Some folks get a thrill watching thoroughbred horse racing. Others can’t get enough reality TV. Geeks just love their gadgets and apps. Me, I get a real kick out of watching a top-notch CEO get to work on a ridiculously tough and challenging turnaround.
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Yes, I know how strange that sounds. And no, my mother did not drop me on my head as a child.
Few management experts would argue successful corporate turnarounds are a rare and beautiful thing. Maybe they’re not quite as rare as a Triple Crown winner like Secretariat or Seattle Slew, but they are equally impressive and inspiring to watch, if you’re into that sort of thing.
The big deal about turnarounds, however, is how instructive they are in teaching executives how to deal with the myriad of issues, some potentially catastrophic, that crop up from time to time. Make no mistake, every company, big or small, will at some point need an experienced hand to help it dig its way out of trouble. It’s inevitable.
If you want to learn how it’s done, there’s a great class currently in session: Softbank chairman Masayoshi Son’s turnaround of Sprint.
Having followed Sprint since it’s ill-conceived merger with Nextel, I’ve been harshly critical of Dan Hesse’s turnaround efforts since taking over as CEO from Gary Forsee in late 2007. And while many think Hesse has done a great job – including Hesse – I’m anything but a fan.
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Now you can see why.
Under Hesse, Sprint lost major subscriber share to Verizon, AT&T, and even T-Mobile. It’s piled up nearly $20 billion in losses. And, until Softbank announced its intent to pony up $22 billion to buy 70% of the company, the stock has been brutally hammered, trading off and on near all-time lows.
Enter Masayoshi Son. Once the acquisition was complete in July 2013, the uber-aggressive entrepreneur took this sleepy, Kansas City-based telecom company by the reins and shook up its complacent management team in a bold attempt to reverse what Son calls a “loser” mentality, according to the Wall Street Journal.
As challenges go, there’s none tougher than changing a long entrenched company culture. But if anyone can do it, it’s Son. The gutsy risk-taker is no stranger to David versus Goliath battles and he has a long history of winning big in the face of adversity.
Son’s family originally emigrated from Korea and adopted a Japanese surname to avoid discrimination in ethnically homogenous Japan. For a time, the young Masayoshi lived with his family in an illegal shack. Those early experiences left Son, now 56, with an enormous chip on his shoulder and a compelling need to prove himself against all odds.
In the late 70s, Son made his own way to America, got a degree in Economics at Berkeley, got bit by the high-tech entrepreneurial bug, and returned to Japan to start a software distribution firm he called Softbank. He was 24 at the time.
Today, Softbank is a wireless and Internet powerhouse with $40 billion in annual revenues and it’s chairman, Son – who was also an early investor in E-Trade, Yahoo, and China’s Alibaba Group – is reported to be the second richest man in Japan with a personal net worth of more than $7 billion.
With all he’s accomplished in his life, you’d think the man would take a well-deserved breather, but that’s not in his makeup. On the contrary, Son intends to challenge leaders Verizon and AT&T, and ride Sprint to the finish line, much as he did when Softbank bought Vodafone Japan and took on telecom giants NTT DoCoMo and KDDI in 2006.
Never mind Hesse is still Sprint’s CEO. That appears to be purely perfunctory as Chairman Son is clearly the man in charge of this turnaround. He’s splitting his time between Tokyo and a secondary Sprint headquarters he’s set up in Silicon Valley where he grills Sprint executives on every aspect of the company’s operation.
Since taking over, Son has relentlessly challenged company leaders to come up with a new wireless family plan to grow market share, overhaul what he’s called a “stupid” advertising strategy, and track sales data in real time.
He’s spending billions to upgrade Sprint’s aging network. And he’s made no secret of his interest in merging with T-Mobile.
Along the way, Sprint has quietly parted ways with its network, marketing, and sales heads in order to shake things up and speed the transformation of its culture.
Make no mistake; turning around Sprint in an effort to upend the U.S. telecom market is the toughest challenge Masayoshi Son has ever undertaken. And while the odds are long, I, for one, will not be betting against him.