Melissa Smith Discusses WEX’s Culture And The Future Of The Company
In an interview with CEO Forum’s Robert Reiss, WEX CEO Melissa Smith discusses how her mantra of embracing the discomfort of conflict that comes with diversity of thought, has created a winning culture within her financial technology company.
Reiss knew little about WEX prior to researching for their interview, so Smith educated his audience by describing WEX as providing payment technology to a lot of different industries. “In healthcare, if you have an HSA account or an FSA account, we’re probably the technology that sits behind that to make sure that you’re spending money on things that are really tax-acceptable. If you’re a business that happens to have vehicles we might be the people that are providing the technology to allow you to pay for things for that vehicle like fuel or service. It runs across the gamut. If you book a hotel online with Expedia we’re probably the technology that’s making a payment on behalf of Expedia to all the hotels in the world. We are highly integrated and very technology-based.”
How Technology Is Driving Companies Like WEX Forward
For WEX, technology has always been a place where the company competes. As Smith described it, everything WEX does is integrated and today oftentimes is integrated through an API. Most WEX platforms sit in the cloud, allowing the company to develop technologically at a faster pace, and as technology changes, WEX can increase the speed of deployment of new product capabilities to its customers. AI is particularly exciting to Smith because it allows WEX to be more scientific when rolling out new product features or new ways to service a customer. “As an example, we rolled out a bot to our healthcare customers which allowed us to increase customer satisfaction rates while lifting some of the calls that were going into our call center so it was a twofer. It made our customers happier and it made us more efficient.” WEX continues to evolve as technology evolves and deliver those technological advancements directly to its customers.
How Does WEX Differentiate Itself From The Competition
WEX has over 5,000 employees and a little over $1.7 billion in revenue. Reiss asked Smith to describe how she would account for WEX’s success to which she replied that WEX’s growth has been organic. As a foundation of that growth the company focuses on making sure that the products WEX offers are differentiated and sit on strong technology. WEX is bringing to market new features and functions that allow its customers to do things that they can’t do with other companies. “This gives us a competitive advantage and as we continue to roll out new products and features every year that creates a bigger gap competitively. You can see that with our customer wins.”
Smith also attributed WEX’s success to maintaining deep relationships with both employees and customers. “It’s one of our cultural values and you can see that play out with 20- 30-year customer relationships, and we have a lot of 10-year contracts which is kind of unheard of in the marketplace but it’s something we continue to do and I think that’s just because there’s a lot of trust with the brand, with the relationships we have that we’re going to take care of our customers first and foremost.” As to WEX employees, the company celebrates a deep bench with significant longevity within the employee base. The customer care WEX provides is a natural extension of that loyalty and enthusiasm.
WEX Works With A Number Of Verticals – Are There Limits To That Range?
As Smith describes it, WEX focuses on verticals because by focusing the company can create very specific competitive advantages. “If you look across our customer base, however, we’re servicing almost every SIC there is, certainly in the United States but even outside of the United States.” This points to how diversified WEX actually is.
WEX Works With A Number Of The Major Players In The Economy But Also Celebrates The Smaller Customers
WEX works with companies like Exxon, Enterprise, and Bank of America, which is exciting and the company embraces that opportunity. WEX also values the work it does with small- to medium-sized businesses. As an example, “We might do business with a local landscaper where we’re meeting their needs, or a startup company, and then we can pivot and work with some of the biggest companies in the world. There’s a scalability to what we do which I think is really interesting.” WEX can provide the technology for a smaller company or a start-up, it scales as they grow, “and there’s a benefit for both of us in that,” Smith goes on to say.
WEX Is Known For Its Company Culture
Smith describes WEX’s culture as being built on a foundation of diversity of thought. She prioritizes building a diverse staff around her and wants her leadership team to be made up of very different skills and backgrounds. This can be about from where in the world they originate (over half of her team was born outside the United States) or whether they’ve worked predominantly for small companies or large companies. “What I like about that is that when you’re in the middle of a strategic conversation, people see that same issue or same goal from very different viewpoints and we get a better result from that. You have to allow the tension of that to play out and then once you come to a resolution it has to be a definitive resolution: ‘Okay this is what we’re all agreeing on and it’s what we’re going to go do.’ I just have found that we end up with a better product, a better result even if it’s uncomfortable in the period of time that we’re developing it.” While the journey through those difficult conversations can be fraught, the end results in a better product for WEX to deliver and a stronger and more fulfilled team.
Keep The Personal Out Of It
What Smith emphasizes as the leader of a diverse team is that feelings must be left at the door when participating in team discussions. Nothing’s personal, it’s just about the business. “I think that’s an important point that it’s okay to debate the issue but you don’t personalize it. That’s an important distinction.” She gives an example from her own experience: “Let’s say I’m doing an all-company meeting in one part of our company, I’ve gone to visit a location. I call them the ‘finger pointing moments’ when someone in the crowd will say ‘Well let me tell you what I think!’ and I remember in that moment I have to just breathe because it’s uncomfortable for me. I am in front of the room and someone’s giving me potentially a different perspective but in that moment what I tell myself is that this is what I want. I actually want to hear from people – I want them to feel like they have a voice. It doesn’t mean I have to agree with them, which is the other point I’ll make. I’m okay getting your input but it doesn’t mean I agree or I’m going to do what you tell me but I want to hear your perspective.”
What’s interesting about this set-up for a company is it creates a unique dynamic within the hierarchy. As Smith describes it, positional power doesn’t mean as much at WEX as maybe it does at other companies. “You actually kind of have to earn your spot and I actually, I like that. It’s more of a level playing field.” Because Smith encourages diversity of thought and encourages employees to share what they’re thinking, she creates a more egalitarian culture, which is ultimately good for employees, for customers, and for her as a leader.
Balancing Parenthood And Career
In 2014 Smith was made CEO of WEX after a 17-year tenure and in the same year she had her first child. “I like to say I think I became pregnant the same moment I became CEO.” Smith talked with Reiss about what she learned that year.
After becoming CEO and sharing with her team that she was going to have a child, the team conducted research on their situation to learn the protocol regarding issues like disclosure. “We were surprised when we couldn’t find another example of a woman who had become pregnant and was a public company CEO, ever. So we had to think about things from a disclosure standpoint that we hadn’t had to think about before.” They had to write the book on protocol for a pregnant CEO of a public company.
She also learned how supportive people can be. “I expected women to be supportive. What I hadn’t expected was what I got for support from my male colleagues, particularly those with daughters.” The support and encouragement she received reminded Smith how good people can be and it bonded her more to her employees. She had to talk about something she saw as very private with the whole WEX workforce. “Of becoming pregnant, becoming a first-time mom, taking maternity leave, all those things.”
This was true on an investor front too. Smith received an outpouring of support from WEX’s investors. “They were great and really supportive of the fact that I was going to be out on a maternity leave and that I was going to be new in this role.”
Smith also grew as a person, when faced with the challenges 2014 brought. She expanded her ability to withstand difficulty and developed an even greater breadth of experience to tap into. “I learned that there’s this depth to yourself when you get into a situation and you get pushed and it’s true during the pandemic as well when you’re in these hard spots it’s when you really learn what you’re made of and you learn exponentially. For me just going through all that change at once – when I took over I had changed the structure of the company, we changed the M&A strategy, we changed out a number of the people, and now I was becoming a first-time mom – so it was just a lot all at once but I took away from that that people are just capable of a lot. Not just me but the people around me.”
Smith’s empathy grew as well, and the culture at WEX has continued to evolve and change but that emphasis on empathy is a big part of who WEX is as an organization. Smith encourages resilience and she also encourages compassion. She believes that if she can continue to be clear as a leader about what her end goal is for WEX, as long as her people are resilient and compassionate, the rest will take care of itself. “People can be resilient if you’re clear about what you want the end to look like – and that’s something I keep trying to be is clear – not just what I want the company to look like but what I want it to feel like. Part of it is recognizing that people bring to work every day their whole selves and that whole self may be me as a new mom that’s trying to figure that out – it may be for somebody else that their whole self includes caring for an ailing parent. You don’t just eliminate that stuff when you come into the workday.”
Smith recognizes in this era of working from home during COVID, that that blurring of lines is an even bigger part of the cultural component. “It’s important to recognize the fact that particularly now there are not these big barriers between your work life and your home life and honoring the fact that all co-exist.”
Advice For Women Who Want To Become CEOs
Smith’s advice for women who want to become CEOs is twofold: build relationships with sponsors and get experience running a P&L (profit and loss report). “I think it’s really important to have sponsors which is something that I did indirectly. I had sponsors because I wanted to be really good at the job I was doing which at that point in time was the CFO – I was the CFO when the company went public and I formed a really strong relationship with the chair of our audit committee and he became my feedback person. And he gave me feedback sometimes I didn’t like and my job was just to say ‘thank you’ and to listen to what he had to say. That relationship and the relationship which I built with other people on the board along with just executing mattered. I would tell people to seek out sponsors, not just one but multiple people because they will help you get better. And then be really open to the feedback that they give you even if you don’t like it, it’s really important.”
Inspiration And Heroes In Her Life
Smith was fortunate to be raised by a fabulous mom. The stories she has told about her mother over the years have been an inspiration to many. “My mom is brilliant. My mom graduated from college when she was 19 and has a Master’s in Mathematics and she was divorced with three girls by the time she was 30 and she was very clear with all of us that we were to be independent and independent meant that we need to find careers, we need to be educated, and she did that in subtle ways as we grew up.”
Smith became an independent, successful adult and a lot of that she attributes to the way her mom raised her sisters and herself. One of the things Smith’s mom used to say to them was “Why not?” if they came to her hemming and hawing about whether or not they should do something. “When I came in with the whine of why I didn’t want to do something or why I couldn’t do something she would say ‘why not?’ and she would push until we tried things that we didn’t think that we could do. All the way through she set this expectation that you’re going to go to college, you’re going to be in a career, and you’re going to be able to choose to be with a partner in your life but you’re not going to have to be with a partner in your life.” For a young woman to be directed by her mother to create a life for herself that didn’t require relying on anyone else is a pretty rare bird, and may be a big part of why Smith has achieved all that she’s achieved in her life.
During The Pandemic How Did The Customer Focus Change For WEX?
In the very beginning of the COVID outbreak, like a lot of companies, WEX was primarily focused on safety – customer safety and employee safety. “We went into pretty heavy communication mode with our customers trying to figure out how best to support them and I think that that just built bigger bonds.”
WEX also had to prioritize spending in a year where there was a lot of uncertainty and where it therefore made sense to be more conservative than usual. “WEX has always been a growth company as long as I’ve been here over 20 years and we’ve grown every year except this year. We just had to learn different muscles this year and some of that was making sure that we retained our customers, that we’re meeting their needs and that we’re moving money into areas that are going to create future growth opportunities for us.”
WEX also needed to be resilient when facing an unclear outcome. Within that constraint, Smith emphasized that WEX needed to “make sure that the company was set up in a way that it could thrive with multiple outcomes. It has become a little bit more clear as we’ve gone through the pandemic what it’s going to look like but as we were starting this it really wasn’t clear what would play out over the year.”
Smith went on to say how grateful she is to the people of WEX for how they withstood the challenges of the past year: “I’m really proud of how people have bonded together, how we’re coming out of this a much more resilient company and how we’ve learned new muscles that we didn’t have going into this. And the relationship with our customers has proven to be really strong.”
The Future And The Role WEX Will Play In The Economy
Smith is excited about the future, and she’s especially excited about where technology will take WEX. “You know what is possible is just evolving and so our capability and what we can do for customers is just increasing exponentially and that’s really exciting for me. With the introduction of artificial intelligence, the use of data – we have just so much data going through our organization – it’s allowing us to create products and options that we just hadn’t envisioned in the past and so I see us doing more and more as we move into the future.”