The crowd in the ballroom at the Westin New York at Times Square on this February afternoon is in a partying mood well before sundown. They’re enjoying the buzz of being an elite crew: some 200 employees handpicked by managers as top performers. They’re nodding their heads to a pounding soundtrack (Beck’s “Wow,” “Havana” by Camila Cabello and Young Thug, some Coldplay). They’re competing in cheering contests. And they’re antsy for the big moment when they’ll pull the triggers that set off a fusillade of confetti cannons.
This is definitely not what most companies do on quarterly earnings day. But the company hosting this bash is T-Mobile (TMUS, +0.96%), the formerly downtrodden wireless carrier—where rebounding employee morale and rising revenue are almost inextricably linked.
After one last cheer-off, the star of the show arrives. John Legere, T-Mobile’s tirelessly trash-talking, 59-year-old CEO, stalks in with a phalanx of senior execs, to the beat of a standing ovation. He quickly gets to the point: “Rowdy crowd? There’s a good reason to be rowdy … We announced results today that were just phenomenal, the best financial results since I’ve been CEO here.”
It’s true: Despite a year marked by a major disappointment—merger talks with rival Sprint broke down in November, with no deal—the numbers T-Mobile has just announced are formidable. Its 2017 revenue was $40.6 billion, up 8% from 2016, and more than double its total in 2012, the year Legere took over; net income, meanwhile, reached a record $4.54 billion. While it remains far behind Verizon (VZ, -0.44%) and AT&T (T, +0.66%) in number of subscribers, T-Mobile, which makes its debut on the Fortune Best Companies list this year, has undeniable momentum. It’s intent on shaking up both the wireless world—it has its eye on other acquisitions—and the cable industry, with a tantalizing move into mobile video.
That success, insiders and industry experts agree, is fueled by rah-rah rallies like this one. The crowd chants “Are you with us?,” a slogan from the diversity-themed ad T-Mobile unveiled during the Super Bowl. The confetti cannons do indeed fire confetti. And then it’s question time: For 30 minutes, Legere and his team field inquiries from employees in the ballroom and others watching via webcast. Legere keeps the pace rapid and the tone solicitous, doling out cash rewards (peeled off a stash of rolled-up $20 bills) for those brave enough to query him. Some questions are jokey (Have we bought stock in confetti cannons?), but others are sincere and probing. Afterward, dozens of employees line up to shake hands with the CEO and pose with him for pictures. Legere hangs around for almost half an hour until the entire line gets through.
“He’s like an amazing person, different from everyone I’ve ever seen as a CEO,” Donald Smith, who works in a T-Mobile store in the Bronx, says after snapping a selfie with Legere. “He seems like he actually cares.”
Legere certainly cares about making a ruckus. Famously brash and competitive, he’s best known for castigating his competitors (he routinely dismisses AT&T and Verizon as “dumb and dumber”), uttering public profanities, and engaging in the occasional Twitter war—including with then-candidate Donald Trump, in 2015, in a spat over tweets in which Trump criticized mixed-martial-arts star Ronda Rousey. (After the election, Legere said he had “got way past” the feud and was optimistic about the impact of a less restrictive regulatory climate.) Still, there is method to Legere’s madness, and it has helped T-Mobile become the fastest-growing and best performing wireless company during his tenure.
Legere came on as CEO at the end of 2012, a low point for the company. T-Mobile, then a subsidiary of Deutsche Telekom, was shedding customers as it waited to be acquired by AT&T—only to see regulators block the $39 billion deal. Legere quickly shored up the business with savvy moves. T-Mobile got a deal with Apple to sell the iPhone. It bought more spectrum rights to improve its network. And in 2013 it went public, so its stock could be used for dealmaking. (Deutsche Telekom remains the majority owner.)
Just as key to T-Mobile’s success was its decision to make an enemy of its own industry, launching a messaging war in which Legere’s f-bomb-throwing was central to the assault. (Its opponents’ flacks used to respond with indignation; now they rarely take the bait.) The strategy: Get rid of typical plans and prices. Embrace customer desires and eliminate their pain points. That meant no more two-year contracts, no more roaming fees, no more incomprehensible charges at the bottom of every bill. Most significantly, T-Mobile was far ahead of AT&T and Verizon in 2016 in scrapping monthly data limits and the annoying overage charges they generated—forcing its bigger rivals to follow suit.
The numbers show how well it all worked: Boosted by its 2013 acquisition of MetroPCS, T-Mobile’s subscriber base has grown faster than any other carrier’s, to 73 million. Since going public as part of that deal, its stock has soared, trouncing its rivals. Perhaps most important, its customers are loyal: According to a recent survey by Business Insider’s BI Intelligence, almost one-quarter of T-Mobile’s customers say they would never switch to a competitor for any reason, vs. 16% of AT&T’s customers, 15% at Verizon, and just 7% at Sprint. (...)
Legere’s first CEO stints, at the Asian unit of telecom-services company Global Crossing and then at the parent company, were anything but fun. As the Internet and telecom bubbles burst, Global Crossing careened into bankruptcy, and Legere laid off thousands of employees. The company’s Asian unit also paid to settle two sexual discrimination complaints during Legere’s tenure, after female employees alleged that Legere made belittling remarks and behaved aggressively in the company’s offices. (Legere did not comment on the settlements at the time; T-Mobile declined to comment for this story.) Managing the company’s decline took years, and Legere stayed on until he engineered its sale in 2011.
At T-Mobile he got to start over, at one of the biggest brands in a fast-growing industry—one with a major image problem among consumers. His first move as CEO was to draft a manifesto which began, “We’re not like the other carriers … we are unapologetically the un-carrier,” and included lines like, “We will give customers new phones right now instead of later.” Early on, Legere had a line installed in his office to listen in on customer service conversations, which he would do for hours, often late into the night. Most of his “un-carrier” ideas, like getting rid of contracts or dumping fees, came from listening to customers talk with staffers. “My entire strategy that I coined early on,” he says, “was listen to employees, listen to customers, shut the fuck up, and do what they tell you.”
T-Mobile is doubling down on “do what they tell you” under an effort called “Team of Experts,” which has given call-center employees unprecedented authority. Under the plan, which launched last year, T-Mobile divided its customers into blocks of about 120,000, who are each assigned to a specific group of a few dozen employees at a specific call center. When customers call for support, they are routed to their assigned team, instead of being assigned to a random rep at the least busy center in the country, as is typical in the industry. There’s no transferring of calls elsewhere in a frustrating ducking of accountability. Reps are held responsible for the outcomes of their customer group, measured by metrics such as how frequently customers defect to another carrier or how often they call support, and reps and their managers are empowered to hand out service credits or alter bills.
“People in the industry told us we were crazy to do non-randomized routing,” says Callie Field, T-Mobile’s executive vice president in charge of customer care. But T-Mobile’s cost to serve customers has dropped by 9% overall since it was implemented, while customer satisfaction scores increased by 20 percentage points, Field says. Legere says that the customer-care team’s new responsibilities give them even more data they can use to assess how promotions are going or whether customers understand new plans. “These people talk to 20 customers a day; that’s your gold mine.” (...)
At an event in Nashville in early February for retail-store employees, Legere made a surprise appearance. “He walked in the door, and you would have thought it was Snoop Dogg,” says attendee Lindsay Carter, a store manager from Atlanta who was recently promoted to a regional sales job. In a Q&A session, Carter had a big question for the CEO. You completely dominated this industry in five years, she asked; in your next five years, are you going to run for President? “Uh, no,” Carter says he replied, as he handed her a $100 bill.
Support for the frontline staff goes far beyond the freebies. All employees get tuition assistance and paid time off. T-Mobile started offering spousal benefits and insurance coverage for gay couples even when it wasn’t legally required to, and it enforces a nondiscrimination policy that protects LGBTQ employees. The company was the lead sponsor for last June’s NYC Pride, one of the largest LGBTQ events in the country. “It’s not about trying to sell phones,” says Chris Frederick, managing director at NYC Pride, of T-Mobile. “It’s creating an inclusive culture year-round.”
This is definitely not what most companies do on quarterly earnings day. But the company hosting this bash is T-Mobile (TMUS, +0.96%), the formerly downtrodden wireless carrier—where rebounding employee morale and rising revenue are almost inextricably linked.
After one last cheer-off, the star of the show arrives. John Legere, T-Mobile’s tirelessly trash-talking, 59-year-old CEO, stalks in with a phalanx of senior execs, to the beat of a standing ovation. He quickly gets to the point: “Rowdy crowd? There’s a good reason to be rowdy … We announced results today that were just phenomenal, the best financial results since I’ve been CEO here.”It’s true: Despite a year marked by a major disappointment—merger talks with rival Sprint broke down in November, with no deal—the numbers T-Mobile has just announced are formidable. Its 2017 revenue was $40.6 billion, up 8% from 2016, and more than double its total in 2012, the year Legere took over; net income, meanwhile, reached a record $4.54 billion. While it remains far behind Verizon (VZ, -0.44%) and AT&T (T, +0.66%) in number of subscribers, T-Mobile, which makes its debut on the Fortune Best Companies list this year, has undeniable momentum. It’s intent on shaking up both the wireless world—it has its eye on other acquisitions—and the cable industry, with a tantalizing move into mobile video.
That success, insiders and industry experts agree, is fueled by rah-rah rallies like this one. The crowd chants “Are you with us?,” a slogan from the diversity-themed ad T-Mobile unveiled during the Super Bowl. The confetti cannons do indeed fire confetti. And then it’s question time: For 30 minutes, Legere and his team field inquiries from employees in the ballroom and others watching via webcast. Legere keeps the pace rapid and the tone solicitous, doling out cash rewards (peeled off a stash of rolled-up $20 bills) for those brave enough to query him. Some questions are jokey (Have we bought stock in confetti cannons?), but others are sincere and probing. Afterward, dozens of employees line up to shake hands with the CEO and pose with him for pictures. Legere hangs around for almost half an hour until the entire line gets through.
“He’s like an amazing person, different from everyone I’ve ever seen as a CEO,” Donald Smith, who works in a T-Mobile store in the Bronx, says after snapping a selfie with Legere. “He seems like he actually cares.”
Legere certainly cares about making a ruckus. Famously brash and competitive, he’s best known for castigating his competitors (he routinely dismisses AT&T and Verizon as “dumb and dumber”), uttering public profanities, and engaging in the occasional Twitter war—including with then-candidate Donald Trump, in 2015, in a spat over tweets in which Trump criticized mixed-martial-arts star Ronda Rousey. (After the election, Legere said he had “got way past” the feud and was optimistic about the impact of a less restrictive regulatory climate.) Still, there is method to Legere’s madness, and it has helped T-Mobile become the fastest-growing and best performing wireless company during his tenure.
Legere came on as CEO at the end of 2012, a low point for the company. T-Mobile, then a subsidiary of Deutsche Telekom, was shedding customers as it waited to be acquired by AT&T—only to see regulators block the $39 billion deal. Legere quickly shored up the business with savvy moves. T-Mobile got a deal with Apple to sell the iPhone. It bought more spectrum rights to improve its network. And in 2013 it went public, so its stock could be used for dealmaking. (Deutsche Telekom remains the majority owner.)
Just as key to T-Mobile’s success was its decision to make an enemy of its own industry, launching a messaging war in which Legere’s f-bomb-throwing was central to the assault. (Its opponents’ flacks used to respond with indignation; now they rarely take the bait.) The strategy: Get rid of typical plans and prices. Embrace customer desires and eliminate their pain points. That meant no more two-year contracts, no more roaming fees, no more incomprehensible charges at the bottom of every bill. Most significantly, T-Mobile was far ahead of AT&T and Verizon in 2016 in scrapping monthly data limits and the annoying overage charges they generated—forcing its bigger rivals to follow suit.
The numbers show how well it all worked: Boosted by its 2013 acquisition of MetroPCS, T-Mobile’s subscriber base has grown faster than any other carrier’s, to 73 million. Since going public as part of that deal, its stock has soared, trouncing its rivals. Perhaps most important, its customers are loyal: According to a recent survey by Business Insider’s BI Intelligence, almost one-quarter of T-Mobile’s customers say they would never switch to a competitor for any reason, vs. 16% of AT&T’s customers, 15% at Verizon, and just 7% at Sprint. (...)
Legere’s first CEO stints, at the Asian unit of telecom-services company Global Crossing and then at the parent company, were anything but fun. As the Internet and telecom bubbles burst, Global Crossing careened into bankruptcy, and Legere laid off thousands of employees. The company’s Asian unit also paid to settle two sexual discrimination complaints during Legere’s tenure, after female employees alleged that Legere made belittling remarks and behaved aggressively in the company’s offices. (Legere did not comment on the settlements at the time; T-Mobile declined to comment for this story.) Managing the company’s decline took years, and Legere stayed on until he engineered its sale in 2011.
At T-Mobile he got to start over, at one of the biggest brands in a fast-growing industry—one with a major image problem among consumers. His first move as CEO was to draft a manifesto which began, “We’re not like the other carriers … we are unapologetically the un-carrier,” and included lines like, “We will give customers new phones right now instead of later.” Early on, Legere had a line installed in his office to listen in on customer service conversations, which he would do for hours, often late into the night. Most of his “un-carrier” ideas, like getting rid of contracts or dumping fees, came from listening to customers talk with staffers. “My entire strategy that I coined early on,” he says, “was listen to employees, listen to customers, shut the fuck up, and do what they tell you.”
T-Mobile is doubling down on “do what they tell you” under an effort called “Team of Experts,” which has given call-center employees unprecedented authority. Under the plan, which launched last year, T-Mobile divided its customers into blocks of about 120,000, who are each assigned to a specific group of a few dozen employees at a specific call center. When customers call for support, they are routed to their assigned team, instead of being assigned to a random rep at the least busy center in the country, as is typical in the industry. There’s no transferring of calls elsewhere in a frustrating ducking of accountability. Reps are held responsible for the outcomes of their customer group, measured by metrics such as how frequently customers defect to another carrier or how often they call support, and reps and their managers are empowered to hand out service credits or alter bills.
“People in the industry told us we were crazy to do non-randomized routing,” says Callie Field, T-Mobile’s executive vice president in charge of customer care. But T-Mobile’s cost to serve customers has dropped by 9% overall since it was implemented, while customer satisfaction scores increased by 20 percentage points, Field says. Legere says that the customer-care team’s new responsibilities give them even more data they can use to assess how promotions are going or whether customers understand new plans. “These people talk to 20 customers a day; that’s your gold mine.” (...)
At an event in Nashville in early February for retail-store employees, Legere made a surprise appearance. “He walked in the door, and you would have thought it was Snoop Dogg,” says attendee Lindsay Carter, a store manager from Atlanta who was recently promoted to a regional sales job. In a Q&A session, Carter had a big question for the CEO. You completely dominated this industry in five years, she asked; in your next five years, are you going to run for President? “Uh, no,” Carter says he replied, as he handed her a $100 bill.
Support for the frontline staff goes far beyond the freebies. All employees get tuition assistance and paid time off. T-Mobile started offering spousal benefits and insurance coverage for gay couples even when it wasn’t legally required to, and it enforces a nondiscrimination policy that protects LGBTQ employees. The company was the lead sponsor for last June’s NYC Pride, one of the largest LGBTQ events in the country. “It’s not about trying to sell phones,” says Chris Frederick, managing director at NYC Pride, of T-Mobile. “It’s creating an inclusive culture year-round.”
by Aaron Pressman, Fortune | Read more:
Image: Ian Allen
