Analyst Angle: Forces of Nature

Editor’s Note: Welcome to our Monday feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from Strategy Analytics’ Chris Ambrosio, M:Metrics’ Seamus McAteer and Current Analysis’ Peter Jarich.
Santa was good to several wireless executives this year-they are doing now more than just wireless. During the month of December, first Verizon announced that Denny Strigl, formerly CEO of Verizon Wireless, was now COO in charge of Verizon Wireless, Verizon Telecom, and Verizon Business. John Stratton, who was CMO for Verizon Wireless, had similarly expanded his portfolio to be now CMO for the entire Verizon Communications portfolio. Just a few weeks later, with the close of the AT&T’s acquisition of BellSouth, Ralph de la Vega, COO of Cingular, was promoted to Group President, Regional Wireline Properties, making him the master of the most local lines in the country.
All of these appointments are well deserved. From the early days of Bell Atlantic Mobile (BAM), Denny had a vision of creating a nationwide carrier that excelled in network performance. The first tag line I remember from BAM was “The Difference is in the Network”-as you can see things haven’t changed that much in the past 15 years. Through several acquisitions the small regional BAM made quite the bang as Verizon Wireless. What most people don’t realize the bang was much louder on the inside than the outside. Network quality, company performance, and execution at the acquired companies were not up to the exacting standards of what Denny was used to.
Quickly, quarterly reviews involving Area and Regional Presidents were expanded to incorporate the whole organization. For a full day every quarter, the 24 highest sales and marketing executives, with the assistance of just one aide, of the company were peppered by the company leadership as to why their area and region was performing well or not well, what the reasons were and how the company can perform better. A former Regional President explained to me that these top-level executives cram like college students for these quarterly reviews where literally a second “I don’t know” answer can cost them their job. Denny’s people are expected to be at the top of their game and the results show the wisdom of these exacting standards.
John Stratton transformed a previously understated and performance-driven Verizon Wireless into one of the leading marketers in the telecommunications industry. Under John’s leadership, stars like P. Diddy and Christina Aguilera have promoted Verizon Wireless’ products and signature products like the Chocolate have been signed. But what I would consider the true hallmark of a great CMO is that Verizon Wireless has both the leading unaided advertising recall rate in the industry but more importantly the leading unaided recall rate per dollar spent as well. He does not only get the message out, but does it cost efficiently.
Before Ralph de la Vega joined a decrepit wireless operator sometimes jokingly called “Bubba Wireless,” he had already quite the illustrious career as turnaround specialist behind him. First fixing BellSouth’s underperforming DSL business, and then taking over BellSouth’s Latin American organization. From 2001 to 2004 he turned BellSouth’s worst performing group into the company’s best performing group. Cingular at the time was, at best, an also-ran wireless carrier plagued by centralism that paralyzed the organization.
A good indicator for how much things went awry was that Cingular was regularly unable to deliver in time the necessary signage and documentation into stores for the promotions that the company was running in newspapers and on television. Under Ralph’s leadership, the organization was quickly decentralized with VP-GMs running each region, and new marketing talent was hired with Marc Lefar as CMO. Furthermore, Cingular put its money where its mouth is and spent significantly on improving its wireless network and was able to acquire AT&T Wireless, which did not live up to the same standards. Only one executive from AT&T Wireless survived the acquisition, the President of the Business Markets Group, Kent Mathy. The same high standards were and are being applied to their top regional managers, the VP-GMs. Performance was emphasized and judging from a quarterly press release congratulating a new VP-GM to his or her position, the tolerance for non-performance is low.
Why do I tell you all of this? Well, these guys, who used to run the fastest moving organization of their companies, are now in charge of the slowest moving organizations of the respective companies. Their employees and even more so competitors are in for a massive shock. New high standards and procedures that were developed and honed in the ultra-competitive wireless market will be unleashed on the workforce in a fashion that will create a culture shock, but one that is sorely needed. These executives will shake up their companies, figure out who can perform and who cannot, and create top-notch competitors out of these sleeping beauties that until now have largely played dead against the threat of the cable companies. The employees should take this as an opportunity to shine, and I mean really shine.
If convergence ever has a chance-and to be honest I am not perfectly sure it’s not a solution looking for a problem-Ralph and Denny can make it a reality, if necessary through their sheer force of will and drive. My recommendation to the cable companies would be to keep the warm clothes that have been so handy during the current ice storms close by. You will need them. Two more relentless forces of nature have been unleashed upon you.
Questions or comments about this column? Please e-mail Roger at [email protected] or RCR Wireless News at [email protected].