I interviewed Sprint Nextel (NYSE:S) CEO Dan Hesse for the just-out issue of Portfolio magazine. The same version of the interview is here on Portfolio.com. But, as always, these edited Q&As are only a tiny sliver of the full conversation.
So I've posted below one unedited chunk that I thought was revealing -- about Hesse's decision to take the Sprint Nextel CEO position. How do you choose to take control of a severely struggling company?
Q: Why did you want this job?
A: I've been asked that question a lot, both before - actually while I was still running Embarq, when I just came here after the decision was made and people still ask me the question six months later.
Anyway, it was a hard decision. It really was because I was in a great place. I was working in a company I really liked. I liked the team. I liked the board. I'd worked there very hard for a couple years to get it moving in the right direction. It was hitting on all cylinders. I was finally getting some time off occasionally with the kids and things like that, which were important to me.
But a presentation that I have been giving for years -- I really feel very passionate about it and it was really an opportunity to kind of walk the talk -- was this speech I call Leadership as a Vocation and I'm talking primarily about business leadership and leading large companies.
I give it on campuses quite often and have over the years, which is if you think of what gives meaning to your life and vocations often do, whether you choose a religious vocation like the priesthood or teaching or public service or politics or what have you. A lot of people don't think of business leadership as a vocation and really a lot of times you choose a vocation because you have an opportunity to improve the lives of others and almost nothing, if you think about it especially in terms of a large company, do you have the opportunity to impact as many lives in a positive way, not only livelihoods, but quality of life in terms of the way things are done and do you enjoy your work and all those kinds of things than you do as business leaders. Your employees, your suppliers, your customers, your shareholders, the communities in which you work.
So here I was running a company, a good sized company, maybe Fortune 350 or so on a Fortune 500 list, six billion plus company, that obviously impacts the lives of many thousands. But here you had this icon, if you will, a company much larger and the opportunity to impact the lives of a lot more people.
We had lived in this community and knew how important Sprint was to the community and Sprint was in trouble. To be perfectly honest at the end of the day, that was it more than anything else. That was the issue.
I even had this conversation with my wife. She knew it really made me tick 'cause she knew the biggest reasons for not taking the job was very clearly I'd have less time with her and the kids and that weighed on me a lot.
It wasn't a financial decision at all. I was making plenty of money over there and there wasn't anything I could possibly want that I couldn't buy. I don't mean that like I'm not rich - I don't have grand taste. I don't have a second home. I don't have a yacht. I don't need any of that kind of stuff.
But it was that opportunity to make a difference in the lives of a lot of people and I knew a lot of people at Sprint. I knew they were in pain. I knew the customers were in pain and so it was an opportunity to make a difference and that's fundamentally why I took it.
Q: You obviously knew how bad things were. Did that make you want to take the job more or is that a factor making you feel like -
A: It's interesting 'cause when I got here, I realized that the problems were more significant and deeper than I had expected and I knew the company pretty well. It wasn't like I didn't come in with eyes wide open.
I knew a lot of people at Sprint. I was right up the street. Embarq was a spin-off from Sprint. I had - I was a wireless guy. So I knew the industry pretty well. I knew Sprint's situation pretty well, but the issues that I've had to deal with and that I found early on in terms of what needed to be fixed was greater than what I'd even thought.
I was going some place with that. Your question was - yeah; I mean I came in with eyes wide open and I knew the problems were significant, but I didn't know how significant they were until I got here. And I don't think the world didn't either.
I mean think about where the stock was trading when I got here and then where the stock was trading - I came right at the end of the fourth quarter. Then as soon as we had announced the fourth quarter result, that the stock went down to five dollars and change.
I mean the stock lost more than half of its value literally within a very short period of time after the Street found out what really happened in the fourth quarter of '07.
So, I came in just before Christmas. I looked at the numbers and I said Holy Smokes, the Street doesn't know this.
Q: And you didn't know that?
A: And I didn't know it coming in. Course it wasn't public information. Kind of knowing how serious the problems were and of course as soon as we announced what had happened in the fourth quarter and what was going on in the business.
Q: In hiring you, the board didn't - did you feel - this is a strong word to use, but did you feel duped or anything?
A: No; I think to a certain extent the Board didn't realize how significant the issues were 'cause things declined very quickly, very significantly and I don't think they had a full understanding. They clearly had an understanding when they were out there recruiting for a new CEO. They clearly understood everything wasn't going as well as they'd like it to go.
They didn't dupe me. I don't think they knew either. I remember having my first Board meetings where I would go through the state of the union and they appreciated the candor, but I think even they were taken back a bit.