The CEO of the global money-transfer company explains how it brings in the multicultural voice of the consumer through a broadly diverse team of top executives.
When Western Union Holdings CEO Hikmet Ersek rang the opening bell of the New York Stock Exchange in May 2015, it marked 150 years since the WU ticker was the first listed on Wall Street. Few businesses are as long lived. Western Union is one of only two companies still left from the original 11 in the Dow Jones Transportation Average.
Since its founding, Western Union has played a prominent role in American culture and commerce. The company built the first transcontinental telegraph line across the United States in 1861, issued one of the first consumer charge cards in 1914, launched the first domestic commercial satellite into orbit in 1974, and sold the first prepaid telephone card in 1993—not to mention sending the first CandyGram in 1959. Some of the world’s great tragedies have played out by Western Union telegraph. These include the last message sent from the Titanic, a distress call reading: “SOS SOS CQD CQD Titanic.1We are sinking fast. Passengers are being put into boats. Titanic.”
You can’t send a telegram by Western Union anymore, but the company continues to thrive at the forefront of the cross-border, cross-currency money-transfer and payments industry. Across more than 200 countries and territories, the company has more than half a million agent locations, and it offers services through more than 150,000 ATMs and kiosks, along with the ability to send money to billions of accounts. In 2016, Western Union completed 268 million consumer-to-consumer transactions and 523 million business payments world-wide, moving more than $150 billion of principal for consumers and businesses.
McKinsey’s Kausik Rajgopal and Lang Davison recently sat down with Western Union’s CEO to talk about its multicultural customer base (and leadership team), finding the simplicity within complexity, and how Ersek surprised everybody with his choice to lead the company’s digital innovation lab in San Francisco.
The Quarterly: Western Union has a big global network of agents on the ground in a wide variety of countries. What makes this network distinctive?
Hikmet Ersek: For one thing, our customers aren’t like those of many other companies. We actually have two types of people we serve, the sender of the money and the person who receives it. For example, the sender could be an immigrant from a rural part of Tamil Nadu, who’s left India to find work in Canada. In this case, we have to understand that his relatives—the receivers—are in Tamil Nadu. They’re not in Punjab; they’re not in Pakistan. And that understanding has to drive where and how we open locations in Tamil Nadu, as well as where and how we open them in Canada. That’s a bit more complex than opening a typical retail location.
But what really sets us apart is the interplay between our digital business and the retail network. Our senders can send money from the phone in their hand, and the receiver can pick it up in cash. NGOs [nongovernmental organizations] can send money from their global headquarters in London, and their fieldworkers can pick it up in cash in a conflict zone. In India, parents of a university student in Canada can give cash to our agent in Mumbai, and the tuition payment is made to the university’s bank account.
In order to build a unique physical and digital network like this, you can’t sit in a corner office in Denver or San Francisco. You have to be in and understand the diverse marketplaces in the world. There is a lot of fundamental prework that has to occur before you can open anything. First you have to negotiate with the reserve banks. You have to talk things over with the regulators. You have to find the right agent for the location. And you have to begin all this with the voice of the customer in your head.
Many people say the voice of the CEO is very powerful. I don’t think so. The voice of the customer has more power. But if you can combine both voices in your day-to-day actions, it’s even stronger.
The Quarterly: You have built this network during a unique historical time, too.
Hikmet Ersek: Yes, to be fair, we have been lucky. Globalization has helped us—the expansion and mobility not only of goods and information but also of the global workforce. The increased movement of people across borders has been very helpful to our expansion. Globalization has also helped us have a unique brand. People may not speak English, but they recognize Western Union. Ours is a global language for moving money to support your loved ones. That’s Western Union.