Sprint CEO focuses on execution

It’s not easy when your company is a distant third in any industry. In fact, many experts believe you have to be in the top two spots — Coke and Pepsi, UPS and FedEx, Home Depot and Lowe’s — to flourish over the long haul.

Dan Hesse

Dan Hesse

It’s also not easy when you have to write off the entire value of a blockbuster merger. Even by today’s Great Recession standards, a $30 billion write-down is a big blemish on your books.

But Sprint Nextel CEO Dan Hesse has had to deal with both challenges since taking the reins two years ago.

With 48 million cellphone customers, Sprint has a mountain to climb to make up ground against Verizon (91 million) and AT&T (85 million). And Hesse has to try to do that even though Sprint is not in the financial position to spend billions of dollars on ad campaigns like his two major rivals have.

Still, given the tough hand he’s been dealt, Hesse seems to have a well-defined strategy he’s in the process of executing.

I talked to Hesse, 56, last week when he was in town to speak at a health care IT conference.

Hesse was not leading Sprint when it acquired Nextel in 2005. But, in hindsight, he acknowledged it would have been better if the deal had not been forged. Most of the company’s customer losses have been on the Nextel side of the business, with millions of consumers abandoning Nextel’s push-to-talk technology each year.

Improving customer satisfaction, as well as Sprint’s brand image and cash flow, is Hesse’s mantra. To do that, he said it’s critical to clearly communicate those priorities with the troops.

“People will do, and items will improve, if it’s what the CEO checks on,” Hesse said.

So every Monday, he meets with 15 top execs to go over the telling numbers on each priority. Unlike many CEOs, Hesse does not have a chief operating officer, so he climbs into the figures himself — not too taxing for an MIT grad.

“I’m not a 50,000-foot CEO,” Hesse said. “I’m often referred to as a player-coach.”

The player-coach, even one with an MIT and Cornell pedigree, stresses simplicity when trying to improve customer satisfaction and the bottom line.

For example, a $99 “Simply Everything” plan covering all cellphone expenses substantially reduced customer inquiries to call centers. So did investing in the network to reduce dropped calls. Fewer complaints meant 30 call centers could be closed, which cut costs and built up cash flow.

Sprint has bet more than $8 billion on a much-advertised 4G network, which Hesse touts as transmitting more data at much faster speeds than his competitors. He said his company has a considerable head start on its rivals — currently operating in the 3G realm — and needs to make the most out of it before they build out their own faster networks.

Since wireless is a fast-growing industry in both consumer and business segments, Hesse does not believe he has to overtake the top two, which is unlikely anyway.

“I believe being No. 3 is fine, but we need to be a strong No. 3,” Hesse said.

That should be a little easier now that some of the heavy Nextel lifting is behind him.

Next Tuesday: AT&T Mobility CEO Ralph de la Vega.

For instant updates, follow me on Twitter.

8 comments Add your comment

Formul8or

March 9th, 2010
10:24 am

Sprint is definitely taking a different strategy I think aimed at a younger crowd. They make creative ‘hip’ commercials and heavily advertise in the video game industry which continues to climb each year and makes more money than any segment of entertainment.

Bobby1874

March 9th, 2010
11:41 am

Some attention to the coverage on the Iden network (Signal Strength) would go a long way to keeping subscribers. Following Nextel’s rebanding and financial issues and the lack of expansion in adding new sites can you hear me now became the common phrase of users on the iden network. The itroduction of the 8350i black berry with direct connect was a positive move for Iden users however it is time to address the coverage issues. Since the iden network is relied on by public safety, government and critical industry the reliability and coverage should mirror that as its priority. Customer service is nice but a working phone is better.

charles baker

March 14th, 2010
11:39 am

I am the owner of a Sprint indirect retail store and repair center. This time last year I operated 2 stores. I am a Boomer and come from an era of “Customer Service” as the norm. We do everything possible to satisify the customer, sometimes at a $$ loss.
Sprint corporate asked that we open other locations. However, when I asked if we would receive any help or co-op the answer was NO. The killer was when I was told NO service and repair, just retail. Service and repair drives business to the location and is important to the customer. The closest repair store in this particular case was 19 miles away. Where is the incentative or Sprint CUSTOMER SERVICE?? I didn’t open the location. Investing thousands of dollars in this ecomomy in a location where my customers have to drive past my store to get to a repair center isn’ t possible. Customer Service may be the CEO’s mantra, but it is apparent to this store owner that the captains in the field are singing a different song. Believe me, I have tried many times, contacting Sprint decision makers. It’s very frustrating, knowing you can make a difference (see I told you I was a Boomer) and not being able to. That’s why I’m responding to your article. This is something I have never done before, but since I can’t get to Hesse. If you have his email, maybe you could forward this. Don’t bother with Dan@sprint.com #3 is not OK for customer service.
Thanks
Charles

jgamble

March 15th, 2010
1:57 pm

I hate everything customer service (I use that loosely) about this company. And the nextel side is the worst. And when you complain via the email no response I am very surprised that this company is still allowed to be working.

Cathy

April 12th, 2010
10:57 am

I think Sprint customer service is excellent. I couldn’t say that a few years ago, but it is now. They have replaced three phones for my family in the past few months, because the phones themselves had problems. Our closest service center is 80 miles away, so Sprint simply sent us a new phone UPS, delivered in 2 days!! I have noticed a definite difference the the sales help in the Sprint stores too. I do feel like they are on my side. They have certainly earned my loyalty, with their new customer service. Reception is still spotty rural areas, but not bad enough to make me want to switch. And I always have reception if I’m in a highly populated area. If they continue with the great customer service and can expand their coverage, they should do just fine!! Thank you Dan Hesse.

Brian Rudolph

May 12th, 2010
6:42 am

SPRINT CUSTOMER SERVICE IS AWFUL
THEN NEVER REPLACE PHONES FOR A BUSINESS IN A TIMELY FASHION
THEY TURNED OFF OUR PHONES FOR MY COMPLAINTS AND CREATED A UNREAL FRAUD CLAIM ON MY ACCOUNT SO I COULD NOT PORT OUT MY NUMBERS, YET NO FRAUD DEPT. HAS EVEN CONTACTED US. THIS ALL THE WORK BEHIND THEIR SR. LEGAL REP. LAURIE A PUTTHOFF WHO BREAKS ALL LEGAL CONSIDERATIONS OF OPERATIONS. SHE WILL NOT PROVIDE A COPY OF MY CONTRACT OR TALK ABOUT MY BILL OR LET ANYONE ELSE AT SPRINT GIVE ME MY NUMBER OR BILL OR CONTRACT, DUE TO A FAKE FRAUD CLAIM SHE MADE. REAL CLASSY SPRINT!!!!!

Dena McCloskey

July 30th, 2010
6:20 pm

I beg for the CEO of Sprint to contact me about concerns I have with my Sprint Service. You can find my number in your database. Lets see if service is a concern of yours because I am getting NO WHERE with your customer service “team”.

Steve Ely

September 16th, 2010
5:18 pm

Sprint service is abyssmal at best. I was just told that they canceled the ability to use a Blackberry as a modem several months ago. They claim they sent out a letter to that effect, but I have did not receive it. I also asked why there was no change in my plan rate since they canceled a feature of it, but they claimed that the “plan” was not changed. When I asked for the CEO’s contact info, I was told that they didn’t have it. What sort of company cannot provide the CEO’s contact info? I’m finished with Sprint…