DQE Communications is in the midst of an evolution. It’s moving from a being dark fiber company to a lit services company, and that’s required it to adapt just about every aspect of the business.
The dark fiber product targeted very large, very sophisticated companies with infrastructure managed by customer IT departments — customer companies put their electronics on the fiber and ran it. DQE’s transition to a lit services company means it will put the electronics and optics on the fiber and run it on their customers’ behalf. In the process, DQE is making the transition from a commodity-based company to a hands-on service provider.
“That’s a real technical challenge,” says Jim Morozzi, DQE’s president and CEO. “And that required a lot of ramping up of technical talent, that required a lot of process — defining process, documenting process, testing the scripts, testing the methods and procedures, all those kinds of things.”
The company has also been mapping its growth — literally. With its new service, it had to figure out how to find new customers and expand the footprint beyond its familiar downtown Pittsburgh home into fresh territory. It’s a lot to put on a CEO’s plate. And Morozzi is leading that charge with a focus that’s as much inward as it is outward.
Externally, expanding its network’s physical footprint meant going to areas that the company had not traditionally gone to — finding more regional rather than strictly downtown opportunities. That outward move required DQE to make investments, to spend the dollars to build the fiber network.
“You have to have a conviction or point of view that says, this will be good money spent; this will make sense to make this investment in the fiber because we can get one or two anchor tenants and then find some follow-on business once we’ve laid that fiber,” Morozzi says.
The move required Morozzi to reorient a team that, prior to his arrival, had been more conservative. They had to get comfortable taking more swings at bigger opportunities — large RFPs that would require multiple months to build and significant capital investment to make.
Growing the physical footprint enabled the company to find more customer opportunities, but it also meant having a more complex network, with hundreds of miles of fiber between endpoints. That created more exposure to manage, which required internal work to ensure the external push was executed efficiently.
On the inside
Part of the internal push was to get the level of process and technical expertise of the team to a place that enabled it to handle new, larger opportunities.
“We were able to bring on new talent and establish our processes, procedures, documentation, records management, all those kinds of things,” Morozzi says. “When you’re a small organization, you figure it out.”
Internal communication also was a big part of making sure that the team set and understood the project milestones, key deliverables and timelines for completion.
“We’re not just going to nebulously go into things,” Morozzi says. “We’re going to have specific milestones and deliverables, and then we’re going to check against those. So, it’s frequent team meetings and frequent going back to the project plan and making sure we get those things done.”
Those constant adjustments gave the company opportunities to identify challenges earlier on, rather than risk getting late into the process and then discovering it missed something substantial.
Morozzi used a lot of face-to-face interactions to communicate the vision down through the company. He talked more with direct reports and met with the teams to make sure they understood, from his point of view, what the company was trying to accomplish and why.
“I think that’s really important with almost any business or any organization, that people understand why you’re trying to do certain things,” he says. “And it’s all got to tie back around in terms of people’s goals, objectives and incentive compensation.”
That meant tying what the organization wants to get done to what individuals need to do to achieve that, then outlining those goals and making them part of an individual’s objectives and incentive compensation. That equates to alignment, from top to bottom, to ensure the delivery of specific major initiatives.
“It’s impactful,” Morozzi says. “When people get to see the individual components of what they need to deliver and understand that, that’s one of my goals, my objectives, and I either benefit from it or don’t benefit from it, that’s how you get things done.”
Heading into 2020, the company expected it would see similar growth trajectories to what it had seen in previous years. But because of the pandemic, that did not happen. Morozzi says the company grew from a top-line revenue perspective and exceeded where it wanted to be from a cash flow perspective, but the shutdowns proved difficult, especially on the sales side.
“We were still able to do all the things we needed to do from servicing the fiber and building, but we had a difficult time getting in touch with that prospective customer,” he says. “That man or woman was not in their office, and their mind was on other things, as well. They were not as interested in hearing about DQE’s proposal and what we can do for them and how we can make life easier for them. So, we struggled. And, I will admit, we’re still not to where we want to be. It’s still not to a point where business is as usual.”
DQE did, however, see existing customers request service. Many wanted more bandwidth as they determined they needed bigger pipes to do their work, and the company remained busy and engaged on the engineering and field operation side. As a result, it reoriented a lot of its focus and attention to serving and helping existing customers. It was that new business pipeline that was a problem.
Despite its new business challenges, the company did not make any adjustments in its growth plan out to Harrisburg, Pennsylvania. Harrisburg is a new market for DQE, and it wanted to get certain things done there by the end of the year; ultimately, it achieved about 80 percent of what it wanted to accomplish. Morozzi says he’s happy with that progress, given the disruption of the pandemic.
When Morozzi joined the organization in 2013, it had fewer than 2,000 route miles of fiber. Now, DQE has nearly doubled its fiber, almost doubled its service footprint and has grown from six counties to 17 throughout Western Pennsylvania and Northern West Virginia. The company has also seen an increase of about 175 percent in its customer count.
DQE’s employee base has also grown since Morozzi arrived, from about 20 individuals to 85. And the number of physical outside plant contractors it works with has grown, as well.
Part of the growth of its personnel was in its management team. Morozzi, for instance, added a business development position to take on responsibilities that were somewhere between sales and marketing. The person in that position would look at what the company needed to develop next from a product perspective and where it should be considering expanding its footprint so it could lay the groundwork for where it wants to be a year or two from now.
“There has been a significant uptick in the number of people we do business with and the fiber footprint from which we sell,” Morozzi says. “Clearly that concept of, ‘We’ve got to expand the footprint to go after bigger projects and more customers’ has paid off for us.”