I just ordered a new phone. Paid for it and it was to be sent. Verizon used:
DHL FWD DFILL GROUND
Now this is some screwed up amalgam of DHL and UPS which got lost somewhere in northern NJ. Impossible to track and guess I will have to deal with the incompetents at Verizon.
That company is close to total implosion. Fortunately my pension is with Prudential now and not these incompetents!
Well here goes. Some 35 years ago I was SVP and COO of NYNEX Mobile soon to become Verizon Wireless. The interesting thing I found out was in those days the least favored employees were sent there, the better ones assume wireless was just a fad. After all the old company had guaranteed earnings whereas wireless was competitive.
I recall once I asked the head of a region what her market share was. She said fifty fifty with the other player. I knew the answer, she had less than 20% and was clueless. She was from NY Tel. Churn was 20% per month, there being no reason for resellers to not do it since they had no retention policy. The list goes on.
Today Verizon has had a massive collapse. Now consider this:
They tell you to log onto their site. But the site demands that you enter a code sent to your cell phone. But if the service is down you will never get the code. Dumb, dumber, dumbest!
Never ask telephone types to design or implement anything. And worse with a company with over $160 billion in debt beware of their cost cuttings. The place needs a clean sweep!
I took a trip to a Verizon store to buy a new mobile phone. The trip reminded me of Jack Nicholson in Five Easy Pieces. All he wanted was two pieces of toast. The waitress was less than customer friendly. This also was the folks at Verizon. Here goes:
1. I walked into the store and dutiful registered my presence. I then waited about twenty minutes as the two sales folks go finished with their customers.
2. Then a sales person came to me and "demanded" to see my drivers license. I made my first mistake, I asked "why". She then responded as some KGB agent at the border indicating it's the "rule", but lacking an accent. She now supposedly knew I was who I was and she asked my why I was there. I assume perhaps she may have thought it was for an oil change or some bark mulch. I noted I wanted to buy a new Samsung phone to replace my old one which she held in her hand.
3. Off to the set of phones which I had already perused and I said to her, "This one". Well she was now non-stop. I was being told about improved plans, discounts on phones, monthly charges, but no two pieces of toast. I told her I was here just to but "this phone". She then told me she did not like my attitude. I told her I would write the CEO. She then told me she would get the manager! Gone! She frankly in my opinion was one of the nastiest and arrogant individuals I have ever met. My refusal to play along with her script just drove her to total instability.
4. So I stood there, no toast or phone, waiting I assume for the "Manager"
5. Then after a bit the "Manager" cam out. He wore a light grey crumpled sweat shirt, scruffy beard, gold chain around his neck, full head of black curly hair. An extra from Jersey Shore perhaps.
6. I then said I want to "buy this". He began the same litany as the sales clerk. I said "Stop, I want this" He look shocked. I repeated "I want to buy this"
7. Finally he looked at me and said he did not have it in stock but could send it to me. I said, "Why not tell me that in the first place" and out I went. No "toast" and no phone.
One wonders why Verizon has been performing so poorly. Well to find out just try to get "two pieces of toast" Clearly the company had developed the worst culture and the most incompetent management I have ever seen.
Oh yes and BTW, I was a Senior VP and COO of NYNEX Mobile, the predecessor of Verizon Wireless. I always told my folks, "If all else fails listen to the customer!" Clearly they have forgotten this. I thought of writing the CEO but after he almost a decade at the helm he has, in my opinion and my experience, single handedly destroyed a great company.
Verizon Unthered is a book by McMurray about the time Ivan Seidenberg was at Verizon.
First it must be noted that this is a book about Ivan Seidenberg and not by Ivan Seidenberg. If the notices are correct the primary author is McMurray with inserts by Charan. The book is a hagiography of the subject and via that a presentation of the evolution of Verizon from the time of the ATT breakup in the early 80s to about 2019. Unlike the book by Coll, TheDeal of the Century, which is a brilliant exposé of the actual ATT breakup, this work is a view of the evolution of one of the Baby Bells from then to almost now. Likewise unlike the classic book by Alfred Sloan, My Years with General Motors, the book does not purport to be a personal reflective.
Prior Nexus
It is worth reflecting that I worked for Seidenberg in the early 90s. Two issues are quite insightful. First, both he and I agreed that I needed no title, no rank, and all that was known was I reported to him. My job was to clean up messes that had resulted from poor choices from acquisitions. The closest I got was an introduction to the Board as “Doctor Death”. My second observation was at a meeting with Seidenberg about planning, the VP of HR told a tale about the types of people in the various former ATT elements. He noted that; “the A students went to Bell Labs or ATT, the B students to Western Electric or Long Lines, and the C students to the operating companies”. I tried to deconstruct that remark, initially as humor. But there I was an MIT PhD, having worked at Bell Labs, with all those C students. It was no longer humorous; it was a fundamental definition of “culture”. Culture is a theme that pervades this book, especially in the dicta by Charan.
Death of Wireline
The wireline business is the old copper line telephony. I recall that in 2002 I wrote a paper for OSTP, the White House Science Advisor’s Office on the Imminent Collapse of Telecommunications Industry. The point was twofold. First wireline was being disintermediated by wireless and second IP, Internet Protocol, was displacing classic telephone networking. Clearly Seidenberg saw that and his actions to bolster wireless by scale, thus the Bell Atlantic deal and then to sell off many rural properties to companies like Frontier et al was prescient. However the recognition of IP came a bit too late.
Evolution of Wireless
Wireless was a displacement technology. It required less capital per subscriber than copper and had shorter evolutionary lifetimes. Namely we see it go from 1G to 5G in relatively short periods as compared to the time between crossbar mechanical switches and electronic switching. Scale is critical because it can drive down the costs. But it is just infrastructure, and the value added is de minimis. Moreover wireless was unlike the old telephone world, there was competition. Dealing with competition was something the old Bell companies had no experience in. One of my early experiences was explaining that in the real world that profit was revenue less expenses whereas in the regulate world profited was a return on assets, no matter how inefficient you may have been. Thus the Seidenberg approach is laid out his typical manner of bringing competing elements together and letting the best one win. The result was a Bell Atlantic victory and a dismemberment of the old NYNEX mobile, a brilliant move.
FIOS
Fiber to the home sounds like a great idea. I actually tried it out in the US in the early 2000s after doing some in Europe. However it is very costly. It is tens of thousands per mile just to run the fiber, then costs to acquire and equip customers, and then to have the culture to provide content and maintain customers. The most significant barrier to entry is the CATV incumbents. They are brutal, they hold the high ground, many own the very content you want to provide.
How Verizon ever managed to present a viable business case is beyond reason. But they did. Here I think Seidenberg may have allowed the folks to go well beyond their capabilities. The Telco people are street fighters where as the Cable folks are strategic warriors. The true barrier to entry is the incumbent, and the Verizon management did not seem to truly grasp that issue. Thus lots of unused fiber. It does not age as well a good wines.
FLAG
FLAG was a global fiber network. It was a great idea , a first, and it demanded great skills to implement. The problem there was again culture. As staff requirement were needed they drew from the operating company base. Unfortunately, few if any even had a passport, no less international business skills. The book I believe fails to see the less in this failure.
MCI Acquisition
MCI was left hanging after WorldCom collapse. It had a sales culture and its acquisition by Verizon was spot on. It added an element that was missing, the ability to deal with large business customers and provide them with excellent fiber backbone networks. The discussion in the book about this are well worth the read.
The World of Content
Probably the biggest business mistake made by the company was the acquisition of AOL and Yahoo. AOL was done in 2015 and Yahoo 2017. I recall that in 1996 I was teaching at Columbia Business School and one case I did was on AOL. I noted that AOL’s business model was defunct and that in many ways it was then just a Potemkin village. Yet 20 years latter after multiple signs of failure Verizon buys it. Then Yahoo. The they all get dumped at great loss to the shareholders. The book lacks any self-reflective understanding of the reasons why this happened.
Deals, Deals, Deals
In many ways this is a book about deals. Some were great, MCI for instance, some were disasters, AOL. Seidenberg shows brilliance in executing deals that lie in his plane of competence.
Missed Opportunities
The Internet space seems like a major set of missed opportunities. But it has always been a blind spot for Telcos. That is strange since in the late 80s my colleague at NYNEX was building and supporting NYSERNET, the IP based network for NY schools. It later became PSI, one of the first Internet carriers. I recall I asked Bob Kahn, a father of the Internet to give a talk to senior NYNEX management about the Internet in 1987. After the talk the head of MIS came to me and berated me for having such a fool speak. This would never happen, no Internet! This was the cultural base of the missed opportunity.
However Seidenberg saw some of this with GTE and BBN but the slowness to respond may have been driven by regulatory issues. There also was Genuity, an international carrier populated by NYNEX folks that had a great opportunity but alas went bankrupt. That too was in my view a cultural failure.
Overall
The major deficit of this book is the lack of any self-reflection and moreover any assessment of the weaknesses of any of the principals involved. It reads that every step and decision was at times stressful but had flawless results. My assessment is based upon being an inside observer but not an insider. I had come from the competitive world of cable and start ups before rejoining NYNEX/Verizon, and thus I had poor political skills, if any, but strong entrepreneurial capabilities and experience. Thus my assessment is filtered by that predisposition. In my experience, Seidenberg was a brilliant organizational politician and utilized people to their best. He kept the company well situated through a complex period and managed to see it grow exceptionally well. His successors, not so well.
Finally the style of the book in my opinion is chaotic. It is a staccato of vignettes about one deal after another interspaced with charts of aphorisms by Charan, that real like power points from a Harvard Business School lecture. There is some chronological flow but little exogeneous environment inclusions showing what may have drivers to decisions.
However, Verizon has lost 50% of its market value in the
last year (2022). It had dumped AOL and the other “ego” driven buys and
attempts to use 5G as a springboard. However, the management never really comes
to ask the key question: “What business are we in”. I would say
perhaps the need a Lou Gerstner who resurrected IBM after the collapse of large
main frames.
| In Millions of USD (except for per share items) | As of 2016-06-30 |
| Cash & Equivalents | 1,325.40 |
| Short Term Investments | 5,055.68 |
| Cash and Short Term Investments | 6,381.09 |
| Accounts Receivable - Trade, Net | 991.18 |
| Receivables - Other | - |
| Total Receivables, Net | 991.18 |
| Total Inventory | - |
| Prepaid Expenses | 224.73 |
| Other Current Assets, Total | - |
| Total Current Assets | 7,597.00 |
| Property/Plant/Equipment, Total - Gross | - |
| Accumulated Depreciation, Total | - |
| Goodwill, Net | 431.37 |
| Intangibles, Net | 202.12 |
| Long Term Investments | 34,412.45 |
| Other Long Term Assets, Total | 245.12 |
| Total Assets | 44,214.29 |
| Accounts Payable | 171.62 |
| Accrued Expenses | 982.86 |
| Notes Payable/Short Term Debt | - |
| Current Port. of LT Debt/Capital Leases | - |
| Other Current liabilities, Total | 122.03 |
| Total Current Liabilities | 1,276.51 |
| Long Term Debt | 1,266.28 |
| Capital Lease Obligations | - |
| Total Long Term Debt | 1,266.28 |
| Total Debt | 1,266.28 |
| Deferred Income Tax | 13,115.82 |
| Minority Interest | 32.41 |
| Other Liabilities, Total | 159.38 |
| Total Liabilities & Shareholders' Equity | 15,850.40 |
| Redeemable Preferred Stock, Total | - |
| Preferred Stock - Non Redeemable, Net | - |
| Common Stock, Total | - |
| Additional Paid-In Capital | - |
| Retained Earnings (Accumulated Deficit) | - |
| Treasury Stock - Common | - |
| Other Equity, Total | 28,363.89 |
| Total Equity | 28,363.89 |
| Total Liabilities & Shareholders' Equity | 44,214.29 |
| Shares Outs - Common Stock Primary Issue | - |
| Total Common Shares Outstanding | 948.25 |
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