Tim Murphy has worked for MasterCard for 16 years. Starting out as an in-house lawyer, he then spent over ten years in non-legal business roles, serving as president of the US region and chief product officer. In 2014, he stepped back into legal to assume the mantle of general counsel. In the first of a two-part interview, GC catches up with him to hear how working in the business has shaped his vision as GC.
GC: You’re back as general counsel after ten years in the business. What are the key qualities or learning experiences that those years in the business have given you?
Tim Murphy (TM): Perhaps the best way to start is with a quick view of the unique differences between ‘the business’ and ‘the lawyers’. Broadly speaking, I think that lawyers, particularly commercial lawyers, are very good transaction executors and issue advisers. Of course, this an oversimplification but because commercial lawyers are very smart and are usually given really tough problems, they get really good at those two things. The danger is to see them as the be-all and end-all.
What I discovered on the business side is that our product and customer teams actually have really tough jobs! They call on entirely different skillsets than issue advising and project execution. Being conscious of the different forms of human intelligence – and the things you don’t know you don’t know – can help you and your team as executive leaders and partners to the business.
MasterCard is fundamentally a B2B2C business. We execute through partnerships with merchants, financial institutions and other players. Any time there is a B2B link, you are in a relationship business. It’s tough and subtle work.
Building strong relationships and strong partnerships, especially with large customers, is something lawyers don’t do enough of, particularly if they are in-house. For example, I now see so much opportunity in my job today to build relationships with the GCs of our customers and help support the business relationship.
In addition to relationship management, my other major learning is what you might call ‘integrated strategic thinking’ or identifying a challenge out of an ambiguous set of facts. Lawyers with analytical and legal skills are good at being able to do this. Then – on the business side – you have to build a team, sustain execution against this through various twists and turns and ambiguities, and stand the test of time. That’s a much harder task than advising.
Finally, I think there is something to having a degree of comfort with the financial side of the business, getting up to speed with financial trends and lingo. Managing a P&L [profit and loss] is one of those things where if you don’t know it, it can come rather quickly; after all, it’s just addition and subtraction. The trick is to learn how the numbers tell a story, and that comes with experience.
GC: Were there any aspects of your legal training or experience that really assisted you in the business role?
TM: As lawyers, we’re accustomed to really tough, robust negotiations. That’s an incredibly valuable and highly transferable skill. I have certainly found in my business conversations that I have been more effective at negotiating some tough issues because of some of my legal skills.
One of the great negotiating tricks is making sure that you’re working off a single document. Lawyers do this every day in negotiations. I have found that even something as pragmatic as writing down on one sheet of paper what each side is thinking can be very impactful in a business negotiation, and lawyers know this. It also really matters that you get in a room, face to face.
Being able to think through complex, multifactored issues and come up with options and a path is a hugely powerful and valuable part of legal training. There is also something about really good lawyers doing a great job of explaining complex things simply. That legal skill of boiling down and distilling and coming up with a single, simple narrative or argument really helps in business.
GC: You achieved great success in the business side of MasterCard, so what attracted you to resuming a legal role?
TM: We are a top Fortune 500 company and we have a transformational leader in our CEO, Ajay Banga. To work directly with him and to be able to sit on our management committee was not something I felt I could pass up.
Also, at this stage of MasterCard’s history there are two incredibly exciting things happening in our business in which, as the company GC, I knew I could play a leading role. First is the explosion of digital payment solutions around the world. 8% or 9% of our transactions are digitally-enabled today, which will go up to 25% in the next five years. This is strategically explosive, and it creates challenges and opportunities for MasterCard. Whenever a company goes through such a fundamental transition a lot of good work has to happen to navigate it, and I think we are doing very well on the business side. Any time there’s any kind of transition, it raises a lot of important legal and other issues, ones that the legal team can help navigate. So, I feel I am adding real value by being able to combine both perspectives.
As I said, Ajay has been an extraordinary leader for us, driving a mission-driven strategy with an authentic business focus on financial inclusion. There are two billion people in the world who don’t have access to basic financial services, and electronic payments can be an important on-ramp to financial inclusion. When you are stuck in a paper economy you are stuck with a lot of expense, wasted time and a tonne of insecurity. In order to grow the business, and also because it is the right thing to do, there are meaningful opportunities for MasterCard to bring electronic payments to underserved consumers. We committed publicly to a goal of 500 million new consumers on our platforms in the next five years. We are doing a lot of innovative things to make meaningful progress towards our target.
One of the things I learned in my prior jobs and from watching Ajay is that unless you’re consciously working to transform your organisation, you’re falling behind. In my prior role in products, we worked hard to take our product development efforts to a higher level through an excellence programme, asking ‘how can we become better?’ We are trying now to do the same thing in our law and franchise teams. They have delivered well in the past, and we literally stand on the shoulders of giants, but there is so much more we can do to enable our teams to power the company’s future.
So, coming to this job was exciting because it was an opportunity to take on an internal transformational agenda.