Editor’s Note: Each year RCR Wireless News chooses the person who has most impacted the wireless industry. Our choice for 2002 is Dennis Strigl, Verizon Wireless Inc.’s chief executive. Verizon, the nation’s largest carrier, is known as a conservative company, and that has served it well this year, especially in this downtrodden market. In an industry that often drowns in promising too much, Strigl has been wise to focus on core competencies. Strigl has guided Verizon with a steady hand, concentrating on the basics, like great network coverage, while cautiously rolling out third-generation services. Meanwhile, the carrier put significant money behind a wireless data marketing campaign to educate audiences about the promise of 3G. And Verizon should be commended for leading the fight to get re-auction pledges back from the government, a battle that helped a number of carriers.
BEDMINSTER, N.J.-Dennis “Denny” Strigl, president and chief executive officer of Verizon Wireless Inc., started out with his eye on the sky, but attained that goal in a way he could not have imagined when he sought his first job, as an airline pilot, in his hometown of Buffalo, N.Y.
Fresh out of college, the CEO, who retains a valid commercial pilot’s license, interviewed with the major airlines, including American and United. The first-year flight engineer’s salary was $350 per month and required 24-by-7 standby availability.
“I thought the telephone business was probably one of the least interesting professions. But before I took an airline job, a friend said `Why not try industry?”‘ Strigl said.
“I walked up and down Main Street in Buffalo, and I went into New York Telephone, and they said, `You can have a job for $650 a month as a communications consultant,’ a fancy name for a salesman in an industry that had nothing to sell because it was a monopoly. I was never very satisfied pretending to be a salesman, and the next step was to be a sales manager, which was a bit worse in some respects.”
The lawsuit to break up Ma Bell was under way when Strigl moved on to AT&T Corp.
“I ended up in a lot of crazy jobs related to the antitrust suit that I despised because I had to search through boxes of materials with things like old shoes and boots in them for information to send to the government,” Strigl said.
After about a year, AT&T transferred him to Wisconsin Telephone Co. as general manager of marketing and sales. Wireless telecommunications made its U.S. debut in Chicago in the fall of 1983, and by spring of the next year, Strigl became president of Ameritech Mobile Communications. Not only had he found the right fit for himself in telecommunications, but the lessons learned have shaped his management philosophy since then.
“I had a ball. It was fun, entrepreneurial, building from scratch. I had gone to Ameritech Mobile with the charge of marketing the service, but one of the real challenges was to make the system work. It had 17 cell sites, and the service didn’t work worth a damn,” he said.
As if foreshadowing Verizon’s “Can you hear me now?” advertising campaign, Strigl recalled, “I got a crash course in engineering. It’s funny. I used to drive the engineers nuts, driving up and down the streets of Chicago with them.”
Marketing a service no one understood was another major hurdle of the early, analog, monopoly cellular days.
“Educating potential customers about why this was worth having was one of the biggest challenges. By the way, the price was prohibitive, maybe $50 a month plus 50 cents a minute. A car-installed phone cost $3,000 and a Motorola brick phone, $4,000,” Strigl said.
“I went on talk shows. We ran full-page ads. We were the only player in Chicago for two years, and then Cellular One, a competitor, came in. There was twice as much advertising, prices dropped and cellular generated a lot more interest. Today, you don’t have to educate the public about what wireless is.”
Reseller distribution also was a challenge because virtually all sales came from “agents, aggressive entrepreneurs who thought they knew how to sell better than we did, and they might have,” Strigl said.
Today, a bit less than half of Verizon Wireless’ sales are through third-party channels like RadioShack Corp. and WorldCom Inc., which he said worked well until its bankruptcy and related problems emerged. Strigl characterized Verizon’s relationships with resellers today as good and said that both carriers and third-party wireless retailers have learned and improved over time.
When Strigl left Ameritech in 1986, the cellular operator had expanded outside Chicago into parts of Michigan, Wisconsin and Ohio. Beyond that, however, he expressed satisfaction in the fact that he knew the name of each of the carrier’s 300 employees.
“Verizon has 41,000 employees, and I’m very proud of all of them. The most important thing an executive can do is stay connected, and the last place an executive should be is behind a desk,” Strigl said.
“I spend a fair amount of time talking to employees, and each time we do operational reviews, I try to meet face-to-face with several hundred employees. For years, I have had an open-door policy, an obligation of constructive dissent. I have a habit of asking what doesn’t work. My hope is I have gotten a reputation for paying attention to what employees say.”
Strigl’s interactive approach extends beyond the workplace, said Kim Wells, executive director of the Corporate Alliance to End Partner Violence, Bloomington, Ill. Under his aegis, Verizon has undertaken a significant role in this business-backed nonprofit organization, which educates companies about the costs of domestic violence, ways to deal with it and how to make it socially unacceptable, she said.
“We had a meeting last June hosted by the Milwaukee Chamber of Commerce. Without fanfare, and I don’t know if he knew anyone was watching, he came into the room before the event and went from provider to provider (of victim’s services) asking what they do,” Wells said.
“It was really refreshing to see this CEO of a great big company talking not to his peers or looking around for which business executive to talk to, but deciding the most important people there were the (domestic violence) survivors and the service providers.”
Across the board, Verizon Wireless has implemented a merit system that rewards staff for performance. The company also “does very little in the way of outside hiring,” instead offering development and training programs and filling about 90 percent of its jobs via promotions of current employees, Strigl said.
“He’s developed a consistent vision. He’s a great leader, and he has a great team around him. He has so much enthusiasm he gets people excited about the business, and that’s especially important when you look at all the uncertainty in the industry today,” said Ivan Seidenberg, president and chief executive officer of Verizon Communications Inc., who has known Strigl for many years.
“Besides being the premier wireless executive on the planet, Denny has done an outstanding job, proving himself year after year. I’ve always marveled at what he’s done,”
After leaving Ameritech in the mid-1980s, Strigl said he made his last detour outside the cellular business, moving to New Jersey to manage Applied Data Research, a software company, which “competed head-to-head with IBM” and was sold to Computer Associates.
“There was an opening at Bell Atlantic Mobile in 1991, and I couldn’t wait to get back into wireless,” Strigl said.
“In the early days, we had pockets of coverage. I learned early on that customers want high-quality calls, they want to keep the calls and not get dropped, they want wide area coverage and, if you did that for a fair price, even better,” Strigl said.
In 1992, Strigl oversaw Bell Atlantic Mobile’s merger with Metro Mobile CTS, which ha
d coverage in the Carolinas, Arizona, New Mexico, Texas and Connecticut.
“We decided that still wasn’t broad en
ough coverage, so then we merged with Nynex in 1995,” said Strigl, who became CEO of the combined company.
“We had a `big foot’ strategy, and now our East Coast coverage was pretty good, but coverage still wasn’t good enough. At that time, Cellular One was consolidating the industry in its own way, but it lacked control over its entities. Our challenge was to get more and more licenses.”
In 1996, Bell Atlantic Nynex Mobile partnered with AirTouch and U S West, and several years later acquired GTE, so that, “finally, in 2002, we could say we had nationwide coverage,” he said.
“With mergers, it can be difficult to get everyone on the same page because there can be different cultures, operating systems and philosophies. But we’ve learned over time and many, many mergers that we must march to the same beat. What is it? To give customers what they want.
“We’ve analyzed the best of what each company has to offer, and it’s been a great educational process because there are many things they (the acquired and partnering companies) do well. The personality of Verizon Wireless evolved as an amalgamation of these that is best represented by our `Worry Free Guarantee.”
That comprises several basic tenets, Strigl said. The first is a nationwide network, although Verizon still is working to fill in some gaps in less populous areas. Responding to customer complaints, the carrier instituted a 15-day full money back guarantee, even though it can’t resell the used phones. Likewise, it implemented flexibility for consumers to change price plans. Finding that consumers like to change phones every two years on average, Verizon gives them a $100 credit and a new handset every other year.
“When a customer calls us, their problem becomes our problem, and we stay with it until it’s solved. We also pay for performance, and the result is a very focused employee group from top to bottom,” Strigl said.
“As an industry, with increased competition and the speed at which we all move, we need to focus on the service provided. The complaints lodged against our industry are significant, they are real and we need to fix them.”
Consumers and voice communications are the overwhelming mainstay of Verizon Wireless’ business today, although the carrier is taking steps into data with short message service and BREW.
“As to where the industry is going with data, it’s important to keep in perspective that voice is king. We (Verizon) will get more than 95 percent of our revenues this year from voice. There is a tendency to over-hype what isn’t here and to under-perform what is here,” Strigl said.
“The consumer is the major segment, but we can do a much better job of serving the business customer. The great challenge is to give them what they need. I don’t know that we (at Verizon Wireless) have focused enough on the enterprise customer. As we do focus on them and they increase their spending, we hope for increased ARPU (average revenue per unit).”
Convincing Wall Street analysts that a focus on increased ARPU and earnings merits plaudits rather than demerits is another important goal for Verizon and other wireless operators, Strigl said.
“When you focus on earnings, growth suffers, and vice versa. But the message is important because sooner rather than later, it is important to reach cash flow positive (status) so you can invest in your network,” he said.
Strigl, a board member and former chairman of the Cellular Telecommunications & Internet Association, praised Tom Wheeler, saying that his “focused and energetic leadership did a lot for the industry and the association.
“Where does the CTIA go from here? … Any of us can be replaced, and we need to remember that.”
Besides responding concretely to consumer complaints about service and educating Wall Street about the value of ARPU, Strigl said he believes CTIA and the wireless industry need to train their sites on “regulatory creep” at the federal and state levels.
“Governments have looked at this industry as a great success story, and the level of taxation states charge on wireless is about 20-to-21 percent. Some of our bills have three or four extra lines to explain this. Taxes have gone up nearly as much as prices have gone down,” he said.
In fact, representatives of the wireless industry, including Annabelle Canning, director of tax policy for Verizon Wireless, met with the National Conference of State Legislatures in mid-December to lobby for replacement of telecommunications-specific taxes by general business taxes, which apply to all companies.
