Sprint Says Goodbye to CEO Hesse's Steady Fortitude

By Michelle Maisto  |  Posted 2014-08-12 Print this article Print
Sprint Dan Hesse

He also included the 20 customer satisfaction awards from J.D. Power & Associates, Sprint's climb "from worst-to-first" on the American Customer Satisfaction index, and its accomplishments in corporate responsibility and innovation, with Sprint being granted an average of more than two U.S. patents "every business day for the past two years."

And Hesse also noted the challenges of ultimately having to combine three networks—Sprint's mid-band Code Division Multiple Access (CDMA), Nextel's low-band iDen and Clearwire's high-band with WiMax.

"Combining these three disjointed networks into one was a can we couldn't keep kicking down the road," Hesse wrote, adding that after surviving a "near-death experience" in 2008, Sprint again had to "bite the bullet" and undertake a major rip-and-replace of its infrastructure.

"This has been an extraordinarily difficult transition, as call drops and blocks have increased and subscribers have declined," he went on, adding that the worst is again behind Sprint and now is the "right time in Sprint's evolution for Marcelo to take the reins."

Hesse's Steady Presence

From 2007 to 2014, Sprint had three clear objectives: fix the customer experience, establish a clear brand and focus on profitability.

"These huge objectives remained unchanged, and it was good for stabilizing the business and moving it forward," said Dawson, who in his Aug. 6 blog post described Hesse, on his arrival at Sprint, as a "safe pair of hands."

However, Dawson told eWEEK, "If the market changes and you stay the same, you start to fall behind. … The fact that Hesse had been there and been so consistent, started to work against Sprint."

Hyers agreed that there were benefits to Hesse's consistent presence and focus, and pointed out Hewlett-Packard, which went through several CEOs in quick succession, as having suffered the opposite.

"There's a lot to be said for the same person following through on a vision," said Hyers.

Roger Kay, principal analyst with Endpoint Technologies, is less impressed.

"He was likeable and affable and he looked the part … but he just didn't deliver the goods in the end," said Kay. "It's kind of surprising how long it took the board to catch on."

Kay added that telecom is still a "pretty old school" industry, meaning that Hesse will walk away with a considerable severance package.

"His severance is like $40 million, and he got like $100 million in stock … for essentially destroying shareholder value," said Kay.

A portion of Sprint's troubles came from its decision to back WiMax. Shortly afterward, Hesse acknowledged he knew WiMax wouldn't be the winning flavor of 4G, but said it was worth pursuing at the time to provide Sprint with the claim that it was first to 4G.

Kay, musing that he wouldn't be surprised if Intel had sweet-talked Sprint into backing WiMax, concluded, "Basically, he bet on the wrong horse. And you could say that everybody makes mistakes, but at his pay rate, you can't make mistakes like that."

Sprint's New CEO

Jackdaw's Dawson points out three personality types in the industry. T-Mobile's Legere is brash and speaks his mind, and then there's AT&T's Ralph de la Vega, who "operates within the talking points and only says the things that have been approved by his handlers and lawyers."


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