VERIZON: BUILDING A BRIDGE
In September 2011, Verizon was faced with colossal decisions on moving forward as an organization and overcoming new challenges. The organization transformed from a Baby Bell to a market leader during a period of rapid technological changes, market growth, and regulatory amendments. Presently these changes require Verizon to innovate operations, structure, vision, and culture. The decisions made will be the compass for Verizon’s future.
The global telecommunications industry has been drastically shifting from “analog, landline, narrowband to digital, wireless, broadband and, more recently, toward smartphone and machine-to-machine” (Kanter 2). This quote highlights the shift from wireline to wireless, introduction of smartphones, and change in the industries competitive landscape. Additionally, the shift emphasizes the struggle for Verizon in moving from the slower, more bureaucratic, and less customer-centric wireline business to the more flexible, faster, and entrepreneurial wireless business. This struggle is amplified as a result of Seidenberg’s decision to separate the wireline and wireless companies. As Verizon has moved forward it has progressed, changed, and reacted to its changing environment and competitors. Verizon’s reaction to the iPhone release, implementation of the FiOS (fiber-optic services), ecosystem approach, and cultural changes highlight a few accomplishments in the past 3-4 years.
The iPhone Reaction & Success
Verizon’s customer base was deteriorating due to the shift from voice products to wider costumer solutions. Verizon acknowledged this shift and successfully developed the industry’s first mobile-based distribution system, which allowed users to download games, ringtones, and videos – driving revenue. While historically focused on offering basic telecommunication services, Seidenberg realized the need to venture in adjacent complementary industries including GPS-enabled devices, navigation, games, and music. However, this success was quickly overshadowed by the threat of the Apple iPhone - introduced in June 2007.
In response to this market-changing event Seidenberg explored multiple options but concluded that they internally did not have the competencies to build a competitive device. Instead he championed innovative partnerships with Google and Motorala. Seidenberg implemented policies, Tiger Teams, system alignments, best practices, and accountability structures for all three partners. Verizon successfully overcame historical resistance to partnerships and sharing proprietary information. “In a departure from tradition” this internal cultural change led Verizon to a successful launch of the Droid (Kanter 5).
Innovation & FiOS
In the past 3-4 years the success of Verizon’s wireless technology came at the expense of their wireline business. In response to the declining revenues, Seidenberg built a FiOS network connecting directly to customers’ homes. While originally it was intended to help compete against VoIP companies, he realized an unexpected opportunity to integrate its phone, TV, and Internet services through an interactive platform called FlexView (Kanter 6). In order to implement the idea, Seidenberg was forced to re-evaluate a small portion of Verizon’s organizational structure. He changed the way design teams worked from being in solos to larger, compromising, and connected teams. This was the first step in creating a shared vision between fragmented departments. By 2012 these internal changes led to 16 million households using the new FlexView technology.
The Ecosystem Approach
With a new and shared vision/goal of “beating competitor AT&T by at least two years,” Verizon examined the way innovation was introduced internally (Kanter 7). Realizing their fragmented operations, Richard Lynch, introduced the 4G LTE innovation center as the foundation of meeting their vision. The innovation...
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