There comes a point in every corporation’s life, when its Board needs to be eliminated (i.e. restructured), and the main job of an incoming CEO is to see to it that the interests that put him or her in place, are broken up.
It’s very tough to tell the people that hired you, ‘Sorry, but you hired the right man for the wrong reasons,’ but clearly the new Sprint Nextel CEO, Daniel Hesse, has been selected entirely because he ‘won’t’ do any such thing, despite it being drastically needed.
Hesse is a long term wireless man, with senior posts at AT&T and Sprint, but none at Nextel. It is the Nextel part of the business that needs a loving hand and the Sprint side of the Board that needs to stop talking up the Sprint past, and start thinking about saving the asset they acquired in Nextel. Failure to stop the rot at Nextel will mean that it paid all those $ billions to become a company that shrinks to the same size Sprint was before it bought Nextel.
Nextel is the company that did the economic miracle here. It brought novel applications like Push to Talk to the enterprise and squeezed a national US network out of a patchwork of spectrum that others thought was useless. That’s pioneering stuff, and the Board which gave scant consideration to the offer of SK Telecom (South Korea Telecom) which brought with it more pioneering spirit, technical know how and $4 billion, needs to be rooted out by the new boy, and the Koreans need to be brought back to the table.
The offer that the Sprint Nextel Board turned down from SKT without a meeting included the re-instatement of Nextel ex-CEO Tim Donahue, as Sprint CEO. Donahue might still be brought back to the fold as chairman, and the SKT offer might be brought alive by a new, strong CEO from the outside. It is unlikely however that this is what Hesse will consider. If he is thinking along those lines, then the Board would not have invited him to do the job, or confirmed James Hance in his new role as non-exec chairman.
Dan Hesse is 54, and was part of the spin out of the fixed line Sprint business Embarq. We can only hope that his excellent operational track record means that he does not do something disastrous with Xohm, but leaves it on track while he fixes the problems with overloading the Nextel network and undermining its commitment to a service culture, which has taken place under Sprint’s hand. But given the fact that he has been put in place by a board that is spooked by the costs of investments, and which leads on Sprint experience, all his advisors will be telling him to do the opposite, and that will lead to continued spiraling demise at Sprint.