Each of the 11 leaders reporting to him was operating on his or her own, which created a slew of problems from the onset.
“We had 11 countries, so we had 11 different advertising agencies, 11 different product names, nothing was common,” de la Vega says. “We were not buying equipment as 11 united countries — we were buying them as individual countries, and we were never getting the best prices.”
In addition to that, the unit was struggling financially.
“The business as a unit had never made money, because it was a company that had been set up and was still in development mode when I got there,” he says.
Aside from the internal issues he faced, that particular part of the world also presented plenty of political issues for him. Right as he took over, Argentina went into a depression that devalued the peso 4-to-1, which took the revenue in that country from $1 billion to $250 million overnight.
Then there was Venezuela, which had been the most profitable country in his region, where Hugo Chavez was run out of office for a day and a half, a new leader was elected and abolished the country’s constitution, and then Chavez came back, resulting in business strikes and a gasoline crisis.
Oh, and then there was Brazil, where the unit’s partner decided to not put up a payment that was due on some debt, so it defaulted on a $1 billion loan, and de la Vega had to try renegotiating that with 34 Brazilian banks.
And don’t forget about Colombia, where the government started a new company to compete with him, and the rebels were blowing up his towers.
“Other than that, it was an incredibly stable environment,” he jokes.
De la Vega clearly had his work cut out for him. But by creating a new strategy, holding people accountable and taking a fresh look at things, he worked toward aligning those 11 entities as one business unit.
“You’re obviously up to your neck in alligators in so many different issues that sometimes it’s difficult to think about how you set a long-term strategy and create a vision and align people, but that’s exactly what we had to do to win long term,” he says. “I knew I was fighting fires in all those countries, but I knew that unless we had a longer-term vision for the company and we aligned those 11 countries to act as one, not 11 different ways, we were not going to succeed long term.”
Listen and get buy-in
The first thing de la Vega did was issue airline tickets to Miami to each country’s CEO, where he started by listening to each leader.
“That’s part of the coming together,” he says. “You have to storm to form. That’s what we did. We let each one of them talk about their view of how we address the challenges that we faced.”
Keep your mouth shut during this initial step.
“You have to have patience to hear them out,” he says. “I always like to start with a green-light session where it’s, ‘Let me hear your ideas — I’m not going to say that’s a good one or not,’” he says. “I just want to hear them all.
“You want to create an environment that’s not threatening. Otherwise you’re not going to get somebody’s big idea because they may feel internally that it’s not a good idea but it may be a huge idea if they give it to you.”
Then he started to highlight what he had heard from them and build common ground.
“Well that’s fine, that’s a good view for one country, but how do we win against multinational corporations that are attacking us and not in one country but 11 different countries?” he asked them.
Getting people to agree to a new direction requires two things.
“The key thing is to paint a picture of the future that is going to want to make them sacrifice and do the hard work because there is a better, more promising future for them,” he says.
And the other is to just be honest and realistic.
“It’s confronting the brutal facts and realizing that the course we were on was not sustainable and we needed to change,” de la Vega says. “If you’re upfront with them and don’t pull any punches and you’re honest and eventually you give them time, they will come around.”
Getting people to agree to a new direction requires them to compromise.
“You have to give up something you consider to be a compromise or a sacrifice but you’re doing it for the better good,” de la Vega says.
For example, each country was purchasing its own headsets, but as a result, they weren’t getting the best prices. By agreeing to purchase just four different kinds of headsets for the whole region, everyone would lose some of their individuality and choice, but it would reduce costs, so they ultimately realized it would help them win.
“It’s always trying to paint this vision of the future that makes them want to follow you,” de la Vega says. “That’s what leadership is all about — people wanting to follow what you’re suggesting they do. Otherwise, it’s not leadership.”
Put a plan together
Once you have people on board with you, then you can put together a plan to move you forward, but you have to be sure not to dictate to them.
“Sometimes I felt like I just wanted to dictate: ‘We’re going to do A, B and C, and that’s it,’ and that would have been more expedient for the short term but never would have accomplished the long-term objectives of getting the buy-in and getting people engaged and getting people enthusiastic for our vision for the future when they had a part in it rather than when it was dictated to them,” de la Vega says.
Instead, he asked his people to brainstorm what the top strategies should be.
“If we were going to go that [new] way, what would be the top 10 strategies and tactics to follow that?” he asked. “What are the must-dos?”
Limiting it to just 10 things will also help get buy-in down the ranks and across your organization.
“When you have unstable environments, people look to leadership for guidance, and if you’re all over the place and your priorities change and your strategic vision changes, people get very unsettled,” de la Vega says. “It’s very important to be very clear, very crisp and very consistent in what you want them to do, and then they’ll do it exceedingly well, and in some cases, it’ll probably surprise you how well.”
You might be thinking that it could be difficult to limit yourself to 10 things and are unsure of how to do that, and that’s where data comes into play.
“No. 1, you get input from those CEOs, but then you put a process in place where you just don’t listen to opinions, but you put the facts down by a creation of a plan, and that is you have to put some rigor into the financials of, ‘If we’re going to do X, Y and Z, what are the impacts of doing each of those 10 things?’” he says.
Pull out your calculators and do the math.
“We go, ‘If we execute that well, it should increase revenues by this much, reduce expenses by this much, acquire X number of new customers,’” he says.
Having a set plan is crucial to the overall turnaround process.
“Hope isn’t a strategy,” de la Ve
ga says. “Hoping things will get better or just coming up with ideas is not good enough. You have to come up with a plan that’s executable.”
With people on board and strategies set, then he had to find a way to make sure things got carried out.
“The key to making those initiatives into a reality is they have to be measurable — you can’t just say, ‘I want to go from A to B.’ I want to go from A to B, and I want to have these milestones that tell me I’m on the right path, I’m on the right timetable, and that I have people who are accountable that are going to make sure it gets done.
“Sometimes people have a vision or a goal that is not measurable, and I tell my people, ‘If you can’t measure it, you’re not going to be very effective in getting it done.’”
To do that, de la Vega instituted two mechanisms to measure people by. The first is the “Four R’s.” These break down the success rate into four indicators: rate of penetration — how many customers use your services?; revenue intensity — what revenue do those customers generate?; return on operations — are you making margins or not?; and reputation — how is the customer satisfaction?
When talking to employees, progress on these four R’s is always communicated so it’s ingrained in them that these are important.
“It’s keeping the metrics simple, keeping them consistent, keeping them so that people know exactly where you stand,” de la Vega says.
Then he breaks things down even more. For each individual initiative in those categories, he uses a color-coding system: red for missing goals, yellow for near misses, green for hitting goals.
“If you’re not doing well, you’re going to have a lot of reds next to your name,” he says. “Everybody knows if you’re doing well or not and that increases the accountability. Nobody can say, ‘We don’t know how we’re doing.’ Typically, if you challenge people with a goal and you give them a good plan and good goals, they will strive to achieve them. But if they don’t know the goals or the goals are unclear and there isn’t the plan, that’s when bad things will happen.”
Having this kind of accountability system allows you to see high-achievers and celebrate successes with your people. On the other end, it also helps you see where there may be problems so you can address them.
“The first thing, when something goes in the red, that I look for is an outlier — is it some specific event in that week or that month that caused that to happen, and if that’s what it was, just a one-time event, and we don’t expect that to happen again in the future, then it’s a short conversation,” de la Vega says. “Then I’ll look the next month to see if it was a one-time event. If you see a particular thing begin to get off track consistently for several periods, you need to have a call with that leader to find out what is going on — do they know what’s going on; do they have a plan for fixing it? And that’s how you can get a pretty good read on whether the leaders you have really know what’s going on. And the good ones always know.
“The more difficult situations are when something happens and they don’t know what caused it to go wrong and they don’t have a plan to fix it and you may need to get more involved, watch that person closely, coach them or get them the help that they need to be successful.”
Eventually his BellSouth division went on to be profitable which led to a series of business transactions and career moves that landed him at AT&T. Today, de la Vega is president and CEO of AT&T Mobility and Consumer Markets, a $49 billion division of the telecommunications giant.
“The best measure of a good leader is when he or she can make people do things that they were thinking is impossible to do,” he says. “When you, as a leader, have a group of people do something they thought was impossible to do, I would say that you have reached a pinnacle of leadership.”
How to reach: AT&T Mobility and Consumer Markets, www.wireless.att.com