Sprint (NYSE: S) CEO Marcelo Claure, who took the helm at the carrier a little more than a year ago, is giving himself three to five years in total to turn around the company.
That's one of the key takeaways from an in-depth profile of the Sprint chief in the Kansas City Star, which tracks Claure's life from his childhood as the son of a United Nations official to his founding of wireless distributor Brightstar and his eventual succession of Dan Hesse last year as Sprint's CEO. The profile also looks at how Claure's life has changed since he moved his wife Jordan and now five children from Miami to Kansas City.
Claure, who in the profile comes across as a man who has always had tremendous drive and been in a hurry to succeed, knows that time is ticking. "What I know is I got hired to do a job, and I want that job to be completed in three to five years," Claure said.
Claure has the backing of Sprint Chairman and SoftBank CEO Masayoshi Son, who thought of trying to sell Sprint following his failed efforts last year to merge the company with T-Mobile US (NYSE:TMUS), but who now is firmly behind the turnaround. "I now see the strategy, how to turn around. I now see the path," Son said.
There are five key points to Claure's turnaround plan, the report noted. First, Sprint needs to improve its network, which it plans to do via its network densification program, called the "Next Generation Network." Claure has said that "nearly all" of Sprint's existing macro cell sites will be upgraded to support 800 MHz, 1900 MHz and 2.5 GHz for LTE. The plan also calls for Sprint to add thousands of macro cell sites and tens of thousands of small cells. Claure has worked to understand the nuts and bolts of Sprint's network -- not his natural strong suit prior to becoming CEO -- and also manage tensions between SoftBank and Sprint engineers as they hashed out a network plan.
Claure also plans to keep cutting costs. Sprint slashed thousands of jobs last year as part of $1.5 billion in cost-cutting measures and Claure has promised more cuts to come. He also aims to strengthen Sprint's brand and has moved to shake up what it is offering in the marketplace with its "All In" device and service pricing for $80 per month, as well as a shift away from two-year contracts to device leasing.
Sprint will also need to finance its turnaround, which the carrier and parent SoftBank are doing through new leasing companies for both devices and network gear. Some financial analysts have said such vehicles are a prudent way to manage costs while others see them as just more debt that Sprint is pushing off its balance sheet.
Finally, Claure is working to engage and motivate Sprint's team, the Star report said. Claure has brought in his own management team, and many former Hesse lieutenants are gone or leaving Sprint. Claure has a hands-on management style, including sitting in on customer care calls and responding to customers' complaints on Twitter, as T-Mobile CEO John Legere often does. Claure pushes his management team to work long hours, sometimes disrupting their schedules and holidays.
Claure said he also is working to make employees more nimble and flexible. As has been reported elsewhere, he started a "stupid rule" campaign that lets employees flag any practices that don't make sense -- like retail having store employees wear uncomfortable black dress shoes (they can now wear any kind of black shoe).
The Star report noted that Claure sends out enthusiastic weekly emails from to energize employees, recognize contributions, tout Sprint's accomplishments and give an update on strategy and where Claure is traveling. At least one Friday per month, employees at Sprint's Overland Park, Kan., headquarters listen to music and enjoy beers as a way to celebrate and relax.
Over the past year Claure said he's gotten a better sense of how to turn the company around. "Now I know the details of Sprint and of this business and I'm involved in the front line," he said. "I'm better equipped to run Sprint."
Still, there are plenty of challenges. Sprint burned through $2.2 billion in cash last quarter, up from $496 million a year earlier. Although network speeds and data performance are improving in markets across the country, Sprint still ranks last in those categories nationally, according to network testing firm RootMetrics. Claure has every incentive to right the ship. Earlier this month Sprint extended his contract until May 31, 2019, and said he will get 10 million shares of company stock if his turnaround efforts can push Sprint's stock to at least $8 per share and keep it there. Sprints stock is now at $4.76 per share.
Claure said success will mean that Sprint stops losing money, generates more cash than it spends, adds a "significant amount" of new customers every quarter and starts growing. Claure is givng himself three to five years to turn it all around -- and if he can't get it done by then, he said he knows someone else should be in charge.
Claure also said he knows that Sprint's 31,000 employees' futures hang in the balance, as does the economic prospects of the Kansas City communities in which they live. But "it is also about my legacy," Claure told the Star. "People will never remember the story of Marcelo at Brightstar, which, it was a pretty cool story. What people will remember is Marcelo's passage at Sprint."
- see this Kansas City Star article
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