Sprint nextel the management of the brand for the benefit of reputation and corporate culture
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Sprint nextel the management of the brand for the benefit of reputation and corporate culture

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Cases Corporate Excellence ...

Cases Corporate Excellence

During a merger process, where the conflict of corporate cultures may threaten the continuity of the new company, Sprint Nextel aims to involve its stakeholders in managing the brand and to turn them into promoters.

Sprint Nextel experienced rapid growth after implementing this strategy. Thanks to clever brand and reputation management the company has learned to overcome initial threats of the conflict of two cultures during the merger. When this phase was completed, Sprint Nextel became one of the largest U.S. telecommunication companies. This success is due to the three changes in the management model: emphasis on reputation management and creation of long-term value; change of focus towards innovation and honesty; and, finally, reputation management via determining the circle of trust with its stakeholders.

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Sprint nextel the management of the brand for the benefit of reputation and corporate culture Sprint nextel the management of the brand for the benefit of reputation and corporate culture Document Transcript

  • CasesStrategy PapersC08/2011ReputationSprint Nextel: Themanagement of the brandfor the benefit of reputationand corporate culture In a merger case, many companies find the continuity of the new company difficult due to the clash between corporate cultures. This is not the case of Sprint Nextel, who has known how to manage its brand by involving stakeholders and turning them into developers. Sprint Nextel Corporation is a telecommunica- this point, only the DirCom and the CEO firmly tions company who owns the third largest wireless believe in the value of reputation, while the rest telecommunication network in the United States. of the executive team is still somewhat sceptical. In the American market, it places itself just behind The Communications Director believes that the other companies such as Verizon Wireless y AT&T hardest thing is for the directors from the different Mobility. It provides mobile phone services, areas to understand that what happens in each broadband Internet connections, and private com- of the departments affects the rest, as they are all munications networks. One of their main clients interconnected; and this as a whole has an impact on is the American government. It currently has 49 reputation. Therefore, multifunctional committees millions clients, who back up the success of the have not yet been created, as they are still not company and its good reputation. backed by all of the areas in the company. On the other hand, in the United States Sprint Nextel is Relating to its management, Sprint Nextel defines perceived as a leader company in sustainability. The itself as “The Now Network”. Its CEO believes Communications Director considers that CSR is a in corporate reputation and he boosts it by using driver for clients. RepTrak as an investigation tool and a key performance indicator. The challenge faced by the Despite being the third largest telecommunications Communications Director is trying to convince company in the United States, the early years of the rest of directors that reputation management Sprint Nextel were not the best. The company will bring long-term benefits. This means that, at suffered from initial strains caused by the clash ofDocument created by Corporate Excellence ñ Centre for Reputation Leadership quoting from, among other sources, the interventionson the Sprint Nextel case in the 15th International Conference in New Orleans on Corporate Reputation, Brand, Identity andCompetitiveness, on May 2011.
  • Sprint Nextel: The two different corporate cultures, as a consequence Simplicity: Strategic managementmanagement of the of the merger between two companies: Sprint andbrand for the benefit of Sprint Nextelof reputation and Nextel. These conflicts were even seen outside thecorporate culture company, remaining visible in their poor client Transparency and Openness: Internal support. Actions caused serious damage to the • Engagement to employees through Management transparency. brand, creating a competitive situation which was • Networking of all employees. • Involvement of employees to openly very unpleasant for the company. collaborate on improving the experiences of the brand. Beginnings and merger problems Sprint Nextel: Sprint Nextel was created in 2008, as a consequence Simplicity of the acquisition of Nextel Corporation by Sprint Innovation: • Vanguard technology: Corporation in 2005. During these years, the - First to introduce in market 4G technology executive team focused on trying to resolve the External • Improved product offerings: internal problems which come up in every merger: Management - Terminals and Applications • Better communication: homogenisation of corporative cultures. The - Advocacy of the circles of trust. integration project caused a huge impact through bad Source: Sprint Nextel, 2011. client support, and this resulted in the company’s lost of both competitiveness and consumers. The brand was seriously affected. Their degree of competition the idea of transparency. Thanks to it all, the fell by 10 points bellow the average, affected by the company has managed to interconnect all of their word of mouth, the satisfaction of employees and employees who now can exchange perspectives, their level of involvement, and their position in the opinions, and points of view. This, together with RepTrak Pulse. the freedom they are given to complain openly, without censorship, about the leadership, with the Simplicity as the key to management aim of improving proactively. All of these points In this context, the CEO thought that the results of have brought good results to the company, who has the brand’s construction and of its reputation could managed to compromise and include its employees only be expected in the long-term. This is why he in the mission and vision of the company. As a decided to restructure the company from the inside consequence, Sprint Nextel has given the green to the outside by improving services, and introducing light for their employees to openly cooperate with financial and terminal portfolio’s improvements; all the brand. Employees are constantly in contact of it based in the idea of simplicity. with clients through the Call Center services and through sales points. This means that they are the thermometer and the connection between the “The results of the brand’s company and its consumers. The company has construction and of its managed to involve them both in the mission and vision of the company to the extent of turning them reputation could only be into brand ambassadors. expected in the long-term” Confidence circles In order to do so, in all of the speeches aimed at the Reputation works in the same way as confidence stakeholders of the company, the CEO has always circles. We bring to the light the well-known included the idea of long-term, especially pointing image of throwing a stone in the water. When out the value of simplicity through frankness we do this, we can see how concentric circles are and innovation both internally (employees) and formed from the initial point where the stone externally (to clients). falls and how they expand. From this theory we consider that those who are closest to the reality Thanks to this concept of simplicity, one of the of the company are the own employees. Employees aspects in which the company has decided to focus are the ones who really know the reason for which on is innovation as the central axis of its internal the organisation exists, they know what and why and external management. This has been reflected we do what we do. in their actions, which have allowed them to be in the forefront of world telecommunications within In this way, the first confidence circle which a their category (being the first ones to have brought company must build is with those who are closest 4G technology to the American market) vis-à-vis to it: employees. On this basis, it can establish their customers. further circles with other stakeholders. Another approach related to simplicity which the In this sense, Sprint Nextel has defined its company has known how to deal with internally is stakeholders in confidence circles by positioning frankness. They have managed to engage employees employees as a top priority, followed by clients, and by being honest with them, and this has enabled lastly non clients of the company. Cases 2
  • Sprint Nextel: The 1. In its first confidence circle, the company Circles of trustmanagement of the propelled its employees into advocacy (as abrand for the benefitof reputation and recommendation of the company) through • Training employees on socialcorporate culture social media. The idea is based on the belief networks (Facebook and Twitter). that if every employer has approximately 100 • Promotion of advocacy in the contacts of their employees contacts in their social networks, and the within their social networks. company has 100 employees and each one of • Identification and selection of them belongs to these social networks, there Sprint clients who recognize the good service of the company. would be an impact of 100 for every 100 Nextel • Encourage the recommendations of the brand in social networks people who would receive a recommendation in all contacts within their social Employees networks. from the own employees. And if these 10,000 Clients people receive this recommendation and they • Advocacy confidence circles No customers 1 and 2. themselves have another 100 contacts to who • Communication campaigns, advertising and promotion. they can recommend the brand, there would be an impact of 10,000 for every 100, and so on. This leverage factor can have a great effect Source: Sprint Nextel, 2011. on a small company with no more than 100 employees, but a much greater one in medium and large companies. Conclusions Sprint Nextel has experienced an important growth 2. The second confidence circle has been managed since this new strategy was implemented. The in the same way though it is not aimed at all company has known how to deal with the initial users. The company identified those clients strains caused by the clash of its two cultures thanks who rate their quality services as very good, and to the management of the brand and its reputation. offered them the possibility of becoming brand Once this stage was achieved, the company has developers in social networks. By doing this they become one of the largest telecommunication have managed both recommendations from the undertakings in the United States. All of this is due brand towards consumers or final clients, but also to three changes in its management model: their from consumers towards the company. This way, call for reputation management and its creation as a social networks act as a route for fresh ideas. long-term value, their change of approach towards innovation, and lastly the good management of 3. With this scheme, clients become brand confidence circles with stakeholders. They have all ambassadors towards the non clients, which are enabled employees to do advocacy with clients, and those positioned in the third confidence circle. clients to do the same with non clients. This builds up more credibility than the one which would be created by the company in the first place through its own conventional media, publicity or promotions. “Reputation works in the same way as confidence circles, and it is built from the inside to the outside” The construction of a strong brand and its reputation in managed from the inside to the outside. This management scheme starts with the creation of confidence circles with stakeholders, being them in this case employees, clients and non clients, with the aim of turning them into brand developers. In order to measure those actions, Sprint Nextel uses mainly two monitors: RepTrak, as a control panel, and Net Promotor Score, to analyse the index of propensity of clients and employees to recommend the brand. Both of them, along with the satisfaction data of clients, and the commitment data of employees are the tools used by the CEO when taking strategic decisions in the company. Cases 3
  • ©2011 Corporate Excellence - Centre for Reputation LeadershipFundación empresarial creada por grandes empresas para profesionalizar la gestión de los activos intangibles y contribuir al desarrollo demarcas fuertes, con buena reputación y capaces de competir en los mercados globales. Su misión es la de ser el motor que lidere y consolidela gestión profesional de la reputación como recurso estratégico que guía y construye valor para las empresas en todo el mundo.Aviso LegalEste documento es propiedad de Corporate Excellence – Centre for Reputation Leadership y tiene por objetivo compartir el conocimientoempresarial sobre la gestión de la reputación, marca, comunicación y asuntos públicos.Este documento se dirige, de modo exclusivo, a su destinatario y contiene información confidencial, sujeta al secreto profesional, cuyadivulgación, copia o utilización no autorizada es contraria a la Ley. Si recibe este documento por error, le rogamos nos lo comunique deinmediato y lo elimine sin conservar copia del mismo.Corporate Excellence – Centre for Reputation Leadership es titular de los derechos de propiedad intelectual sobre las imágenes, textos,diseños, o cualquier otro contenido o elementos de este producto y dispone de los permisos necesarios para su utilización, y por lo tanto,queda prohibida su reproducción, distribución, comunicación pública y transformación, sin autorización expresa de su titular.