Episode 8 - Engaging Customers and Innovation with Dan Hesse

In this episode of Oh, hi! Stories Podcast, I sit down with Dan Hesse, former CEO of Sprint, to talk about leadership, innovation, and transforming industries. From navigating Sprint through a near-bankruptcy turnaround to becoming the face of a brand through bold and unconventional advertising, Dan shares the behind-the-scenes moments that shaped his career. We discuss the power of simplicity in business, how customer-centric thinking drives real change, and what it means to lead with authenticity. Dan also reflects on the evolving telecom industry, the role of trust in leadership, and what today’s companies can learn from his experience.

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About Dana
Dana Berchman is an award-winning expert in marketing and communications with a gift for leading teams, connecting people, and telling the human story.  An experienced innovator, public speaker and media professional, Dana is a proven expert at developing communication strategies, maximizing reach, creating digital roadmaps for cities and organizations, and delivering data-driven results with heart.  

Transcript

Dan, thank you so much for joining me. I am so happy to have you as my very special guest.

Thanks, Dan it's a real pleasure to be here.

Dan, it's been a joy to get to watch your career unfold. We have your sister as a family friend of ours of more than 30 years. And so I've gotten to watch you kind of from afar, but not really because in 2008, I was also living in New York city when. I saw your face on TV in New York doing the sprint commercials when you became the CEO.

And so have always admired your work and, and career. And so I'm just honored as someone that I really look up to as an innovator in this space and obviously in telecom, but also in customer service, which is something I've been really focused on in my career. So thank you so much for taking the time out of your busy schedule to chat with me.

My pleasure.

So let's go back and talk a little bit about your story and your journey. For our listeners that might not know the commercials I'm referencing were quite popular in 2008 when you became the face for Sprint as their CEO. And I thought that was really cool and would love to dive into that a little bit more, but first tell me about the journey to get to that point in your career and, and a little bit more about your story.

Well, I've always been in the telecom industry. So when I got out of school, I started at AT& T. I had a tremendous 23 years there, had 14 assignments, worked all over the world. I had a chance at the beginning, actually it was on one of the, you know, I have a podcast as well. And I interviewed a fellow who 

wrote this tremendous book on Bell Labs, and I got a chance to work with Bell Laboratories and really learn how to innovate and apply technology in a way that would be useful to customers. And that was very much a hallmark of kind of my career. My last job at AT& T, I was the CEO at AT& T Wireless, which at the time was the largest wireless carrier in the U.

S. And I retired from AT& T in 2000, then went and did a startup. I worked for another company and then I ended up at Sprint, as you mentioned I came in right around the Christmas holidays of 2007 and the company was on the brink of bankruptcy. As a matter of fact, my very first day on the job of course the board didn't tell me just how bad things were because they were afraid I wouldn't have taken the job and they were correct.

I would not have if I was, if I knew it was that serious, but the business plan had the company filing for bankruptcy in six months. And I had to do something to try to turn that around. And you talk about the TV commercials. They started in early 2008. We launched something that was very radical and innovative in the industry at the time, which was called Simply Everything.

Because you might remember in 2007, about a year before that, Apple had introduced the iPhone. Of course, which Sprint didn't have. Only AT& T had. Verizon didn't have it, T Mobile didn't have it, Sprint didn't have it, and we needed to compete and do something even simpler than the iPhone. And we came out with simply everything, because at the time, you might recall, data was new, and so if you got your bill from AT& T or from anybody, you had your data charges, you had your text charges, you had your voice charges, it was very complex and quite expensive.

So we came out with a plan that for a flat rate per month, that's what your rate was. No matter what you did, surf to your heart's content, text to your heart's content, call to your heart's content, it's going to be the same price. And that was a radical innovation. That's what I was introducing on television.

I did actually 10 commercials over the period of four years. And then I, I hired a new chief marketing officer and, and part of getting him to come was he said, look, I love your ads, Dan, but I'm not going to leave. Where I am and move to Kansas city just to keep doing the same thing. I want to do something different.

It's totally up to you. And I said, I, I'd really like to have you as my CMO. You know, you come here and do whatever you want and take me off the air if that's what you'd like to do. And that's what he did. And that's when I stopped doing ads.

That's pretty amazing. . And, and what a great lesson, you know, I worked in the government sector too. And I think that's one of my biggest complaints is doing it the way it's always been done. And so how cool that you saw that opportunity made a huge innovation and really became kind of the face of that brand and then let someone come in and take you in a totally different direction as well and put that trust in someone else.

So I, I love that.

Well, you know, I didn't want to be the face of the brand. The ad agency talked me into it uh, because, so when I first came to Sprint and communicated with the employees, we, there's a big auditorium at, at, at corporate headquarters in Overland Park, Kansas, and I would just have these dialogues with the employees.

And one of the employees in the very first meeting said, Dan, what do you think of Sprint's advertising? And I said, you know, I actually don't think much of it because it's, there's not a clear brand position for the company. I said, look, AT& T, it's, we have the iPhone and no one else does. Pretty straightforward.

Verizon, can you hear me now? We have the best network. T Mobile, low price. We're the price leader. Sprint. Hmm. What is it? And I looked around and asked people what, and nobody really knew what, what was the reason to come to sprint. So I said, I don't, I don't like the advertising. The ad agency, I didn't realize this, but they also watched like the rest of the country.

This was live cast to all our locations across the country. The ad agency did as well. And they watched me and they go, Oh, we know, you know, we're in trouble with respect to our, our, our advertising. And so they came to see me right away. And I, I told him, I said, look, you have one week cause I don't want to train a brand new ad agency, but I'll give you one week to come back with a really good campaign storyboards.

And I knew quite a bit about advertising cause of my, my previous roles and how it worked. And they came back a week later and they came back with a storyboards and they had me, you know, walking down the streets of New York and me delivering the message had me in the ads. And I said to him. Look sucking up to the boss.

That isn't, it's not going to work with me. I have no interest in being in the ads. That's not how you're going to keep the job. And they, to which they responded, we got your messages through a tube. We watched you on television. We think you'll come across on television. So I asked him, I said, well how many CEO ads, what percentage of them are successful?

They said one in seven. Six and seven are disasters, but it's, but the ones that are successful are a grand slam. So it's either a strikeout or it's a grand slam. And a lot of the ads that have been run over the years, you don't remember them because that's what we'll do here. If the, if they don't test well right off the bat, we'll take them off the air and we'll go to something else.

But it's, it's, we think it's worth a shot. And To make a long story short, the, the ads worked extremely well because what happens is it lends a level of authenticity to the brand and the message when the people who are watching it know it's the CEO of the company or somebody from the company, it's not some actor or some spokesperson, it's really someone from the company.

And in this case, speaking my own words in each ad, I made sure they were my own words. They would suggest my advertising team and the agency, this is kind of the message, and then I would rewrite it the way I would say it. Because I didn't read anything, there was no reading, there were no cue cards. I just walked down the street and said it the way I would say it, so it came across, I think, more authentically and as a result it they worked.

But yeah, it was not my objective to be the face of the brand, but I was stuck being that and my security guys hated it because I was recognized everywhere and people would come up and take selfies no matter where I was. And of course I enjoyed it, but but my security guys didn't enjoy it very much.

Yeah. I think it's amazing, and I love this idea about the authentic message being communicated from you at the top, because this was your radical, innovative idea about how you were going to transform the world. This industry, not just that company, but you were speaking to everyone, not just a Sprint customer, but I know you were speaking to me personally and, and so many others.

And that's what I'm always talking about in the work that we do is, you know, get as close to the source as you can. And I've tried to do that in my work as much as possible. And so I think it's a perfect example of How, when, like you said, you were using your words, it wasn't something that was scripted and it was timely.

You came in with an idea of how to, you had a six month window to save this company and one week for your advertising agency to help you to do that. And you did it. And then you transformed the whole industry. It wasn't just Sprint, but these ideas that you brought, which is something I think a lot about in the work I did, even in the city space was I always wanted it to be replicated.

I was always hoping that other cities would do a digital state of the city address and take their mayor and, you know, put them on camera instead of behind a podium. And I was always thinking about how. The work that I could do could be shared across an industry. And, and you really did that. You transformed how we, you know, I think about by minute or roaming charges or all of those things.

And so. Talk to me about that. And I know there was an idea written on a napkin. I love this story too, that you had initially and something, you know, a monthly rate and whatever that was. And then how that idea not only transformed and brought back a company on the brink, but spread to all of your competitors and, and transformed this whole industry.

Well, you know, it really happened earlier in the wireless world and actually goes back to my earlier days at AT& T. One of the things I. I learned was that customers crave simplicity and they'll pay a premium because this is about a company and how it makes money. You can charge more if you just make it really simple.

If you don't nickel and dime, you know, if it's like, for example, if returns are easy, if the service is good. Just make their lives simple. That's really what they want. And I I launched the internet division years ago at AT& T. I was called by the, by the CEO at the time I was actually in Europe and he goes, you know, I want to bring it back to the States.

There's this, this is like 1995. There's this debate going on the internet. Should we be in the internet business? Should we not be in the internet business? Cause it was very small back then. There was a big debate whether it was this year's fad, like the Citizens Band Radio, I'm probably dating myself with you and, and others in the audience that don't even remember that, but it was like this monster fad and then just went away.

And it was very complicated back then and what as the head of WorldNet, when we launched the AT& T's product in January of 96, our internet product, decided just to have it as a flat rate because there was a metered rate. So if you, for example, today, imagine you go online. And we're being charged per minute.

That's the way every internet service was from AOL to every other one. You were charged per minute while you're online. I mean, why don't we just charge this case 20 a month and let people do whatever they want, go on when they want, stay on surf, go. And it was so simple that my bill was going to be 20 every month that we went with it and it did really well.

So then when I went to AT& T wireless. At the time I was the CEO there. I came out in 97, we launched it in early 98. To me, it was really complicated because if let's say I was in Seattle, which was where I lived, if I was making a local call, it was a cents a minute making a long distance call. It was B cents a minute.

If I was traveling, let's say I was in New York making a local call. It was C cents a minute. If I was making a long distance call, it was D cents a minute. And then by the way, if I went to another, even another city, like a small town in upstate New York, it was all a different rate of minutes. You had no idea what your bill was till the end of the month.

So we came out with something called digital one rate, which again was in almost all these cases, I leverage technology. That's what's behind the scenes. That's what makes the innovation possible. It's not just. Well, no one thought of making something simple. You couldn't make it simple because you didn't have the capability or wherewithal or technology to make it so that it could be simple for customers.

So we launched Digital OneRate in 1998 where, again, it was just a bucket of minutes. You bought a bucket of minutes, this many minutes for 90, this many minutes for 120, and a minute was a minute. It didn't matter who I was calling or where I was. And if you might recall back then, Almost all calling when you left your town, nobody took your cell phone with you because it was so expensive to travel with it.

You'd go to an airport and there would be a line a mile long at every payphone lining up to be able to use the payphone to make a call because no one took their cell phone with them or you go to your hotel, use your calling card. You wouldn't use your cell phone. What it completely changed the dynamic.

We came out with this and then all of a sudden a mobile phone, Was a mobile device. We did because the industry was in essence of penalizing mobility rather than encouraging mobility. And that was our whole business. You know, we just made it really expensive. If you ever moved with it, it was only reasonable if you never moved.

So that was the background I had when I got to sprint. And I saw, I said, I've seen this movie before. I saw it. In the internet

hmm.

I saw it in this case with digital one, right? It was 2G. Here we are 10 years later with 3G with data being added to the mix of complexity for wireless. It's the same movie all over.

How can we make it simple? And in all these cases we applied technology to the application in a way that's so for our customers, if you will, they didn't see what was behind the curtains. You know, the wizard of Oz,

Yep.

see that. It was just simple for them. And anyway that's that's my story.

I love that. I talk about this all the time. I think, especially I've worked again in both the public and the private sectors, but especially in government, you'll see, you'll see. the city level to a lot, they'll throw a lot of money at technology with no idea of how to implement it, not the right staff to implement it, not how to use it. I remember when we built our first open data portal, which was a huge piece of kind of data storytelling in this space. And I said exactly that about the wizard and someone said, Oh, well, if they pull back the curtain, it's not going to be that pretty. I said, the user isn't seeing that, right?

The customer experience of what they have when they come here. And I think this is, there is a huge disconnect in what you talk about is a lot of, What I see of,, tech projects living in a basement of an I. T. department, but can't get it into the hands of the customer and some of the magic.

I think we found was kind of taking some of those pieces from these I. T. teams and talking about how we. Combined all of our efforts to communicate outwardly to the customer and kind of centralizing, whether it was reporting an issue through our 311 system of a pothole or through social media or the website, whatever that looked like this one place, this one touch point for that customer and that citizen experience.

And, you know, government, especially in cities, hasn't really figured out how to do this. And so I would always say. Look to companies, you know, like yours and other technology groups who do this well, you know, if, if our resident average age was 32 years old, which it was, and they are paying their bills, you know, in, in their hand and on their phone and on their device.

Why would we expect them to come into city hall and use a credit card or cash payment? I mean, we were just so far behind. So what advice do you have? Because I think that some of these. This, the leadership, the vision, all of the work that you do is like so applicable to so many different industries. You

Yep.

surprised that, and even beyond like telecom and tech and all this, like, where do you see those opportunities today to kind of bridge that divide, especially when it comes to serving, you know, serving customers or like I said, citizens in, in government.

Well, a couple of things. First of all, I think, you know, the private sector is, is a great place to learn the way to do it because it is a meritocracy and it is all about speed to market. And it's so competitive, like the government doesn't have a competitor. If it had, like, Right next door. There's the other government.

And if we're not ahead of them, if we don't out innovate them, we're gone. So Mitch Daniels was a recent guest of mine and he was a very successful business executive you know, for 18 years and then decided to get into politics and people said, you know, how did you, how were you such a successful governor?

He cut the budget, balanced the budget, two time governor of Indiana. He goes, I just applied what I learned in business to government. And then he went to Purdue university and the fastest rising prices in the United States were college tuitions. He froze the tuition for 10 years. And so for 10 years, he tuition and room and board were frozen for his entire period in real dollars, not, you know, inflation adjusted or anything.

hmm.

And he goes, I just, I just ran both the state of Indiana and then Purdue university. business. And you know, it's, so that's what, that's just what we did. And so could a company keep its prices flat for 10 years? Yeah. If that was an objective, that's what they would just figure out a way to do it. I think culture of innovation, getting back to how you get stuff out of the kind of out of the it department or out of the lab or, or, or what have you.

So for example, at Sprint, I my leadership team, my direct reports knew that every month I would talk to them and I would ask them, what new product do you have and what new way of of doing business have you implemented in your group that you didn't have a month ago? I was always pushing them on new ideas, new nukes, and if I didn't see them, there was a lot of pressure to go back and figure out how to change.

'cause if you were pretty. If you're kind of not changing and improving, you were, in essence, you were, you were moving backwards. And so

hmm.

my last two years and, you know, so it was a culture driven by innovation. My last two years at Sprint, we were being granted an average of over two U. S. patents. Not every year, not every month, not every week, every day.

We're being granted an average over two U. S. patents every business day, D A Y.

Mm.

so you make it part of the DNA, you, make it an objective, you make it part of the culture and you just, and innovation happens. It's just, it's not very complicated. Yeah,

is changing that quickly. So we have to too. And I always say government shouldn't be an exception to that, you know, and never really understood in that space why it lags so far behind, you know, especially when we're delivering services again to citizens or customers or whatever industry you're in. So I think that that's just fascinating. So

and I think one of, you know, problem with government is they don't have a competitor. And that's And, and you know, so it's like you have one government has one hand tied behind its back. And then there are things like, well, I don't know, you know people will take it as political, but for me it's not.

And that is where, you know, whether it's unions that protect jobs anything that anytime it'd be not because it's not a meritocracy, it's based upon things like seniority. And by the way, I, I am all for paying Good wages, great benefits. A lot of the good things that unions do. I also see the bad things they do like protect poor performers and keep and, and, and resist change.

You know, lots of organizations resist change unions. And we can talk about education. I don't want to get off in other ways, but they just resist change. In government you can get away with resisting change businesses that resist change. They can, but then they go out of business. They're gone. They're just boom.

And that, that solves it. If you will, Darwin solves it for us.

Absolutely. Absolutely. And, I think, you're exactly right I worked with 40 year employees, some of them who, and I I've had people say to me, well, I can't make any change in my organization until someone dies or retires. And that was really shocking coming from a world that I came from when the TV industry in New York City were like, if I didn't have a new idea to bring to the table, someone would set a box on, my desk and I'm out of work.

And so I think it's, that was shocking to me. And you're exactly right. The reason why change isn't happening because there's no, there's no competitor in the market. There's no. push and desire. But then we wonder how we attract this next generation of leaders into this space, whether it's to run for office or take these jobs.

I mean, that's something I think a lot about. And if there's no place for them or they don't see themselves in these spaces, that's really problematic too. So I'd love to know from you seeing all the changes in the world tell me about the part that social media played for you and is now playing in this world of storytelling and, and getting information out and that customer experience as well.

Well, you know, I, social media is a multifaceted, you know, sword, if you will. Of course, social media at the time, you know, shortly after we launched 2009, that's really when social media, especially the first big one was Facebook. That really kind of took off. And of course, there's been so much since then, and that has really increased the usage of these devices.

And some would say it has, you know, people have different points of view of what that's meant for the development of young people, whether it's been a positive or a negative. On the one hand, there's a lot more communication, and it was really changed it from a one to many to a many to many. Form of communication where people are getting so much of their communication just from other people.

I tend to be one that is more critical of social media because it's lack of curation and fact checking. And, and also just how much just junk there is out there. Like I could care less. Like, you know, one of the reasons I stopped going on Facebook is people are saying, Hey, I'm at the grocery store, or I'm out doing this, or whatever.

I'm like, I don't care. Hey, if you know, if you win a gold medal or you win the Nobel prize, tell me about it. But you know, if I'm just out, you know, Doing whatever, you know, my typical boring life. I'm not interested in your boring Uneventful everyday life to me. That's not interesting. I want things curated to be something that is actually worth knowing and of course what's happened in terms of so much else people are not getting their information from me a source that is either knowledgeable, educated, thoughtful, or most importantly of all, just fact checks.

And there's just so much disinformation out there. And I don't know, I don't know what the solution is. I think kind of as you will, like, you know, the cat's out of the bag, it is what it is. I don't know if we'll ever get the genie back in the bottle to where we're all working from the same set of facts.

So I'm kind of, I'm not a big social media fan for that reason. I think we've seen it play out in the last few elections where people are in these arguments and they're actually, they're not, they're not arguing different points of view from a known set of facts. People actually as who is it Kelly Conway or whatever, Kellyanne Conway or whatever said, well, we have alternative facts and now that's become accepted.

It's just your facts or whatever you believe that's a lot of that is, is, is social media. So I'm probably the last person or the wrong person to answer in that regard. And one of the other reasons I'm a little concerned about it. I personally am a big fan of AI. I think AI is a really good thing. Unless it's poorly trained or educated and AI models don't know the difference when they're scraping information off the web, whether it's true or not.

Because so much stuff on the web is not true at all. It's completely false. And so, how do we, you know, basically how do we determine fact from fiction right and wrong? But One of the things in education in terms of where things are going and I actually asked, you know, Mitch this on A recent interview is, They say, well, you know, Like when the calculator came along, do you need to learn math anymore?

Cause you know, I have calculators that can do it for me. I don't really need to learn to add, subtract, multiply, divide. Now that, you know AI can write memos and notes and the letters and even my texts for me, do I really need to learn to read and write very well? I personally think the answer is absolutely yes.

Because no matter how good these models are, the additional, we'll call it human piece at the end. So for example, I think that you could say to an AI model, write me a speech or a paper about A, B, or C. But then, that's just a draft. Where the person adds real value is they come in and they improve it. They put it in their own voice.

You know, all of those other things that come and you have to actually have, you never lose those skills, really good writing skills. Now, I may be wrong, but I think I personally, I write better than anything I've ever read on AI. I have better grammar, it, it, it, better organization in terms of how I organize a sentence, in terms of its theme and how I, and all those kinds of things.

And I think my. My high school English teachers for that. I'm really concerned that People will believe they don't have to focus as much on education Going forward because I think by the way one once AI is better than you then you don't have a job Then you are irrelevant. You have to work really hard to always be smarter and better than anything AI can do And I think that's a form of competition.

And I mean that in a good way. Getting back to our earlier conversation about the advantage of competition, always keeping you working harder. I think AI is going to force people to be, to work harder, to be smarter and more creative and to be better than anything someone can replicate in some model, that's a form of competition.

And I think that's a very good thing in my view. Thank you.

Absolutely. I think you're so right about that authentic voice that just isn't there. It's a tool, right? It's a new tool that helps us to, to be better and think differently. And I'm with you. I love it when applied correctly, but I couldn't agree more. And I think raising two teenage daughters right now, it's It's fascinating to kind of watch how they're looking at this new technology and, and how they use social media and just how different that is I just read a study that said that. students, teenagers are spending a fourth of their day on their phones, even in school, like during the school day. And in some ways they use it as a tool, like you said, like a calculator to help them, you know, research and find information and connect with other people. And there are positives to that. But where's that fine line between what you bring to the table and that human voice and that human element. And, and then how do we continue to move forward? By embracing these technologies and continuing to value learning in the way we've always done it.

So if you kind of look ahead, or we're telling your kids, you know, today, or your grandchild what would you say in the future, the next 5 to 10 years? Maybe not even just in the telecom industry, but in general about the types of skills and the skill sets that we'll need, you know, what, what would you be writing on your, on your napkin today, like looking, looking into the future now,

Well, critical thinking is extremely important. Being able to listen to many points of view and synthesize it, you know, or data and being able to think critically and coming out with good decisions. I think teamwork, the ability to work really well with others. I think related to that is empathy.

I think that will never change. We'll call it things that make us special and different as, as, as people and being, you know, and and being effective. And all of those things are critical elements of being a good leader. Because, you know, that's something that will never go out of style. We will always be looking for leaders, whether it's a leader of a small team, whether it's just a leader of a family.

whether it's the leader of a midsize team or a large team or a country or a company. And you know, I'm thinking mainly in terms of my sons they're, you know, they're in their late twenties, they're embarking on a career, you know, careers, both of them right now, I tell them, take risks, try things now work hard, learn everything you possibly can.

But be authentic and and, and learn to be a great leader of people because you know, that will, again, that'll never go out of style and it's always going to be needed and required.

and maybe now more than ever. I couldn't agree with you more. thank you, Dan. It's been such a pleasure to have you and have this conversation. I'm truly honored and so grateful that you took the time out of your schedule to talk with me. And I hope, I know my listeners are, are going to learn so much from you and also should tune into your podcast as well, which I'm a big fan of and a big fan of you and all you've done in your career.

So thank you again for taking the time to share your insights with me today.

Dana, thanks for having me.

Absolutely.