News Column

The French Connection

June 2003, HISPANIC BUSINESS Magazine

Joel Russell

As the global economy muddles through its third year of doldrums, investors are asking, "What's the next big thing?" For Sol Trujillo, the answer is wireless. The former CEO of telephone giant US West, Mr. Trujillo in March took the helm of Orange Inc., a multinational wireless company majority-owned by France Telecom.

The new assignment puts Mr. Trujillo at the center of the world stage, running a company dominant in two of Europe's largest markets - France and the U.K. Orange maintains offices in 20 countries, from the Ivory Coast to Thailand to the Dominican Republic, its only Western Hemisphere operation. Although the company has one of the most identifiable brands in Europe, it remains nearly unknown in the United States.

"Orange is a bigger company than even the merged company between US West and Qwest [which acquired US West in June 2000]. In today's market, in which communications has fairly depressed values, it's an $18 billion topline company with a market capitalization…between $35 billion and $40 billion," said Mr. Trujillo during an exclusive interview with Hispanic Business. "I agreed to [lead Orange] because we have the opportunity to create a new model for this industry for the next decade. It's going to be fun doing that."

His vision of the wireless future starts with the fact that the average wireless phone subscriber in the United States spends only nine and a half minutes per day on the cell phone; in Europe, it's around five minutes. To encourage subscribers to use more minutes, the wireless providers must offer more services, Mr. Trujillo believes. He foresees an integration of wireless telephony, the Internet, and private data networks opening up a new array of service and, thus, revenue streams.

Integration means, for example, that people could have phone messages, work e-mails, and personal e-mails compiled into one list, and they could delete or respond to these messages via voice or typed commands. "Wouldn't it be nice if you could have all that information provided to you on a network-based application stored on a server?" asks Mr. Trujillo. "So when you turned on your [home] PC, it would be there. When you turned on your cell phone, it would be there. Or at work - boom, it's there. And it's the way you want it. What I'm looking to do is create a new strategy that centers around embedding this intelligence on the network so it shows up on whatever device you have."

John Major, the former CEO of Novatel Wireless, who has worked with Mr. Trujillo as a board member and a supplier, agrees with his analysis of an industry in transition. "The question used to be, could you make it work at all? In that phase, very little focus was put on costs or differentiation of the customer experience. Now that's changing. The great companies are developing superior cost and financial models," Mr. Major says. "This is very similar to what happened when Wal-Mart emerged from the debris from the discount retailers. Southwest Airlines in transportation, same story; Dell in PCs, same story."

Leading a high-tech revolution of global proportions may seem grandiose for a soft-spoken Hispanic from Wyoming, but Mr. Trujillo cites his background as a major advantage for the task. Besides the Hispanic work ethic (see accompanying story, "Bits of Wisdom"), his experience gives him what one executive recruiter described as a unique ability in dealing with cultures and people. "I've always believed in diversity because of my own experience and what I've observed," Mr. Trujillo says. "So I can go into France, Switzerland, the U.K., Thailand - wherever we operate - and look for people's best, as opposed to their limitations. That's an advantage when you try to lead a global company."

"Sol is a believer in diversity in the broadest sense of the term," says Phil Burgess, a former senior vice-president of communication at US West. "He had a diverse workforce ethnically, but also professionally. More than two-thirds of his top executives came from outside US West, and half from outside the telecom industry. On the ethnicity side, he said he got his chance because people were reaching out to Hispanics, and after that first chance, he showed what he could do in his performance. He's sensitive to spot young people with potential, regardless of where they went to school or their background."

Mr. Burgess calls his former boss "a human dynamo" and confirms Mr. Trujillo's claim that he sleeps only a few hours each night. "You might get a call from him at 11:30 at night, or 6:30 in the morning, e-mails dated at 4:30 a.m.," Mr. Burgess remembers.

"Unique" is a word commonly used to describe Mr. Trujillo's professional skill set, whether on the subject of diversity or market savvy. "Sol brings a unique background to his new position," declared Richard McCormick, chairman of US West, in presenting the new CEO in 1995. "He has been an active leader in our emerging media businesses, through our directory, database marketing, and interactive multimedia services businesses. This combination gives him a unique perspective on how we can capitalize on the opportunities that lie ahead." Adds Mr. Burgess: "He possesses a unique combination of being a visionary in telecom industry and a hands-on manager. He's really unusual in that regard. There are a lot of fly-by-wire executives, and others in the trenches who miss the major moves in the market. He has a good balance."

Jay Keyworth, a science advisor to President Ronald Reagan, once called Mr. Trujillo "the first digital telecom CEO" because of his eagerness to try new technologies. "I found him a fresh thinker," says Mr. Major. "He sees problems in terms of how his team can take advantage of them, as opposed to how he can take advantage. He's the ultimate team player. That's not to say he doesn't play a role, but a good quarterback doesn't forget his ends and linemen. So [Mr. Trujillo] has the skill set - he honed it at US West."

Besides his personal assets, Mr. Trujillo inherits the formidable resources of his new company. "To date, Orange has achieved overwhelming acceptance in markets as diverse as Switzerland, Israel, Australia, Belgium, and Hong Kong," says Simon Cartwright, executive vice-president at Orange's London office and a longtime veteran of the company. "Market research and direct experience have proven that the Orange brand, the Orange name, and the Orange values and images effectively cross cultural and language boundaries."

Potential obstacles standing in the way of the wireless future include technical limitations and industry structure. On the tech side, Mr. Trujillo plans to sidestep trouble by keeping out of handset manufacturing, a niche Nokia has dominated for the past five years, according to a report from Banc of America Securities. While Microsoft, Ericsson, and Motorola fight to unseat Nokia, Orange will concentrate on innovative software, a strategy that already has teamed it with Microsoft to launch what The Economist calls the first "Windows-powered smartphone."

With regard to industry structure, the glitch is getting cellular operators to allow competitors to provide positive customer experiences on their home turf, in the same way fixed-line telephone companies pass calls on to each other's local lines. Already Motorola has started an alliance to improve call-passing technology, and the emergence of wireless local area networks (WLANs, or Wi-Fi) will push the industry farther in that direction.

For now, Orange's plan is to build a better wireless system rather than expand geographically. "In business you always focus on your core first," Mr. Trujillo emphasizes. However, once Orange successfully develops an innovative product line, he leaves open the possibility of entering new territories - including the vast U.S. and Latin American markets - "over the medium term."

The prototypical 21st-century Hispanic executive, Mr. Trujillo enjoys both big plans and the unexpected turns that come with their implementation. "I ran a company in the U.S. [US West] that had a wireless business, an enterprise business, an Internet business, and a fixed-line business, and we made it all work together," Mr. Trujillo concludes. "I've already seen part of this movie and I know it's possible. But there's also part of the movie to play out. There are multiple endings and multiple plots that can play out over the next few years. That's the fun for me."

Click here for the full interview transcript.


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