Sprint’s Turnaround CEO: Insights from Dan Hesse

In this edition of Making Waves, I have the distinct honor of featuring Dan Hesse, someone I’ve known and admired for many years. Our paths first crossed during his time at AT&T, and I’ve followed his remarkable career since, including his leadership at Sprint, where as the CEO, he led one of the most impressive corporate turnarounds I’ve ever seen. Dan’s approach to leadership, particularly in blending and uniting company cultures and holding people accountable, resonates deeply with me. Beyond his corporate success, Dan has always been ahead of the curve with technology, from telecom to his current role as Chairman of Akamai, a leader in cybersecurity and AI. As someone who also appreciates the role of technology in transforming industries, I’m excited to share this conversation where we explore Dan’s journey, his leadership philosophy, and his vision for the future in an increasingly tech-driven world.

Full Interview:

Hal:

Today. I have the pleasure of speaking with Dan Hesse, an iconic CEO, an unbelievable life story in business. He headed up AT &T’s international network systems. Then I guess he was extracted and became chairman and CEO of Sprint, where I first had the chance to, well actually the second time I met Dan. And now is chairman of Akamai. He’s on a number of boards, PNC Financial is one of them. I believe he’s very much involved in the Boy Scouts, Boy and Girl Scouts. And he’s had a career that spans a number of companies. And what I found interesting was Dan also was named the best turnaround CEO in America. I suppose that had to do with Sprint, which he was exceedingly successful in leading. So, Dan, describe this journey of being a…officer and executive of very very large companies and going from one to another especially when they were competitors.

Dan:

Well, I, you know, if I just summarize kind of my career, was trailblazing. One interviewer kind of referred to me as the Forest Gump of telecom…[I] was just so fortunate to be in the industry at the time and have the jobs that I did, but I got to be on the front lines of an industry that evolved tremendously from the late seventies to let’s say about 10 years ago when I retired.

Hal:

And so how were you received when you first went to Sprint having come from from AT & T? I’m always interested in how companies and spend time with their new CEO.

Dan:

Well, there’s a saying that never waste a good crisis. So, when I came to Sprint, everybody knew the company was in trouble. So, they were very receptive to new leadership. And the other reason I think I was well accepted when I got there is Sprint’s problems at the time that I came in were really attributable to a merger of equals between Sprint and Nextel.

…And there was still conflict of those two cultures because the company was made up pretty much 50 50. The board was 50 50. It had two headquarters and operating headquarters, the former sprint headquarters, a corporate headquarters, the former next tail headquarters. And I came in as a neutral party who knew the business. So, I was accepted by, we’ll call it the next tail team and accepted by the sprint team because I wasn’t from the other side. So, it helped me bring the two together and go really create one culture at Sprint Nextel versus two competing cultures.

Hal:

Yeah, you know, for years people have been talking about culture and its importance and by far it certainly is. But you had two cultures, like you said, that you had to kind of bring together. And did you feel that you were able to create and influence the new culture to what you wanted the culture to be?

Dan:

Yeah, very much so….and [it] was really an opportunity, the thing was everybody there recognized at Sprint when I arrived that that was a problem that, because in the first two sentences, people would tell me that whether they were legacy Sprinter, legacy Nextel. So, I addressed all the, all the employees at kind of these all-employee meetings in a big auditorium, but it was also simulcast to all our locations across the country and said, we’re going to create one new culture with, from a blank sheet of paper. I’m going to send out 25 attributes that I’ve seen as part of the best cultures, the best companies in the world. And we’re going to pick 10 of them. And I want to know what you think. So, you’re going to vote to tell me, number one, what kind of culture you think will win. And number two, what’s the culture of the company you want to work for? That’s the lens I want you to put on it. Tell me what you think. I did tell them though; I was getting their input really on nine of them because one of the items was going to be accountability. Because I saw that is missing. I think that’s crucial in culture and the CEO, my job is I’m accountable for culture. If the culture isn’t strong and it’s not working, that’s on me. I’m accountable. I’m to blame. So, I wanted to make that clear. And so I…think engaging the people in the culture, letting them vote, have a part of it. But also, I think what makes culture strong is measuring the culture and reporting on it, just like every other…know, revenue, profit expenses. So, at every quarterly meeting, you know, we would send every quarter, we had the 10 attributes of our culture. We would do a survey. How are we doing on each of these 10? And I would report and you’d see whether it was going up or down. So, everybody in the company knew we really were serious about culture. And I also had a good gauge on how we were doing and where we were weak. And so, the cultural metrics improved over time. But I think that the real key was engaging people in getting to choose the culture that they thought would win and that reflected a company they wanted to be a part of.

Hal:

Yeah, that’s brilliant. I’ve always said, you know, you can’t delegate an emotion and culture is very emotional. So by asking them what they want as opposed to saying, okay, here’s the culture. It’s a great one. I thought about it. It’s worked. And here are our core values and our this and that and what have you. And, you know, people just look at that and say, more corporate America….to be as spread off the bat. mean, that I think very much endeared you to the folks that you were leading at that point.

Dan:

Well, sometimes maybe they didn’t enjoy the accountability part so much. Because by the way, the flip side of accountability is delegation and empowerment. You can do that. And they like that part, but they quite frankly, I say that kind of tongue in cheek. They like being held accountable…if you are responsible, if it’s your decision, you’re getting me accountable for you know, whatever that is, you know, whether that’s successful or not. Not that people can’t make mistakes, because actually you encourage, I would say encourage mistakes, but you certainly don’t punish them, especially if people are taking chances. Now, if everything you do is a mistake, that’s different, but, but you’re, you’re allowed those from time to time. But I really see a kind of a,  accountability and delegation as two sides of a coin.

Hal: 

It also sounds to me like emotional intelligence is a critical factor in your leadership and in, well, frankly, anything. Does that play a big role?

Dan: 

It did. You know, so a lot of the cultural attributes like teamwork and camaraderie, you know, that, were in there, you know, having fun, a lot of it had to do with interpersonal relationships, which is really a lot of what emotional intelligence is all about, you know, how do you work well with other people? so, you know, what I learned even in terms of recruiting people, for the company, I just use a couple of examples at, at, you know, at AT & T, which actually is the first time you and I met. You had a travel agency which served our company very, very well. How is we would when we were interviewing people for jobs, we had drivers, we had company drivers that would take we’ll call it people we were trying to recruit to and from the airport. When they came back, we would interview the driver. What was the person like? Did they treat you well? Did they treat you with respect? Were they friendly? Just very recently on a board that I’m on, we had somebody we were recruiting for the board who of course was on their best behavior with the board, but we also had him go have dinner with a few members of management to whom this prospective board member was kind of condescending toward. And we got that feedback. So, they weren’t the right person. these we’ll call it interpersonal attributes are really, really important to creating the right chemistry, which is crucial to having a successful company.

Hal:

Yeah, I couldn’t agree more. Unconventional ways, especially when it comes to recruiting and selecting senior executives. HR, I’ve always felt should be right next to the CEO in that regard because they play such a huge role and can…provide insights that maybe, least in my case, I wouldn’t pick up. I love the way you would ask the drivers. What I would do is I would take a candidate and say, let’s drive out to the mall. But I’d let them drive. And I would just sit there, and I would talk with them. They would think I’m interviewing them, but no, I was literally watching their driving habits and whether or not they could get around traffic jams, things like that. I could only do it with people that knew the roads because some, you know, in any two or three lane highway, there’s always one that just…backed up and people just get behind it and that’s that when you can actually go around and get to where you need. I have always found that that’s important. How do they get around obstacles?

Dan:

Well that’s interesting. I might’ve done okay on that one. Some people used to call me Mario for my driving habits.

Hal:

So, Dan, you get involved right now in a lot of AI stuff, obviously. To me, AI, at least at this point, is like a macro in the moonlight. It stinks and shines at the same time. It can do…

Hal:

Wonderful things and yet it scares the heck out of me in the hands of some kind of nefarious actor. What are your thoughts on AI and is it controllable and is there far more good than bad? How do we live in this new era of AI?

Dan:

I’m one of those and maybe it’s because I’ve come up through the tech industry and everything, we are coming out with new is always feared and people tend to, let’s say the press tends to focus more on the negative than the positive, because that’s what sells papers. I mean, you know that not, you know, they always say if it bleeds, it leads by the way, we do have to take the risks seriously, but I think in terms of the public discourse, the downside is given as overweighted versus the upside. I tend to be more of a glass half full person. So, I think there’s more upside than downside, but we do need to put guardrails in because some of the smartest people in the world, people who have worked on AI said, Hey, you know, this, this could be dangerous if not properly, you know, controlled and managed. And as we know, there are inherent biases in AI because it just takes stuff off the internet and the internet kind of reflects who we are and the stuff that’s out there on the internet. And humans are biased.I mean, we just are. So, some could argue that AI will make better decisions than humans do because we can train AI to be not so biased, would be an example. I am more of a fan of AI. I think it’s going to improve the quality of our lives. Sure, certain jobs will be displaced, but I think even more jobs will be created.

Hal:

It’s good to hear because I know all the good. I just think of some state actor or something that figures out a way to bring down a grid or what.

Dan: 

Yeah. you so I’m, you mentioned Akamai earlier that you, that I’m chairman of, which is a cybersecurity firm. It’s also a cloud computing firm. And know, so we spend a lot of time looking at AI as, know, it does PNC the bank. and let’s just take both, both companies are very concerned about, you know, cybersecurity and cyber attacks. And, you know, the downside is AI will be used by the bad guys. But on the other hand, AI will be the tool we use to beat their AI. I joke, our bots are smarter than your bots. So, I think net net may actually help security overall because it can be used as a defense.

Hal:

I’m pulling for Akamai. Absolutely. I always wanted to go into cybersecurity. I I knew years ago it was going to be critical, but nobody else wanted me to go into cybersecurity. I ended up in healthcare.

Dan: 

They’re both big industries and growing industries. There’ll never be an end to need for healthcare, especially as the demographics of our population, especially in this country and other developed countries, gets older and older. That’s a good industry to be in, but cyber is also a growing industry, no question.

Hal:

Yeah. you know, given all we’ve spoken about, what do you consider your greatest challenge going forward? We’re in an economy, in a business where technology, everything’s changing in, you know, in lightning speed. I used to say time was the currency of the future and, you know, AI helps with time and so on and so forth. So it’s, I think that’s always been true and is true now as, you know, as ever. But we also have to deal with geopolitics in a world that is, you know, having, having issues. And I’m not sure that we’ll ever, you stop but it’s something that a you CEO’s got a you’ve got so many different things you have to think about what do you think is your greatest challenge?

Dan:

For me, as I think about it, and I think it’s because when I look at my career, how much value I got from my mentors and how I learned from them was, know, Yogi Berra had a saying, you can observe a lot by watching. And it’s so true. You just watched how leaders led. And, you know, in the new world with not only all these tools, but post pandemic, there’s so much remote work. There’s not as much people getting together, mentoring, coaching. And as I think of the next generation of leaders, you know, it’s really important to pack, you know, continue to pass it down. And that’s how, you know, I, not to say I’m all that great, but everything that is good about how I lead, learned from others. learned by watching. And I think it’s going to be increasingly difficult to do that. So, my biggest challenge is I sit on boards, and think about it and other things I’m involved in, like the CEO Academy of Kansas City where it’s, you know, a bunch of retired CEOs, each of us have kind of a swim lane. We’re teaching new CEOs and about, you know, and, and those who are close to becoming CEOs, is, it’s just this notion of mentoring and coaching that I think will be more challenging in remote work environments. And for me, it started right off the bat. I mentioned to you that I just was in your neck of the woods giving a talk at Princeton just a couple of days ago. And I think of the mentor that made so much difference to me as somebody in his early 20s, my boss was about a decade older than me. He was a Princeton grad. And I just watched him. And I could have been a very different kind of leader if I didn’t have this ethical, genuine, authentic role model to watch and I’m concerned that this generation won’t have those role models in a remote environment.

Hal:

Yeah, I agree.Now you’re helping everybody through your new podcast. Can you explain a little bit about mentoring and how to reach your podcast? You are giving back in such a huge way.think we want to hear about paying it forward a little bit to ensure that leaders are the type of leaders that have that legacy experience that’s being passed down from people like you who have been through every crisis, every merger, have seen the changes, the evolution of technology and the impact that it has had on business. Without people like you, there is nothing, you can’t pass the baton, especially since so many people are working from home. So I think…

Hal:

In fact, what I love is to, when you talk about mentoring, is people who I used to lead that are now CEOs of other companies.In fact, most interesting is my executive assistant when I was back at Rosemont International. She’s now chief marketing officer for Delta Airlines and she was my executive assistant. I love that because I think businesses provide this opportunity for people to improve their lives, but it also comes from everything you talked about before, the culture, people wanting to come to work, not having to come to work, people that want to; you talk about your mentoring, what you’ve learned from other mentors over the years. I know that you started this academy to help with mentoring up and coming executives and those who, I guess, even are executives that can learn from your experience. Can you talk about that a little bit?

Dan:

You know, and following up on your note, Hal, you know, the CEO Academy, which is going to be held at the University of Missouri, Kansas City in just a few weeks. It’s a two day course for, know, CEOs and aspiring CEOs will have nine former CEOs of the faculty. But what makes me so kind of happy and proud is there are so many students that are CEOs who are my proteges and some that are soon to be CEOs who are also my proteges, if you will, from Sprint. And that makes one feel very good. And I’ve had others like John Ledger, who was the CEO at T-Mobile. He was one of proteges at AT &T. And Dan Schulman, who grew up with me at AT &T and also was at Sprint recently retired as a CEO at PayPal. And I think that, that’s very fulfilling. So, what I’m really trying to do and, you know, those of us in Kansas city have kind of come together to create the CEO Academy is, is pass it on. It’s a way of giving back. You know, we’re all doing this gratis. And if there’s any extra money, it will go to scholarships, at, know, at, at UMKC. we’re, really doing this as a way of giving back. And also the you know, mentioned the mentors radio earlier, which is the podcast that, I do every other show. So, I do every other week. I host somebody who has great lessons for people in business or they could be life lessons, people who have been successful. So I’ve had people from sports like Andy Reed and Joe Montana, admirals and generals, you know, Mike Mullen, former chairman of the Joint Chiefs. Stan McChrystal, who wrote Team of Teens, and a number of CEOs, talk about not only how to be successful and have lessons to pass on to others, but also how to be successful in life.

Hal:

Yeah, which is critically important because that too has an effect on business and the people that you lead. Andy Reed with my son’s football coach, or his sons played when my son was quarterback in high school. They were all on the same team. Great guy. Never should have left Philadelphia.

Dan:

He’s fantastic.  No, it was our gain in Kansas City. Thank you for giving him to us.

Hal:

You’re And hey, thank you for joining me today. This has been very enlightening. People are going to learn from it, which is what this is all about. And I just want to thank you for taking the time to have this conversation and to share your thoughts and your leadership and your ideas and frankly, your way of thinking with our audience. So thank you very much, Dan.

Dan:

Hal, my pleasure and privilege. And it’s wonderful to see you again after all these years. You’re somebody I admire.