Embarq’s third act begins

I had the pleasure of spending some face time with Dan Hesse this summer for an in-depth and exceedingly well-written profile I wrote about him and Embarq. (Can you still call it “face time” when you’re 5’11” and the other guy is 6’5”?) Hesse has a warm, easy smile, but he is frighteningly tall. There were times during the interview when he would rest his elbow casually on the top of my head, and I didn’t say a word about it.

OK, I’m exaggerating. What I remember most, however, was the clear vision he had of Embarq’s future as well as the industry’s and how firmly committed he was to a strategy of fixed/mobile convergence. It will be interesting to see how he applies that philosophy to his new job as CEO of Sprint Nextel. But it will also be interesting to see whether Hesse’s replacement at Embarq shares the same vision.

Hesse made a lot of innovative changes at Embarq in a short period of time, a feat made even more difficult by Embarq’s history as a conservative incumbent local carrier. That will be a tough act to follow for his successor, but that successor will also be able to capitalize on many of the initiatives, new services and strategic planning that Hesse had only begun to get off the ground before he left.

One of Hesse’s top priorities at Embarq will also be a top priority at Sprint: reducing customer churn. Hesse was able to slow Embarq’s access line loss this year, but only by 5%. Embarq lost 343,000 access lines in the first nine months of this year. In the same period last year, it lost 361,000. Long-term, he said, the key to retaining customers was fixed/mobile convergence. Will he say the same at Sprint?

Looking back at his career, much of which was spent at AT&T, Hesse told me that most of his moves were made in pursuit of uncharted territory. When he moved to the Netherlands to run AT&T's sagging equipment division, which later became Lucent Technologies, he had never been in the equipment business. When he agreed to lead AT&T Wireless, he'd never worked in wireless before. When he took on its Internet business, he said, he barely knew what the Internet was. And he liked it that way. “I was always looking for an opportunity to change the game,” he told me.

At Embarq, a (sort of) brand new company with a dependence on an untested convergence model, he had another chance to blaze a trail, to do something he’d never done before -- something no one had done before, really. But he left this week to return to what he knows best: leading a wireless carrier. Will he change the game there? And will the new Embarq CEO finish the game that Hesse started? Only someone with a clear vision of the future could answer such questions.

E-mail me at ed.gubbins@penton.com.