Paul Wilson: Can ‘Mr. Big’ Fix Sprint’s Unfixable Corporate Culture?

Yesterday was new Sprint CEO Marcelo Claure‘s first day on the job…

I’m sure the 43 year-old executive spent most of his day at the clinic doing his pee test, filling out HR insurance forms, getting his employee handbook, 401K explanation, etc.  Tuesday was most likely his real first day calling the shots and sitting behind the big desk.

So what’s in store for the new guy and what signs should we look for from the Tower of Pure Thought to tell us that Sprint will survive? Or in the words of the late Tom Leathers, that the campus will not be turned into Section 8 housing?

What skills play to Claure’s advantage? 

First and foremost, he has a killer instinct at his core that goes all the way back to age 10 when Claure began buying and selling his mother’s clothes on the sidewalks of his boyhood home. Bolivia is a very poor country and if you want to make money there you have to find it where you can. Claure took those life lessons with him to college where he brokered frequent flier miles instead of working at minimum wage college student type jobs.

After watching his homeland being out of it for 40 plus years, he helped put Bolivia back on the map in soccer. It’s a real game down there now. While they didn’t qualify for the 2014 World Cup they did tie powerhouse Argentina in a qualifying round match.

However Claure’s big spring board, as I said in my last column, was when he was given – given mind you – a worn out retail phone store where the previous owner had thrown up his hands and couldn’t make it.

And what did Claure do with his free, broken toy? 

He fixed it, rebuilt it, sold it and headed to Miami where he took what he’d learned in telecom and started Brightstar. His first billion came when it sold less than half of it to Softbank. His next billion will come when Sprint owner Masayoshi Son officially relieves Claure of his remaining ownership since he’s now running Sprint.

All in about a 16 year period, mind you.

During the Brightstar merger, slow dance, Son and Claure formed a bond, a bromance.

Son had his eye on Claure for bigger and better things than just the merger at hand and immediately put him on the Board at Sprint.

Son and Claure see eye to eye. They’re both gunslingers operating on gut level instinct. 

Former Sprint CEO, Dan Hesse on the other hand, came from a military background and was much more conservative by nature, Hesse went by the book, was a planner, a thinker and a strategist. Son tolerated Hesse until he no longer needed to.

We know who Claure is, the larger question is what’s he going to be up against at Sprint?

To begin with he’s going to be running a company that he didn’t start on his own with his own team, his own “culture.”

I stay in close touch with a handful of senior management people at Sprint and polled a few of them on their thoughts about what Claure’s biggest battles will be. And they responded about how I thought they would.

I mentioned in my last column that the “Sprint culture” had become the customer and it’s been that way for over 20 years. Sprint simply must get to market faster with products and services and get out of their own way.

And that culture is the enemy preventing that from happening.

Here’s the money quote:

“Sprint is still under the control of demi-kings who have built their empires around their line of business which makes launching any Enterprise solution that much more challenging.”

What that means?

That Sprint’s corporate culture is more focused on serving itself and its internal fiefdoms than with meeting customer needs and getting products out the door.

When people are protecting only their team and their product and an “enterprise” solution is needed – something that serves the entire product line – it requires everyone to play together on the same team for the greater good of the customer.

Sprint’s current culture makes that next to impossible to accomplish. 

The next thing on Claure’s radar?

After years of being in third place, Sprint is very close to slipping to fourth. You can smell it. And to Son that smells like chum in the water, so he’s going to unleash Mr. Big and allow him to do whatever he wants.

By whatever he wants, I mean whatever….. he….. wants.

Claure has to stop the churn. Churn is a term used to measure how many customers are going out your back door as new ones are coming in the front. Churn is a killer when you’re losing more customers than you’re taking on and anyone can do Sprint’s unfortunate math on that with a solar powered calculator.

Lastly, Forbes said in July, “The network modernization plan is helping Sprint in reducing its operating expenses substantially by eliminating the duplicate fixed costs of maintaining different networks. It is allowing for better 3G/4G coverage and reducing roaming costs…”

Better coverage and reliability means customers will be more likely to stay put – one key to lowering the churn. That’s good but it won’t be enough. Claure has to continue to lower prices and improve margins at the same time.

Unfortunately that plan is missing. 

“Framily” isn’t going to get it done. It’s too hard to understand for the average bear and it’s not cheap enough. Sprint has to match T-Mobile’s pricing models.

If Sprint can’t join with T-Mobile they now have to lick them and lick them good. 

Also, Sprint has lost a handful of executives to Sprint vendors who, in turn convert them into lobbyists of sorts.

Their new job with their new companies?

To walk back into Sprint, leveraging their old team and old contacts and make sure certain products make it into the Sprint network or on the shelves of Sprint retail stores. If that sounds a lot like Congress it’s because it’s exactly the same and that needs to change.

Sprint’s customers have to run the business imperatives, not its culture.

One of my contacts left me with this last thought.

“Whatever Claure wants will happen.  I expect to see him changing the executive leadership team soon.”

One of two things is going to have to change; either the culture or the executives.

My bet, you’ll see a wholesale leadership change over the next 6 months.

And my money’s on Claure getting the job done.