partly the result of direct feedback
from employees who complained that eBay had lost its edge.
In December 2008 he got the top 100 people in the company together for the first time, along with
eight customer service people. They shared the complaints they were hearing from users. More impressively, Donahoe has implemented a process where the top 100 managers to spend a week a year
at a customer support centre. This is similar to Tesco's TWIST programme: Tesco Working In Store Together, where top managers work in store for a week every year.
5. STAY CLOSE to YOUR CUSTOMER: Donahoe
interviews eBay customers face-to-face every quarter, filming the sessions on a Flip camera and emailing clips to the relevant product manager. As he says. “We have 80m customers. It’s easy to lose
sight of the fact that there’s a guy just trying to make a living
selling antique watches, and a change we’ve made is making his life more
difficult.” How many CEOs or even marketing directors have this sort of ongoing customer feedback process in place?
In conclusion, to stay ahead leaders need to focus on the core, and keep the hunger for growth alive, staying close to both people in the business and customers.