Sunday Interview with TSYS CEO Phil Tomlinson

chwilliams@ledger-enquirer.comMay 17, 2014 

Phil Tomlinson came out of Columbus public housing in the mid-1960s.

Today, he is 67 and near the end of his career as chairman and CEO of TSYS, a global credit card processing company that employs 9,900 worldwide and is headquartered on the banks of the Chattahoochee River.

He sat down with Ledger-Enquirer reporter Chuck Williams recently to talk about his personal and professional journey.

Here are excerpts of the interview, with some of the questions edited for length and the order of some of the questions rearranged for clarity.

What is the state of the company?

Things are going great at TSYS. ... We had a good first quarter. 2013 was a very good year for us. We just completed our annual shareholders meeting to a nice crowd. I think the message was well received ... We are continuing to grow. We have a lot of business lined up in a pipeline of new business to be added. This week, we are adding Bank of Montreal, one of the first largest banks in Canada. We are excited about that.

We are like anyone else, we would like for the economy to be a little stronger. We are continuing to hire. Last I looked, we had 400 open jobs.

Is that in Columbus or across the board?

That is across the board.

How many people do y'all employ in Columbus?

About 4,500.

Total company?

About 9,900.

Where are some of the places these people are working?

We have probably 250 in Alpharetta; another 300-400 in Kennesaw; probably 2,000 in Europe. We got 300 people in Cyprus, of all places. A hundred in Moscow. We have 700, 800 in Tempe, Ariz. We have call centers in Sudbury, Canada, which is a suburb of Toronto; we have got one in South Africa. We got one in the Netherlands. And we got a big one in the UK. We are scattered around pretty good.

Truly a global company?

Absolutely.

Probably the most global company in Columbus?

Probably the most diverse global company. Aflac is certainly a much larger company. They are primarily in the U.S. and Japan. And we have just announced we are exiting Japan. And we are exiting Japan because it has just not worked out very well for us. We have been there 14 years. We have signed a little business, but not a lot. Certainly not enough for us to continue to have a presence there. I think it was a wise decision.

If you run into someone who does not know what TSYS is, how do you explain this company to them?

I do run into that all the time with people that I meet who are not in this business. I basically tell them that we are the largest global credit card processing company in the world. Chances are one or two or maybe even more of those credit cards in your pocket are processed by us. We send you the bill every month. We do the authorizations for you. We are the guys that provide the systems for the banks when you have a customer-service issue or you have a question about your account.

And we are located, in many ways, in a small Southern town. We have been told for years you can not have a high-tech company and be located in Columbus, Ga., that you got to be in Atlanta, you got to be in California, you got to be in New York. You got to be in a much more metropolitan area. I think we have proved that is just not true. We have been able to recruit people, we have been able to acquire companies where people want to move to Columbus. Columbus is a much easier sell than it was 20 years ago. There is just so much more going on. It is a great city to live in, I think.

This is your hometown, right?

I was away from Columbus for many years. I was living in Atlanta, working for GE in 1974. They were trying to get me to make a move to Stamford, Conn. My wife was pregnant with our third daughter, and we just decided we wanted to raise our children in a town like Columbus. About that time, CB&T -- there was no Synovus back in those days ... I will never forget CB&T was a $187 million asset bank. Today, they are pushing $30 billion. I came down and interviewed, liked what I heard, liked the people and decided to make the change and move to Columbus. One of the best things that ever happened to us.

Why did CB&T decide it was smarter to process its own credit cards than outsource that?

When you go back to 1966 -- which was well before my time -- when CB&T got their first computer. But they really got into the card business in 1959. But it was all done manually with posting machines. In '66, there wasn't a lot of software, there wasn't a lot of people in the business. CB&T was an absolute pioneer in the credit card business. You would still have a lot of people around Columbus that would remember the CB&T charge account. There was really no place to go process and it sort of had to be invented here.

It was invented and built -- by today's standards it would be incredibly primitive, but it worked and it worked well back then. We were actually selling that software to primarily small banks around the Southeast. And I will never forget the last one we sold, we sold for $25,000 to a bank in Mississippi. When the oil crisis happened and a lot of technology people moved to Saudi Arabia and places like that, and the guy from Mississippi called me one day and said, "Phil, we can't get this software to run. Can you get us some help over here?" His name was Bill Steel, I will never forget it. I said, "Bill, we will do one better than that. Let us do your processing for you and we'll just give you a refund on the software." And amazingly, he did that. Today, that bank is TrustMark Bank in Mississippi, which is the largest bank in Mississippi and still a grand customer of TSYS.

Wow.

Our very first customer was Landmark Union Trust in St. Petersburg, Fla. Again, they came to Columbus to acquire the software to be able to process themselves. They were being processed by a bank down in Florida.

I wasn't at the dinner, but Lynn Page was there, and Butch McVay was there. I think it came up accidently when the guy from Landmark, a fellow by the name of David Myer, who is still a good friend of ours, told us what he was paying this bank to process his company. It was all offline and we had the neatest, latest, greatest online system. One of the guys made the comment, "We will put you online and do it for half that price."

Now, two or three weeks later, the guy called back and said, "Was that just bravado or were you serious?" We had to huddle up. We decided we were serious about it. At that point, CB&T did not have an online remote terminal anywhere in the company.

... I will never forget, we called Southern Bell -- that was before the AT&T breakup -- and said we would like to run a data line down to St. Petersburg and hook it up to a modem. A modem in your house today probably weighs 6 ounces today. These things weighed 50-60 pounds at the time.

Southern Bell actually said, "We don't know. We will have to get back with you." They did get back and said they could order a data line and they thought it would work. We actually took a terminal down there, hooked it up and it worked. We let those guys change some addresses and credit lines. They were really enamored with it and we wound up selling them. And that was our very first customer.

They were three times the size of CB&T's credit card portfolio at that time. It was a big deal for us. We had never been in the processing business and didn't know how to do it. Just sort of invented it as we went along.

You are talking about 1975, '76, right?

Yeah.

There wasn't a four-lane road in or out of this town. ...

I remember it well.

How do you become a technology pioneer in that environment, in this community at that time?

I think the fact of the matter is we had invented a pretty good piece of software that a lot of people envied and thought was pretty neat. It was better than what the average bank -- and even much larger banks -- had.

We didn't need roads. We needed technology. We needed data lines. And we needed people who knew how to deal with that technology. Could we have kept on growing the way we have grown if we had not done some unique things to recruit people, had the town not changed the way it was perceived? ...

By all rights, should TSYS be headquartered in Columbus, Ga.?

Probably not under conventional wisdom. Columbus has always been sort of an amazing city -- I will promise you that you will not find another city the size of Columbus, Ga., anywhere in the world that has four public companies operating in it. In Columbus, Ga., you got TSYS, Aflac, Synovus and Carmike.

Where would Columbus be without TSYS and Aflac?

Columbus would survive. The difference is when you have companies the size of these two companies, it does have a major economic impact. I will never forget 15 years ago, when I was asked to go speak to the homebuilders. They had a really big crowd. The guy who was in charge said, "Phil, this is the biggest group we have had in years." I said, "Why is that?" He said, "They wanted to hear what you got to say." I said, "I just can't believe they care that much about the credit card business." He said, "Phil, they probably don't even know what you do. But they do know you employ a lot of people and those people are buying houses, they are buying lawn mowers, they are buying automobiles." That is when it kind of hit me that a larger company can make an economic impact on a city.

Is that a unique part of this city?

I think it is part of the uniqueness. The fact that there is a can-do attitude around here. When I look at how much this city has changed over the last 20 or 30 years. I grew up out in south Columbus.

Where?

I grew up in Baker Village -- 35-C Baker Village, as a matter of fact. It is amazing what addresses you can remember and what addresses you can't remember.

So, you are a Baker High graduate?

I am. Baker High, 1964.

You said 35-C Baker Village. How far is it from there to here?

Physically? It is 5 or 6 miles, but it's a long ways, and frankly had it not been for a lot of good people that helped me when I needed help. ... I feel very humble to be in the job that I'm in today.

It never ceases to amaze me when I drive over that bridge every morning coming to work and look at that massive parking lot and that garage that holds 700 cars. It's a lot of pressure ... Those people are coming to work thinking that I really know what I'm doing and I'm going to look out for them and I'm going to make the hard decisions, I'm going to make the good decisions, and fortunately we have made a lot more good decisions than we have bad ones.

What values did you learn as a kid growing up in public housing that you use today?

I think the values that I learned is that most people -- whether they are rich or poor -- will do good, they want to do the right thing. Most people have pretty high levels of integrity, honesty. They don't want to treat people badly. They typically like to treat people the way they want to get treated...

Now, I have a lot of people that I run into that think I was born with a silver spoon in my mouth just because I've got a great job and a great company. I've been lucky in a lot of ways, but the truth is, I've had a lot of people to pat me on the back just when I needed it. I had a lot of people encourage me just the day I needed it, and I'm so thankful for those folks.

In your leadership role now, having been in the public school system, having been raised without a silver spoon in your mouth, are you a example of what can happen in this community?

Absolutely, and I have seen it so many times here. We've got people -- I don't know where they are today, but they're in Brazil, China or they are in Germany or the UK -- that were born and raised here that not only have never been to one of those countries, they've never been on an airplane before.

And yet they get on the airplanes, they go, they do great work and it is pretty interesting. One of the great compliments we get from our customers -- from the U.S. to Canada, Mexico, all over the world -- is they get treated with respect, they get treated with great respect. People work hard here. People want to do good. They want to make the customer happy, and we feel bad when we make a mistake. You don't get that everywhere.

I think Columbus has this fantastic work ethic. When I say Columbus, I'm talking about this whole region, Columbus, Phenix City, the Columbus region.

Talk about the philanthropic arms of this community. Is that philanthropic reach deeper than many communities our size?

I don't think there's any question about that. I think Columbus and this region is one of the most generous places that I have ever seen. I'm fortunate. I get to talk to people who live in other cities and when you talk to people in Macon, Savannah, even Atlanta, I think they are very impressed when people come together on the right project we'll make happen in Columbus, Ga.

Just look around you. When you look at the RiverWalk, the downtown area, the schools we have built, this campus -- that's not philanthropic, but it's part of the process -- the RiverCenter.

I'm on the board of the Georgia Department of Economic Development and I've been trying to get these folks -- they are all over the state of Georgia -- to come to Columbus now for three or four years. We've got members on that board who have never been to Columbus -- don't even know where it's at -- which astounds me, but what can I say? They're coming on May 20 and 21, and the theme of this meeting is "Film and Music."

We've got a day and a half planned for them that's just going to blow them away. We're going to get them on the river, we've got a big social event at the RiverCenter. Everybody you talk to who sees the RiverCenter says it is as fine a performing arts center as there is in America.

Then, we're going to take them from there downtown to eat, where they've got a lot of music -- there happens to be a lot of great musicians in town that week. The only thing we're missing is we don't have a movie being filmed here at this point.

Would you have done that 25 years ago?

Lord, no. Where would I take them 25 years ago? The only place to take anybody 25 years ago was the Goetchius House, and I've taken a thousand people there over the years, but now you have some great choices.

Talk about education in Columbus?

I think it all comes down to education and having jobs available. I've heard for years we've had a "brain drain." We have worked very hard to make sure that we keep as many smart people as we can in Columbus. We have a very close relationship with CSU, and our last hiring class we hired 50 people; 37 were CSU graduates. The rest were from you name it. Most of the schools in the SEC, Alabama, A&M, just all over.

Basically first jobs?

Yes, these would all be first jobs. About twice a year we hire a group of 50 straight out of college.

These are software techs.

They could be. You don't have to be a software tech. We'll teach you here. We love to get our hands on music majors, biology majors. They make great technicians.

Really?

Oh, yeah. I'm not a techie, so I can't explain it to you, but there's something about the organization of music and science and technology that all goes together. If your mind works that way, it's almost interchangeable.

That's interesting.

We have a lot of technology people who are music majors.

Is it easier now to hire somebody who's not a Columbus person?

It is easier. It's easier to recruit and we recruit on a national basis. We just brought a guy here from England. He and his wife have twin boys. I think he's thrilled with the lifestyle here and what we have in Columbus. The truth is, if you want to go see a Major League Baseball game, you go a hour and a half. That's less of a commute than may folks in Atlanta have, so ....

I asked that question recently to Aflac's Dan Amos. He said they were recruiting upper-level people who wouldn't have talked to them 10 years ago -- out of San Francisco and places like that.

I think he's right. I do think the world has changed a bit, too. To a lot of people, big cities don't have nearly the attraction that they use to have. What we recruit for is somebody who has the talent. When we're recruiting for Columbus, Ga., somebody who has the talent and somebody who wants to live in a town like Columbus.

If you really want to work for us, and you want to be in London and you qualify for that job, we've got an office in London. If you really want to work for us and you want to be in Arizona, we've got 800 people in Arizona.

Are you having to pay those people more now than you did 10 or 15 years ago?

In Columbus?

Yes?

Absolutely.

Why? Talk about that. I know that one of the criticisms early on was that a TSYS employee was not making what they would be making in a similar job in Atlanta.

I think you can line them up and there won't be a dime's worth of difference anymore. And that just changed throughout the years.

Why?

I think what we did initially was we recruited strictly from Columbus -- this was years ago -- and paid whatever the going rate was in Columbus. Now, this recruiting from all over the world -- when we assign a value to a job, we take these national surveys and that's the value we assign. Not a Columbus, Ga. survey, not an Atlanta survey, but a national survey. It's sort of an average between what you pay somebody in New York or Columbus or Atlanta or Austin, Texas.

Those are all places you are competing against for this talent.

Absolutely.

What impact has that had on the wage scale for other jobs in Columbus?

I think it's probably helped it. I couldn't say for sure, but I would just kind of generally think that's got to be helpful.

How do you handle millions of credit cards and billions of transactions? How do you handle that with a minimal error rate?

You have to strive for a zero error rate because one little error could mean tens of thousands of transactions or millions of transactions.

We have built systems over the years that are tested, they are verified that we know they work, they balance to the penny. Last year there were trillions of dollars that we settled and we balanced to the penny every day. We average about $7 or $8 billion a night. We balance it to the penny. If we're one penny off, we get excited. We've got people who know what they are doing. We've got people who care, and I can assure you that when I go home at night I lay my head on my pillow and I'm not having nightmares about our operations that run 24-7 all over the world. We've got the right people and we've got the right systems and the right controls and it works.

How difficult is it today to protect peoples' personal information when you have hackers?

It's more difficult today than it's ever been in history. We spend millions of dollars on an annual basis protecting our client's information and our information. We have people trying to hack us everyday. Fortunately, nobody has ever made it through the door. In this business, you never say never, but we're doing everything that we know that is humanly possible to prevent that, and our track record is pretty good. I think people in today's world have got to be more responsible with their own financial or personal information. I think you've got to be more sensitive about it. I think you've go to be more sensitive about who you give that data to, because there's just a lot of people out there today that would like to have that information and would like to try and hurt you financially, or hurt these big organizations just like this tragedy that happened with Target. Target is a wonderful customer of ours. They are a top 10 customer, and they are as good of people as you ever want to do business with. They are based out of Minneapolis. Just great folks to have as clients, and we are just sick over what's happened to them.

They lost a lot of their customers' personal information?

They did. And I promise you, I go to Target every chance I get.

That was nothing that involved y'all, right?

Absolutely nothing that involved us.

I noticed that you are doing some work on the Mott House. The Mott House is probably one of the most significant historical structures in this community. Right?

Absolutely, and one of the oldest.

What are you doing?

The site that we're on, which is 49 acres downtown on the river, it had three textile mills that were built in the 1800s that were setting on this property that had been abandoned for years. We actually looked at them to see if there was a way to save them. The historic architects came in and looked at it and said they were just deteriorated too much.

So, when we started taking those mills down, brick by brick, we found that the Mott House was encapsulated into one of those mills. Rick Ussery, who was CEO at the time, and I didn't know it was here. Apparently some people did know it but not anybody that was working on getting this property abated, if you will. And so we found the history of that house -- built in 1839.

Apparently there were about 10 of them on this riverbank right along where this campus sits. If you read the history of it, they called it Golden Row. People liked to build along the river because it was a lot cooler in the summertime.

It's a 7,500 square foot house, three stories, and it had certainly no modern amenities to speak of. ... We're going to move our boardroom over there and we are going to have seven or eight big meeting rooms that we can use. ... We're spending about $7 million on it, so it's going to be very upscale. It will be the most high-tech old house in the world, I promise you. It's going to have more internet capacity and technology than any building that size we've ever built.

You've had a view of the whitewater course and the construction. What do you think of the finished product?

I love it. I think it's one of the neatest things we've ever done in this community. I think it will generate much more excitement than it has. Last year we were just sort of,

I guess for a lack of a better term, we gave it a test run. This year I think it's going to be big and I think the word is starting to get out. I can remember this winter talking to people in Atlanta and they didn't know we had a whitewater course. Word is getting out.

That's one reason I wanted the Georgia Board of Economic Development to come. I want them to see it, touch it, and feel it. John Turner is going to give a presentation to this group about how it got started and the vision that made it happen. So, we're very excited about it.

Have you gone down it?

I have.

What did you think?

I went down it the same day you did. I was behind you when you jumped out.

No, I fell out. It has created an energy that wasn't here. Right?

I think it has created a new level of energy and I think it's going to be good. The younger crowd that is always looking for something exciting to do. The thing that I've seen since the whitewater course came online is the fact that every weekend there's one or two big runs, or there's one or two biking events. ... There's more of that going on than I have ever seen in this area. You see people out running, biking at a much higher level than I've ever seen.

A lot of those people come out of the TSYS complex.

I know they do. When you pull in this place you'll see bikes hanging on the back of pickup trucks and cars.

A lot of your people run during lunch.

And we've got a gym downstairs that they use regularly, but you see a lot of people that run and ride. I wish I could really get into that. Maybe I will one of these days.

How's your health?

My health is good. I had some issues in the fourth quarter of last year. I had a paralysed right vocal cord. I know one thing, if you're use to talking a lot like I am, and you can't talk, it really puts a lot of stress on you. I probably sent out about a half-million emails during that period. It's really one of the more frustrating things I've ever had.

How does it happen?

They don't know. I went to the Emory Voice Center and they are the ones that took a video camera and put it down my throat and told me what it was. And then they sent me to a doctor who injected collagen into the muscle that holds that vocal cord up. About 30 days later, I'm fine.

Did you just wake up one morning and couldn't talk?

Pretty much. I had had a sore throat. Emory told me something that I thought was very interesting. I asked how do you get this and the doctor said we don't really know. She said, 'Do you travel internationally?' And I said, 'Yes.' She said we see a lot of it from exchange students, from people who travel internationally and you probably picked up a bug somewhere and it just happens and we can't tell you why it happens, but we can cure it, which is a good thing.

Now you're fine?

Now, I'm fine. I'm sure a lot of people want me to get it again -- quiet me down.

How much longer are you going to continue to do this?

I've asked friends of mine who have retired when do you know when you are supposed to retire, and I can't ever get a good answer out of anybody. I'm having fun. I love the people here, I love this business. I know you have to be realistic about these things and I certainly haven't made any decisions regarding that subject as we sit here, but I am getting to the age where I have to think about it.

So, it's not imminent?

No. Certainly something could happen, health wise or I could get hit by a truck, who knows. We've got a great team here. Even when I lost my voice, Troy (Woods), Neil Pruitt and Ken Tye and all these guys stepped in and we didn't miss a beat.

I think that's a real test of a great company when someone can have a problem, whether it be illness or something personal and they are taken out of the picture for a period of time whether it be a month or six months, and nothing changes. Nothing slows down; it just keeps on churning, it keeps grinding.

What does this company look like when you're gone?

I think in many ways this company will be the same. I think a company always takes on a little bit of the personality of the CEO, which you want to be a good thing. You want it to be positive, you want it to be customer centric, you want it to be people centric. You want it to be a fun, good place to work. What I look for in the next generation is people who can carry on that culture. I think we have a very positive people culture here that we've worked very hard on over the years to make it good to start with, and then enhance it every chance we get.

If Columbus, Ga., was a stock, would you be buying it?

We're buying it everyday, cause we're spending money here everyday. We're invested in the Mott House right now. We've got $150-$200 million invested in this building. We've got over 2 million square feet of space in Columbus, Ga. -- and we're full. There's two big data center operations, the call center, another big building out by the North Center. This is a 650,000 square foot building we're sitting in.

That's the equivalent of two Bibb Mills.

Yeah.

Did this replace the mill?

Yes, absolutely. You could look at it that way. It replaced a mill and I think of what I've heard of Bibb Mill, they had a lot of very positive things in their day. The world had changed but they were worried about their employees, trying to take care of them. It's a totally different business and different time. They were way ahead of themselves in a lot of ways; they were ahead of the market.

What are you most proud of?

I'm most proud that we've been able to build this company in Columbus, Ga. We've been able to do it with integrity. We have a great reputation in our industry. We've got good, solid quality people who care. This place is like family to me. I can't help but be that way. I get emotional when I think about TSYS. It's just not a job to me. It is a family.

Did the spin off from Synovus come at the right time?

Absolutely did. I said had it not happened, one, the fact that we wanted to go international in a big way; two, we were looking to do acquisitions; and, three, the bank has always been a great bank and we were sort of, what I used to call, the "sizzle on the steak."

We made it different. They were not Southern Regional Banking Company. They were a Southern Regional Banking Company that had this high-flying processing company that they owned,.

... But the timing was good. Probably had that not happened, TSYS might not have survived. It might have been one of those things, I've often thought about whether they would have had to sell us back in the day when they were raising capital instead of borrowing it. If they would had sold TSYS, who knows?

Do you ever reflect about where you grew up, how you were raised, and where you are now?

I do on a regular basis. You may find this interesting, when I do retire I'm going to write a book. I'm not going to write a book for sale. I'm writing a book for my family and for my grandchildren and their children, and to help me remember the past and also help them.

Also, there's a great story in there. With a great attitude and a great work ethic, you can do just about anything. That's the story or that legacy is what I'd like for my children to feel in their children as it goes down the line.

Your children, your grandchildren and your great-grandchildren will never know the poverty you came out of. They will likely never live in public housing living. How do you communicate that story?

I don't know that you can ever communicate it in total, but there were a lot of good things back in those days -- very positive things. Things that I learned -- the hard way, if you will. My very first job was the Piggly Wiggly at Baker Village. I was a grocery bagger and the guy that restocked the shelves. I learned a lot there. I learned a lot about people -- good and bad. I learned who the big tippers were.

What did your folks do?

My father was a barber. My mother was a homemaker. She died when I was 12. We lived in Central Florida, and we moved back to Columbus in between the sixth and seventh grade. He raised us.

How many?

Three boys. And then he passed away probably about 20 days after I graduated from high school. And then me and my two younger brothers -- one was 16, one was 14 -- rented a house and I raised them. I could spend a week telling you stories about an 18-year-old trying to raise two teenage boys. That will be in the book, too.

There are some stories there I'm sure my brothers wish I would forget. Fortunately no one got into trouble. They all wound up as good citizens. They do a good job. They have nice families, good kids. It's pretty amazing really.

Do you wish your dad could see you today?

Absolutely. I wish my mother and daddy could see all this today. That's one thing I do regret. I have some regrets about that.

Do you think they would be surprised?

I don't know. Again, because I was so young when they passed away.

Obviously your dad had a good work ethic.

Absolutely.

Being a barber is a tough job?

Particularly back in those days. It was really tough back in those days. We all came out of it with good character, with honesty, strong face. I do believe that old adage that a lot of your characteristics are built in your first few years, because my younger brother, I don't know if he really remembers my mother at all.

What did your mother pass away from?

She passed away with bronchial pneumonia, which was very common back then.

What age?

Late 40s. Very young.

And your dad?

A variety of things. I think more from a broken heart than anything. He never did recover from my mother passing away. He just never recovered from it.

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