How Creative Destruction Transformed Telecommunications

Dan sits down with CEO Forum Magazine to discuss how the Internet and digital world were formed, as well as the direct impact this development will have on the telecommunications industry moving forward. The following was featured in the April edition of CEO Forum Magazine. 

-------

Robert Reiss: Prior to becoming CEO of Sprint, you were CEO of AT&T Wireless and witnessed firsthand the formative years of digital. Can you share some inside-the-scenes historical perspective?

Dan Hesse: You mentioned AT&T. It was back in the early 80’s and our main business back then was voice telephony. That was the core business – remember “reach out and touch someone?” But during that period, we were given two new technologies to start using ourselves. One was email. This was long before the internet – an “intranet” called AT&T Mail. The second was voicemail, but not from the point of view of you call somebody, miss them, and get their answering machine.
The primary new application of voicemail was allowing the user to record a message and send it through the network. These new applications were moving us away from analog, using digital bits, both email and voicemail, to disrupt the core business. The first big “aha moment” was the ability to shift time. If I wanted to send somebody a message at midnight or 1 o’clock in the morning, I didn’t have to worry about waking them up. I could send and receive messages whenever I wanted to.
Time shifting is now a big deal in all types of media. For example, it has changed cable television. If you have a DVR or you get your programs over the internet or overthe-
top, you watch when you want to watch. You create your viewing schedule, not the schedule of the TV networks.
But what was so instructive for me very early in my career was the notion of “creative destruction.” Our primary business was real-time voice telephone calls. We were coming up with new concepts that were going to compete directly with the core business. What made these time shifting tools even more useful was mobility, where place, which had been so important in our landline world, lost relevancy. As soon as I got a car phone in the mid-80s, I learned how much more powerful voicemail could be because place was no longer important. I used voicemail to send and receive messages, while in my car (hands free, of course!). It used to be time and place were critically important. Now, time wasn’t important and with mobile phones, place wasn’t important either. The real game-changers I learned about early on were time shifting, place shifting, and the power of creative destruction.

Recognizing America’s Most Just Companies

Reposted from Dan Hesse's LinkedIn series on Executive Leadership and Corporate Responsibility. The following was published December 9, 2016. 

Americans want “just” behavior from its companies. Forbes recently published a list of America’s most just companies after extensive survey work and data analysis by JUST Capital.

The inaugural report, the JUST 100 List, shows that Americans want companies to work for all stakeholders. This includes:

• Employees
• Customers
• Shareholders
• Communities
• The Planet

This report fills a gap, offering an easy-to-use reference guide in terms of overall performance, sortable by specific industry and score. Consumers, workers and investors can now access this information quickly and easily. The list is online now and will be featured on the cover of Forbes Magazine's December 20 Impact & Philanthropy issue. 

These companies deserve recognition. Capitalism is a force for good, but can become more so. I’m hopeful that this information will result in action that will make American capitalism even more responsible.

A Company’s Stakeholders Include More Than Shareholders [Podcast] | Overland Resource Group, NPR

Steve Kraske of The Overland Resource Group and NPR spoke with Dan on topics of empowering employees and leading creatively in an interview recording July 12, 2016. Please find an excerpt from the interview below. You can listen to the entire conversation at ORG's website here. 

------

STEVE KRASKE: Well, Dan Hesse, welcome.

DAN HESSE: Hi, Steve. Great to be here.

STEVE : You had an interesting response recently when you were asked what book on business leadership had the most influence on you. What was it?

DAN: Forbes called me and asked me, and I had interestingly just been interviewed for another book on the books that most impacted my life, and it was Plato’s Republic.

STEVE: That’s going to surprise people.

DAN: Absolutely. And it was really my first book on leadership. I was a college undergraduate, actually a liberal arts undergraduate, and reading a philosophy book, and it was about why you should be good. And it talked about what characteristics leaders should have, because it was a discussion about why—who should be king, who should be leader, who should be ruler, between Socrates and a bunch of learned Greeks.

STEVE: You make a point on your website, DanHesse.com, that conscience-driven, ethical leaders can make a very positive impact on the world. What are you talking about there? Because I gather you're not necessarily referring to the bottom line.

DAN: I’ve always viewed business leadership as a vocation akin to the clergy, teaching, parenting, public service, because you can affect so many lives. You affect the lives and livelihoods of your employees, your shareholders, the communities, your suppliers, your customers. So for example, a company like Sprint—millions and millions of people—by not only what you do and how you do it. So it’s not necessarily — the bottom line actually is helpful, because as the company does better, the company has more resources to do good.

STEVE: More options.

DAN: And more options. So for example, look at Sprint here in Kansas City. Almost every fundraiser event, Sprint's sponsoring it, buying tables, supporting the community and wouldn’t be able to do it if the company wasn’t successful. So it doesn’t mean — it’s not in lieu of the bottom line, but it’s — the bottom line helps to do good. Purpose-driven.

STEVE: Plato once said, going back to him, that the best leaders often don’t seek to be leaders – they don’t seek power. What do you make of that?

DAN: Well, I think it’s almost human nature. The people you trust are those who aren’t looking for power. That’s why you’re willing to give them power. You trust them to use it wisely. And Plato actually talks about the leaders that are the best leaders actually care more about their subjects than they do themselves. So I think those people — a lot of leaders, people who are natural leaders don’t seek the position of leader, and that’s, quite frankly, why we’re attracted to them.

...You can listen to the entirety of the conversation here. 

Corporate Social Responsibility Difference Maker of the Year Awarded by Urban League of KC | KCTV5

Article recapping the Corporate Social Social Responsibility Difference Maker of the Year Award appearrf on KCTV5.com. Published December 2011.

------

The Urban League of Kansas City honored KCTV's news director, an H&R Block founder and Sprint's chief executive officer Thursday with the organization's highest honor.

Under Hesse's leadership, Sprint employees work tirelessly to give to the community and promote green efforts.

Hesse said he and other Sprint executives take seriously their role as community leaders.

...Click for full article.

A CEO Worth Emulating

This article, reviewing Dan Hesse's corporate leadership, originally appeared on Talent Zoo's Digital Pivot blog. Published January 2013. 

------

As someone who grew up watching a parent run a business, I’ve always paid attention to CEOs who rise to the forefront of media attention. Many of them, like the revolving door of those unfortunate souls in charge of RIM, incur nothing but a growing disappointment in heads of major corporations and a concern for the future of our country.

However, Dan Hesse, CEO of Sprint, long ago earned a place in my heart. Although Sprint may not be the chief carrier in the nation, his manner of running a business is an inspiration to any current or aspiring entrepreneurs.

While other major cell-phone carriers remain faceless corporations, whose customers continually have nothing but ill to speak of them, Sprint has featured Dan Hesse in its commercials for years, a move that gives consumers a name and a face to associate with their cellular provider. This decision alone stands head and shoulders above the choices of other major carriers, who hide in the shadow of their brand and never emerge to address or appreciate their customer base.

Hesse has even, at times, invited customers with complaints about their cellular service to email him directly. Prior to that, when it became apparent that Sprint customers were increasingly dissatisfied, Hesse took steps to ensure that Sprint rose from having one of the worst customer service departments in America with whom to deal to having the absolute best.

Coming from a very technology-proficient family, and being a person who can occasionally be hard on mobile devices, I have personally been a thorn in Sprint’s customer service department at times, but have always had my issues resolved quickly and in the best way possible for all parties. If more CEOs truly took the time to listen, sincerely, to customer complaints, it would surely do wonders for the economy.

...Click for full article. 

The Business Impact Of An Outside-In Perspective At Sprint | Forrester

This article, chronicling Dan's customer service efforts at Sprint originally appeared on the blog of Forrester magazine. Published May 2012. 

------

Sometimes a CEO takes the reins at a company that’s in such great shape, I can’t help thinking, “Wow, it must be great to be that guy!”

And then there’s Dan Hesse, CEO at Sprint. Given the shape that Sprint was in when he got the top job in 2008, I was thinking more along the lines of, “Wow, he must be working off a karmic burden!” That’s because back then, the company had the lowest customer satisfaction ratings of any of the major wireless carriers. As a result, it was bleeding cash from high customer care costs and lost subscribers.

Faced with this mess, Dan decided to focus on systematically improving the quality of Sprint’s customer experience as a way of improving Sprint’s bottom line. We were so impressed by his efforts that we included a case study about Dan in Chapter 2 of our upcoming book, Outside In: The Power Of Putting Customers At The Center Of Your Business.

The book won’t be out until August 28th, but you don’t have to wait until then to get a sense of how effective Dan’s efforts have been. That’s because on May 15th, Hesse gave an address at Sprint’s shareholder meeting, and he had this news:

• Sprint now has the highest overall customer satisfaction rating among all major US wireless carriers. Yeah, that’s right — it went from distant last to first, according to the American Customer Satisfaction Index.

• As a result of eliminating the customer experience problems that fueled ridiculous amounts of contact center traffic, Sprint took its customer care costs down from $3.7 billion per year in 2008 to $2 billion per year today. That’s a savings of $1.7 billion per year from improving customer experience.

• Improved customer experience paid off in terms of customer acquisition and retention as well as cost savings: Sprint has now had six consecutive quarters of adding 1 million net new subscribers per quarter.

...Click for full article.