An Open Letter to the CEO of Sprint Nextel

News item: “SPRINT NEXTEL yesterday reported a $29.45 billion fourth-quarter loss and said legions of subscribers continue to abandon its service, many because they can't pay their bills.”

Dan Hesse who took over from Gary Forsee in late 2007 as Sprint Nextel’s CEO has the unpleasant task of presenting more bad news to Wall Street, the media and his shareholders yesterday. Hesse, a veteran of the old (versus new) AT&T, like Forsee, has more than his work cut out for him. While he has announced a number of initiatives – such as consolidating the corporate headquarters in Kansas (currently there are two headquarters locations with one in Reston, Virginia), the turn-around is not yet apparent.

Some steps this management consultant would recommend for SPRINT include:

Stop the Bleeding

Sprint is losing customers due to poor customer service AND a push in the past to offer service to customer with poor credit histories. Retraining and shifting more resources to customer service is a “no brainer”. The issue of customers with poor credit is tougher. Tightening up their standards for new customers AND cracking down on delinquent accounts NOW is essential. Hesse must drive Sprint to take the hit now rather than drag it out over time.

New Products and Offers

Sprint needs to bring in customers and listen to them. They also need to bring in “front line” sales and customer service people and gather their ideas. These efforts should produce a snap shot of customer needs and issues. These then can be prioritized with product management “SWAT Teams” charged to develop new products and offers for maximum market impact.

Resources

The majority of resources should be focused on generating revenue. As such, a top to bottom assessment should be made of all functions, roles, processes and performance results. The goal is not lay-offs or even cost reductions but rather putting most of the resources in areas where they are generating revenues or improving customer satisfaction.

Cost Cutting

Similar to new products and offers, the ideas of the employees – at all levels and across all functions is essential. Everything must be done better, faster and in a totally results-driven manner. These ideas need to be quickly gathered through “SWAT Teams” and then brought to the leadership for real time decisions and action. If there are to be lay-offs and pay freezes or reductions – the actions should begin AT THE TOP, rather than in the ranks. Leadership by example is powerful and all too rare.

Speed

The larger organizations are, the longer time they take to make decisions and then to turn the decisions into actions. Steps must be taken to focus on speed – but not at the cost of quality. The speed to market, the speed to turn decisions into actions, the speed to improve financial and other performance results all must be driven home daily at every level in the organization. Sprint is a big company. Unless they become more nimble, they will be acquired or just die a slow corporate death.

Sprint Nextel’s Dan Hesse would be well served to abandon his “old” AT&T experience and move to embrace the many things that new technology start-ups do right. The old formulas of reorganization, lay-offs of workers and other corporate shell games will not help his company go from Wall Street’s outhouse to the penthouse any time soon.

George F. Franks, III is the President of Franks Consulting Group – a Bethesda, Maryland management consulting and leadership coaching practice. Franks Consulting Group is on the web at:
http://franksconsultinggroup.com
George can be contacted by e-mail at:
gfranks@franksconsultinggroup.com

The Myth of Consolidating "Headquarters"

The buzz in telecom, especially in the Washington, DC metro area, is about Sprint-Nextel closing their Reston, Virginia headquarters location and shifting the focus to Overland Park, Kansas. While Sprint-Nextel is as good a textbook case as any on how NOT to integrate two large companies following an acquisition, the issue of retaining two headquarters is of particular interest.

Why ONE headquarters location? Other than the symbolism and the potential cost savings, it is fascinating that a technology company refuses to embrace technology themselves. Some points that the current and previous Sprint-Nextel executives should have considered include:
- Executives should be out with customers, employees and investors, rather than sitting in any headquarters location.
- Technology allows for both audio and video conference calls from anywhere at anytime.
- The idea of a singe headquarters location is as archaic as castles, forts and bunkers.
- Many companies no longer have a single, sacred board room but rather meet at a location where board members can stay overnight (the outsourcing of board rooms).
- Staffs, like headquarters are now virtual. There is no reason why a CEO cannot be in Silicon Valley, the CFO in New York and the Sales and Marketing Chief be in London while their staffs, perhaps with the exception of the Executive Assistants could be anywhere globally if they are truly the best and the brightest.
- If and when “all hands” executive meetings are held, they are best held, like board meetings, at an outsourced location where all can be away from the disruptions of any office and focus on the tasks at hand.

If technology has freed executives and their staffs from being “hard wired” to their offices, it does indeed appear odd that executives still claim the need and benefits of being co-located at a “headquarters” facility.