Why Great Turnarounds Start with Culture, Not Strategy

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Dan Schulman (1:00)

I think most people say that they want to put the customer front and center.

But it's not easy to go and do that. The initiative we have inside the company is entitled Every Customer Has a Name. It means we treat you as a person, not as an account, not as a line. Almost like, you know, if one of my family members had a problem, how would I want the company to treat them? And so, there are tons of small things that basically assure that we're putting a customer front and center. And my view is that customers fire companies all the time in quiet ways, because they feel disrespected.

Adi (1:55)

So, Dan, thanks for sitting down with HBR.

Dan Schulman (1:57)

That's a pleasure, Adi.

Adi (1:58)

All right. So, I want to ask you, you're at Verizon, you turned down the job, as I understand it, twice, maybe more than twice, before you agreed to take it. What made you want to get back in the game?

Dan Schulman (2:09)

Well, I turned it down because I was very happily retired. I was living on our ranch in Montana with my beautiful wife, who I love very much.

Adi (2:19)

Yeah, I noticed the cowboy boots.

Dan Schulman (2:20)

Yeah, yeah, always with me. I wasn't looking to come back into corporate life.

But I was on the board, I was the lead director. We needed to make a change. I felt a keen sense of loyalty to the company. And I felt like the company had a tremendous amount of assets that we could leverage, and that there was a real opportunity to take a iconic American company and at least have the shot at turning it around. And so after a lot of discussions with my wife, I agreed reluctantly to go do it. But here I am, nine months into the job, and I'm loving it.

Adi (3:05)

But what was wrong, like at a high level, what was wrong with the company?

Dan Schulman (3:10)

You know, we had been losing market share for five years. We went from having the largest market cap in the industry to having the lowest. We had the lowest PE multiple, which is the market's way of saying that they don't really believe in your growth going forward. Our churn rates were going up, our customer satisfaction results were going down. So, you know, there's just a ton of things. And I think inside the company, really importantly, we were willing to be prey. We were willing to gently seed market share to our competitors. We weren't playing to win. It was obvious we needed to make a change. I think the company for a long time had relied on its engineering prowess, and it's not enough anymore. And we had put the network at the center of everything that we do, as opposed to the customer. And then I also think, culturally, you know, it's a proud company. It has a lot to be proud of. But that also means that you're resistant to change, that you look back at what you did, and you want to repeat it. And in the era that we live in right now, where change is accelerating at an increasingly hard to imagine pace, you know, we were falling behind. I always say at almost every company meeting, when the pace of change external to a company is faster than the change of pace internal, you're falling behind. And we were falling behind because we were risk averse.

We were hierarchical.

We love our process.

You know, we love to show our work. But really, you know, I'm very much like, I trust that you're doing good work, but I want to see the outcomes. And I want to know when those outcomes are coming. I think we're not imagining enough, like, what kind of role can we play in the age of technology, in the age of AI, and looking backwards to previous success we had, as opposed to what success we might have in the future.