Light Reading

A Short History of Hesse

Sarah Thomas
8/6/2014
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When I started my career as an intern at Telephony magazine just over eight years ago, I was thrilled at the prospect of gaining (through a family friend) an exclusive interview with Sprint CEO Gary Forsee, and making a name for myself.

But a few months later, Forsee resigned (or was pushed), crushing my interview ambition. But there was soon a new interview target (though without the quasi-nepotistic connections) as Dan Hesse took over as top dog at my hometown carrier.

From his first black-and-white commercial and his emphasis on network harmonization and customer service, Hesse promised to turn the struggling carrier around.

And, in many respects, he succeeded. The company he is handing over to new CEO Marcelo Claure is much different than the mess of networks and brand confusion he inherited, even if many challenges still remain. (See Sprint Appoints Claure As New CEO and Hesse Out, Claure In: Sprint Is Son's House Now!.)

It was often messy, but during his tenure, Hesse shut down Sprint's old Nextel network, pivoted the company from WiMax to LTE, and -- his biggest accomplishment -- negotiated Sprint's acquisition by SoftBank Corp. , netting it the cash and leadership it needed to continue its Network Vision (although ultimately getting himself ousted in the process). (See Softbank Closes on Sprint Acquisition.)

"Dan Hesse walked into a very, very difficult situation," says Interactive Broadband Consulting Group LLC (IBB) Senior Partner Jefferson Wang. "From a network perspective, it was Nextel at low-band, Sprint at mid-band, WiMax at high-band. There were two different headquarters -- Reston, Virginia, and Overland Park, Kansas. It was a company with dual identities. He had to unify and harmonize all that, which took a lot of strong, decisive decision making. That is what he was great at."


For more on the key developments in the US mobile sector, check out the stories at Light Reading's dedicated mobile channel.


As we bid Hesse adieu and wish him and his reported $40 million severance package well, we take a look back at some of our favorite moments with the outgoing Sprint CEO, who we'll always remember in all his black-and-white glory.

Click on the picture below for more:

The Face of Sprint
Sprint eventually pulled its black-and-white commercials featuring Hesse, meant to give a face to the brand, but Hesse's celebrity status was already secured.
Sprint eventually pulled its black-and-white commercials featuring Hesse, meant to give a face to the brand, but Hesse's celebrity status was already secured.

In addition to being a strong leader, Hesse was just a downright likeable guy. Glassdoor named him one of 2014's highest-rated CEOs by employees, even though he was also the highest paid in the wireless industry last year, raking in $49.1 million, including $27.8 million in stock. (See Sprint CEO Hesse to Stay On Through 2018.)

Before T-Mobile US Inc. CEO John Legere came around, Hesse's laidback keynotes had the most quips and quotable one-liners. I think Light Reading's own Dan O'Shea summed it up best, when he commented almost a year ago: "Hesse has been in the sector forever, and has proven himself very level-headed over the years, even when hawking fringe-appeal ideas like free space optics. He is the sort of guy who, if he was my neighbor and I was going out of town for a long period of time, I would totally trust him to water my plants, bring in the mail and make sure a few lights were left on every night to make it look like someone was actually there."

But, nice guys finish last, as they say, and Sprint is in need of a shakeup, especially as a merger with T-Mobile US is off the table. There has long been talk of the board distancing itself from Hesse under Softbank CEO Masayoshi Son's leadership, so his departure isn't all that surprising, even with a five-year contract in place. (See SoftBank's Son Keeps Sprint on Short Leash.)

In a memo to employees, Hesse acknowledged the rocky road Sprint has taken during the past seven years, and reiterated his confidence in the company he is leaving, and in its new leadership.

"With the most difficult part of the Network Vision build behind us, Sprint is about ready to begin growing again," Hesse wrote. "A 'controlled entity' like Sprint can be most effective when the majority owner and the CEO are fully aligned and are great partners. Marcelo and Masa enjoy an exceptional relationship, which has grown out of mutual respect between two very successful entrepreneurs. This is the right time in Sprint's evolution for Marcelo to take the reins and get the most benefit from our relationship with SoftBank."

IBB's Wang wasn't surprised to hear of Hesse's departure either, as nearly seven years is a long time for any CEO to serve. He praises Hesse for teeing up Son and Claure to make the changes needed to make Sprint a real competitor in the US again. Hesse harmonized the networks, gave Sprint a brand identity, and improved its customer image. Now it's up to Claure and Son to execute, but Wang thinks they're up for the challenge.

"If Son is behind it, it will get very aggressive," Wang says. "That's the only way he plays. He plays scale, aggressive price changing, and bringing the industry down to a certain threshold that's difficult if you don’t follow… If he has the control in the US market, he'll bring all his assets here and disrupt the disruptor."

— Sarah Reedy, Senior Editor, Light Reading

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KBode
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KBode,
User Rank: Light Sabre
8/7/2014 | 2:52:04 PM
Re: Hesse: A Man of Many Strategies
It seems like between WiMax/Clearwire and Nextel they were always heading a million directions at once, and not doing anything very well. The truly well-performing network has been "around the corner" for what feels like most of a decade now. It almost feels like Hesse was just starting to figure out the correct path forward when the SoftBank deal arrived.
SReedy
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SReedy,
User Rank: Blogger
8/7/2014 | 9:20:25 AM
Re: Hesse: A Man of Many Strategies
True, Sprint was banging on about unlimited when no one else was, but it didn't have the effect of making them bring back unlimited. Quite the opposite really.
Carol Wilson
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Carol Wilson,
User Rank: Blogger
8/6/2014 | 4:22:53 PM
Re: Hesse: A Man of Many Strategies
Dan,I agree. That's kinda what I meant about having lots of different strategies but not one laser-focused approach to the market. 
DanJones
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DanJones,
User Rank: Blogger
8/6/2014 | 4:20:56 PM
Re: Hesse: A Man of Many Strategies
Well you'll note that Legere has either Neville Ray -- the real power behind the throne --  or  Carter Braxton do his presentations with him as well. He's pretty quick to acknowledge the CTO and CFO in public.

Personally, I understand that some people find Legere an abrasive potty mouth (doesn't worry me but then years of having editors for bosses will do that to you) but the whole "uncarrier" strategy HAS actually changed some aspects of the way that AT&T and Verizon do their businesses.

I'm not sure I could point to a single time that happened under Hesse's leadership. Maybe AT&T marketing HSPA+ as 4G but that was more a reaction to Verizon.
SReedy
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SReedy,
User Rank: Blogger
8/6/2014 | 4:19:08 PM
Re: Hesse: A Man of Many Strategies
I think Sprint took its sweet time on big decisions like moving to LTE and Spark, too. They didn't move fast and things got messier as a result. Again, though, Hesse inherited a huge mess, so he can be blamed for not moving fast enough, but not for causing the problem in the first place.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
8/6/2014 | 4:12:01 PM
Suit with tennis shoes?
Suit with tennis shoes? It works for Doctor Who.

Carol Wilson
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Carol Wilson,
User Rank: Blogger
8/6/2014 | 4:02:39 PM
Re: Hesse: A Man of Many Strategies
Dan, I would agree people put too much emphasis on CEOs, but both Hesse and Legere are inviting that scrutiny by making themselves the face of their companies albeit in very different ways.

The independent contractor strategy could actually work to enable faster deployment if managed correctly. But that may not have been the case with Sprint. 
DanJones
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DanJones,
User Rank: Blogger
8/6/2014 | 4:00:10 PM
Re: Hesse: A Man of Many Strategies
People place too much emphasis on the CEOs sometimes.

 

I have been told in the past that the real reason that T-Mobile has been so much faster in deploying LTE than Sprint, which is the rock that their current expansion is based on, is because Sprint relied much more heavily on independent contractors than T-Mobile did. 

That's just an anecdote I've heard, nonetheless, food for thought...
mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
8/6/2014 | 3:56:23 PM
How has Sprint really improved?
It's still nipping at the heels of AT&T and Verizon... its coverage is 3rd place... I suppose it hasn't fallen further behind, but has it really gained that much ground? 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
8/6/2014 | 3:23:15 PM
Hesse: A Man of Many Strategies
I would agree with Jeff Wang that Hesse did a tremendous job of pulling Sprint together into a single entity, even if that behind-the-scenes work goes on today. And I would agree with Dan O'Shea that he came across as a good and decent guy, who genuinely cared about the company and its employees. I think that shows in his final quote as CEO. 

Sometimes it felt to me like there were almost too many strategies in play and that they kept shifting a bit. That may be unfair to say but it's my impression. Sprint may have come together as one company under Hesse, but he didn't fully succeed in giving it one identity to the public, as Legere - while hardly as likeable -- as done with T-Mobile. 
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