Team B Critique a case study analysis
Pulling Together to Pull Ahead
Verizon: A Platform for Change
TEAM : B
February 4, 2018
Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
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Wireless
Culture
Making of the Droid
Wireline &FiOS
Verizon Enterprise
Going Global
One Verizon
4G LTE & Ecosystem Development
Connected Home
Outline
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Introduction
Verizon Communication Inc. is a holding company that, through its subsidiaries, provides communication, information and entertainment products and services to consumers, businesses and governmental agencies.
Under the combined leadership of Ivan Seidenberg and Lowell McAdams the organization experienced tremendous transformation and growth. Challenged by rapid technological advancements, changing regulatory requirements, competitive markets and increased machine to machine (M2M) capabilities the two leaders developed a strategy that would ensure the organizations future. Implementing transformational organizational changes touched all aspects of Verizon’s business sections and organisational structure.
Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Wireless
Ivan Seidenberg was the long-time Chairman and CEO who led multiple mergers when the regulated monopoly known as the Bell system broke up. The multiple mergers culminated in the renamed Verizon in 2000.
Lowell McAdam became COO of Verizon Wireless in 2000 and was selected from a long list of internal and external candidates to eventually succeed Seidenberg.
The U.S. and global telecommunications industry had been shifting quickly. The number of wireless customers continued to grow year over year while landline and wireline voice revenues would flatten and even shrink.
Since the wireless business was in a formative stage Seidenberg and his team decided to separate the wireline and wireless companies to keep it protected while it formed.
By 2003 Verizon built the first national broadband network, launched its 3G network in early 2007, and 4G in 2010 (Kanter & Bird, 2012).
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Culture
Verizon’s wireline business culture was known for being slower, more bureaucratic, and, as a former monopoly, less customer centric.
Although the amount of unionized workers declined by roughly 50%, unionized workers still made up about half of their employees, primarily as frontline workers and technicians.
Verizon’s wireless culture was more flexible, faster, and more entrepreneurial.
When Verizon purchased MCI in 2005 Verizon Business was created within wireline. They also added 30,000 MCI employees with a new mindset.
The integration of MCI contributed to Verizon’s cultural transformation. MCI, with its unregulated history already had an entrepreneurial culture.
This was the beginning of a cultural shift not only in wireline but also in wireless enterprise (Kanter & Bird, 2012).
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Making of the Droid
2007 Apple launch IPhone with AT&T
Verizon can not compete with new product offering
Verizon’ s Strategic Partnership
Verizon, Google & Motorola partner on new product offering
Barriers to Success
Verizon’s Monopolistic Culture
Serial development
Shortened Development & Production Timeline
Partnership Strategy ( Compromise, Performance Monitoring & Communication )
Verizon relinquished some control & actively engaged partners.
Collaborative development plan, division of labour & responsibilities, extensive communication framework.
Move from Serial to Simultaneous development.
Verizon commits to advance purchase of untested product - $100 M investment.
Motorola pre-builds handsets without proven software from Google.
Successful Launch
Verizon successfully launch the Droid within the 2009 holiday sales timeline.
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Click Picture to View
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Wireline and FiOS
Launch of Fiber-optic Broadband
Decline in Verizon’s voice wireline initiated Fiber-optic broadband in 2004.
Launch of FiOS 2007
Interactive media, integrating TV and Internet
Untapped Potential
2008 Verizon developed open widget platform.
Integration of media platforms like, YouTube, Facebook, etc.
Software Development Kit
External Customers (TV stations) – developed channel add-ons.
Interval Teams ( Improved Department Collaboration )
Improved Customer Service functionality
Order new channels
Network trouble shooting
On demand repairs
Improved new product hand-off between departments
Development of FlexView – expanding video-on-demand to multi-screen and accessible on multiple device platforms
Market Expansion
By 2011 – FiOS expanded to 16M households in 18 States.
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Verizon Enterprise
The challenge was unifying wireline and wireless to present one face to enterprise customers to provide complete telecommunication solutions while improving services and reducing internal competition.
Service was improved by horizontal integration. For example, Verizon acquired the expert cloud computing company Terremark rather than attempting to develop the technology on their own.
Internal competition was reduced by removing silos and recategorizing their top 500 companies by industry rather than region
Presenting as one face, rather than two separate companies, Verizon restructured several sectors from technological components to market segments.
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Going Global
The challenge in going global was not just how to expand wireless but how to expand wireline as well.
The expansion of wireline was achieved through the installation of global wireline connections such as the submarine cable SEA-ME-WE4 and the Europe India Gateway cable.
The expansion of wireless was achieved by creating international partnerships like the one created with China mobile, the world's largest wireless operator.
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
One Verizon
The challenge was to unify both wireline and wireless to prevent internal competition that cannibalized Verizon's own company.
This was achieved by a complete change of culture. CEO McAdam issued a company-wide credo to remove the barriers between wireline and wireless.
The company-wide credo encouraged the individual groups to work together.
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
4G Lte & Ecosystem Development
Significant business growth presented itself through opportunity, technology and innovation.
A new spectrum released by the FCC held significant potential for wireless carrier network expansion and rights were purchased for $8.6 billion dollars.
Verizon introduces the LTE Innovation Center to promote the co-development of the ecosystem in hopes of beating the competition to market by two years.
Led by Richard Lynch, CTO and Shaygan Kheradpir, CIO a team was formed to drive the company's future
Leveraging both internal (employee input and feedback) and external input (via forum) Verizon set an aggressive goal for a January 2010 launch.
Prior to rollout Verizon invested “60,000hrs of 4G LTE technology and device training to their front line sales and service reps” (Freifeld, 2012) to ensure a successful launch.
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Connected Home
Connected Home or 4 Home was an R&D project that looked at controlling and monitoring the home
This included security monitoring, external and internal lighting, temperature control and a host of other products
Presently run through “wireline” the organisation believed that the real potential lay in a “wireless” solution.
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The wireless concept was run through newly created innovation center that had recently launched the very successful 4G LTE network
A departure from the old silo mentality “Verizon Wireless' ongoing work with 4Home through the Innovation Center is a great example of how a collaborative approach
4Home launch was quite successful and later sold to Motorola
Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Conclusion
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Financial Success* (2006-2010)
Operating revenue increase year over year (21%)
Cash dividends increase year over year (20%)
Domestic Wireless revenue increase year over year (29%)
Wireline revenue sustained year over year
Increased stock price performance
Transformational Success
Verizon leadership recognised that transformational change can only be realised via employee involvement.
Team oriented
Leadership supported
Employee engagement
Employee inclusion
Silo mentality broken down
Process and content driven change
* See Exhibits 1-3
Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Moving Forward
What would your team do next to ensure the organization remains viable and the organizational culture remains stable?
Continue to build an ‘innovation culture’ as it creates change in the environment that other organizations must respond to and therefore can become a sustainable competitive advantage
Continue to move from a vertical to a horizontal organisational structure to ensure that all elements of the business are working together
Promote, develop and implement agile methodologies that are:
people-focused and commutations-oriented,
flexible (ready to adapt to expected change at any time),
speedy (encourage rapid and iterative development of the product in small releases),
lean (focuses on shortening timeframe and cost and on improved quality),
responsive (reacts appropriately to expected and unexpected changes), and
learning (focuses on improvement during and after product development)
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
References
Freifeld, L. (2012, February). VERIZON’S NEW NUMBER IS 1. Retrieved from Trainingmag.com: https://trainingmag.com/content/verizon%E2%80%99s-new-number-1
KANTER, R. M., & BIRD, M. (2012). Transforming Verizon: A Platform for Change. Boston: Harvard Business School Publishing.
Spector, B. (2013). Implementing Organizational Change. New Jersey: Pearson Education.
Staggs, L. (2016, September 08). Verizon Maintains Network Leadership With Advanced Wireline and Wireless Technologies and Expanded Infrastructure Capabilities. Retrieved January 25, 2018, from http://help.verizon.com/about/news/verizon-expanded-infrastructure-capabilities
Verizon Wireless. (2011, January 5). 4Home and Verizon Wireless Showcase Connected Home Services for 4G LTE Network. Retrieved from PRNewswire.com: https://www.prnewswire.com/news-releases/4home-and-verizon-wireless-showcase-connected-home-services-for-4g-lte-network-112939074.html
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Exhibit 1 – Financial Highlights
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Exhibit 2 – Business Units Financial Performance
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
Exhibit 3 – Stock Performance
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Confidential and proprietary material for authorized Verizon personnel only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.
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