Qwest’s Swaggering, Aggressive Nacchio Proves He’s a Survivor in Telecom Field
Joe Nacchio was fresh out of New York University with an engineering degree when he walked into an interview room for AT&T; by mistake. He took the job.
Over the next 26 years, Nacchio moved up through the ranks, eventually to head Ma Bell’s consumer long-distance division.
But after being passed over for AT&T;’s top job four years ago, he jumped to Qwest Communications as chairman and chief executive after a friend talked him into taking an interview as a favor--two weeks before Nacchio was to become chief executive of another company.
“You make a lot of your life off opportunities,” said Nacchio, 52, who won’t name the company he rejected for Qwest. “You plan some out, but it’s equally important to take advantage of circumstances happening around you.
“The way I run Qwest is that way. We got an idea what we want to do, but we take advantage of opportunities around us.”
Nacchio lived up to his philosophy last year, when his company acquired telecom giant US West. That deal was launched after he and his executives, on the lookout for takeover targets, heard rumors that the Baby Bell was in play.
He has parlayed long hours and shrewd gamesmanship into a broad-reaching telecommunications company with 30 million customers. Revenues grew 14% last year, and this year Qwest expects 11% growth to more than $21 billion.
Telecom analyst Jeff Kagan said Nacchio’s team at Qwest reminds him of the early MCI entrepreneurs: loud, in your face and flying by the seat of their pants.
Much of Qwest’s spirit, Kagan said, stems from Nacchio, who arrived costumed as a member of “Survivor” for an analysts’ meeting last year.
“He’s a fun character to watch in the business,” Kagan said. “You wouldn’t have seen that if he were still at AT&T.; He’d scare the shareholders to death.”
His ability to handle investor concerns was showcased just before Christmas. Nacchio was part of a father-son group driving back to New Jersey from a trip in Kentucky to distribute truckloads of toys, clothes and food to underprivileged families when his cell phone rang.
“Joe, stock’s dropped four bucks today,” a Qwest executive at the other end said.
Within a day, Nacchio was soothing investors’ fears in a teleconference arranged as old-school telecom companies were issuing warnings about lower earnings.
He told shareholders Qwest was a different company than SBC Communications or AT&T;, who were relying on long-distance revenue in an Internet world. His audience believed, and Qwest shares rebounded.
“Just shows you can never get away,” Nacchio said.
Whether on the road or behind a desk, he has attracted adjectives like aggressive, confident, swaggering.
In 1998, he acquired LCI, 10 times Qwest’s size at the time. A year later he engineered a hostile $47 billion takeover of US West, then infuriated US West chief Sol Trujillo by trying to deal the combined companies to Deutsche Telekom before the deal was finished.
Deutsche Telekom backed off, and Nacchio lashed out publicly at US West by labeling its protests “bizarre.”
“He handled it in typical Nacchio style, which is not having the patience to understand people who get in the way,” Kagan said. “He’s got a lot of rough edges, but that’s what you need to not take no for an answer.”
The Economist magazine once compared him to Joe Pesci in “GoodFellas,” which got his hackles up.
“I was really hurt by that because I don’t think all Italians are mob guys,” he said. “The second thing is, if they’re gonna compare me to a mob guy, at least pick Robert DeNiro.”
Former US West executive and fellow New Yorker Peter Mannetti was one of the few in senior management to join Qwest’s executive circle. As wireless chief for both, Mannetti said, he welcomed the merger, although shareholders paled.
“There’s just less bureaucracy now,” Mannetti said. “Three guys in a room can make a decision. We can move faster. That’s a requirement today to be successful in any business.”
Shareholders now praise the move for increasing Qwest’s customer base, adding cash and credibility, and giving Qwest traditional long-distance revenue while remaining committed to the latest in fiber-optic technology.
Nacchio describes his job as running the largest start-up in America. But until AT&T; chose an outsider over him for chief executive in 1997, he wanted to run an established giant.
“I didn’t know better,” Nacchio said.
So he jumped to Denver-based Qwest. This for a man who spent much of his life in one New York borough or another, except for the time AT&T; sent him to Cincinnati, where he met his wife. Nacchio now spends the week in Colorado and weekends at home in New Jersey.
In Denver, he frequently reminds employees of his keys to success: Serve customers well and save cash. He’s also fostering a culture of innovation, accountability, fiscal responsibility and predatory change.
“When the day comes when I’m not that way anymore because this is a job and we’re not on a mission, I’ll tell my board they need someone else as a CEO.”
