FROM AN OUTSIDER’S point of view, Guy Laurence was a breath of fresh air for Rogers Communications. From the inside, however, it may have seemed more like a tornado.
Compared to other Canadian CEOs, Laurence was never short on swagger. Engaging, funny, far more open with the media than others, eager to boldly call out competitors if he felt like it, Laurence also showed himself willing to tear apart the company Ted built.
After the retirement of former CEO Nadir Mohamed three years ago, Rogers needed a shakeup. The controlling Rogers family knew it, as did its board of directors. Mohamed was the stable transition executive after Ted Rogers’ death in 2008 and when he retired in 2013, the company wanted someone new, with vision, who could revive Rogers’ innovative roots built by its legendary founder. Laurence arguably did that, but in a style that rattled the board of directors, the Rogers family and many employees.
When he came on board in December of 2013 after an extensive search, Laurence faced one crucial issue: Rogers’ customer service metrics were terrible, something he and others acknowledged, and repairing that was job one. Laurence heard those and many other complaints first-hand as he spent the first three months of his tenure touring the company’s outposts across the country to learn the business and its people.
He emerged from that tour with a new plan, dubbed Rogers 3.0, which he unveiled in May of 2014. He sold it as his plan for the company and while it’s a strategy the board endorsed (and will continue to pursue according to interim CEO Alan Horn) some within Rogers who contributed to the plan’s development and implementation bristled at how Laurence oft-referred to it has “his” plan to lift the company, sources have told us.
In fact, inside Rogers, it was Laurence’s perceived pursuit of the spotlight and the way he seemed intent on gathering up credit for himself which built animosity and was an element of his undoing, according to sources inside RCI.
The newcomer/outsider ploughed through the organization, making several key hires from outside the company and culled middle management. While there were some promotions from within (Dale Hooper to chief brand officer, for example), Laurence hired Deepak Khandelwal (chief customer officer) and Jacob Glick (chief corporate affairs officer) from Google, Nitin Kawale (president of enterprise business unit) from Cisco, Dirk Woessner (president, consumer business unit) from Deutsche Telekom and Frank Boulben (chief strategy officer) from BlackBerry.
“They’re used to doing business in a different way,” Laurence said of his hires in 2014.
Perhaps it was just too different for the Rogers family and the RCI board of directors.
“I think it's safe to say that Guy wasn't well liked by any of the old guard,” said one insider. “Combine that with the way he dealt with the family and that was it. The Rogers old guard are going to win the long game, so how you treat those folks can come back to haunt you.”
We talked to several senior Rogers people on Monday who asked not to be named and it appears Laurence’s downfall was that the Rogers family – the people who own the place – quickly became disillusioned at all the transformations being made, more especially how they were being made. Laurence was not properly deferential to the Rogers family and didn’t include them in some important decisions, say our sources.
Laurence often came off as arrogant inside RCI and dismissive of the family’s role. He did not appear to work to bring the Rogers family onside with his vision, nor did he end up with many champions on the RCI board, most of whom were appointed by the founder.
By many measures, however, Rogers under Laurence is vastly changed – and for the better. Wireless and broadband subscribers are growing again and its wireless churn is much improved, say its third quarter results. Customer service metrics published by the CCTS now show it to be a leader, rather than a laggard. It’s Roam Like Home international roaming product is a clear winner, setting the company apart from its Canadian competitors, and wired broadband customers have been signing onto its Ignite unlimited broadband.
Rogers can also purchase wireless tech more cheaply thanks to the Vodafone supply agreement signed by Laurence, a former Vodafone executive, and its business unit is now growing, unified under its new Unison brand. He also drove Rogers’ push to rebuild all of its primary offices to ultramodern, cool, collaborative spaces designed to appeal to millennial employees, soon to be the biggest cohort of people of working age on the planet.
Laurence was brought in to be an agent of change by the board and the family who have now let him go. It seems it was all too much, too fast, done too superciliously.
“Joe being available was the final straw.” – Phil Lind, Rogers Communications
Plus, while wireless and broadband subscribers have gone up and revenue has increased, thanks to the many changes, Rogers' margins have shrunk and profitability is still flat as it spends heavily to claim customers.
While Laurence’s media acumen has also been questioned in and out of the company because of the unit’s shrinking performance, that really has little to do with him. Most of the issues in the TV/radio/print group are due to the ongoing worldwide shifts in media consumption, to which Rogers can only hope to adapt. Even the middling performance of the company’s $5.2 billion NHL deal and the failure of shomi can’t be laid at his feet since both were either done, or well under way, before he was hired.
Laurence’s $100 million Rogers investment in Vice Media is still rather puzzling, though.
As for the timing of Laurence’s departure on Monday, insiders have told us there was no one final straw, just that the Rogers family and enough of the board had had enough of how Laurence ran the company and decided it was time for him to leave – due in no small part to the fact that former Telus CEO Joe Natale made it known he was now looking. Telus grew strong under his command and he would have no shortage of suitors.
“Joe being available was the final straw,” Rogers board of directors vice-chairman Phil Lind told us in a short interview late Monday. Natale was one of the executives Rogers coveted prior to hiring Laurence, but at the time he was being promised the CEO’s chair at Telus, so he declined to pursue Rogers’ interest at the time, say our sources.
(Natale was then promoted to Telus CEO, only to have it taken away in August of 2015 when the Telus board of directors suddenly required him to move to Vancouver and he declined to do so. Natale is bound by a two-year non-compete contract that expires in August of 2017, which Rogers hopes to negotiate with Telus to shorten.)
Laurence had no three-year contract that was ending, no year-to-year options that weren’t renewed – as has been speculated – because there was no expiry date on his tenure as CEO, Lind said. Laurence had just gotten his permanent residency, seemed focused on the future and very well-invested in Rogers when he met with the media on October 6th. We even saw his phone wallpaper then – a photo of him in full Blue Jays regalia on the mound at the Rogers Centre.
Interim CEO Alan Horn told the company’s third quarter call with financial analysts that despite disposing of the CEO in charge of the Rogers 3.0 strategy, the company is keeping it, and the people in charge. “The board has complete confidence in the ELT (executive leadership team), the direction that’s been set and will continue to focus on the customer-first, customer experience aspects of 3.0, so from that perspective it’s just business as usual,” he said.
“We look at this in the context of Joe Natale, who we think is a unique individual in terms of the Canadian telecom landscape and we think there’s an opportunity with Joe at this time. Timing is never perfect on these things… but we did feel it was important that our organization and employees know what the long-term CEO plan is and so that is what drove the timing on this – it was a confluence of those two items,” Horn continued while being questioned by analysts.
“Obviously being a controlled company we are looking to the management to take a long term view in terms of generating a long term growth for the company and I think that’s what we saw in Joe in terms of his track record, so I think this is absolutely consistent with the view of the board and the controlling shareholder that we should have the absolutely best management possible.”
Photo by David Leyes, Toronto.
