A with Qwest's new chairman and CEO, Edward Mueller
By Jeff Smith, David Milstead and Rob Reuteman
Rocky Mountain News
Thursday, August 15, 2007
Dennis Schroeder © The Rocky
said Tuesday that Dick Notebaert first called him informally
about a potential job last winter, then stayed behind the scenes
while a search firm handled the recruiting process in June.
Mueller, a 34-year telecommunications veteran who most recently
worked as CEO of the specialty retailer Wi-liams-Sonoma, said he
was attracted to Qwest's ability to improve its cash flow and
customer service despite keeping a tight rein on expenses. He
said he, too, likes a disciplined approach.
Thomas Seltz, a telecommunications analyst with Lehman Brothers,
welcomes that approach, and on Tuesday raised Qwest to
"overweight," or a buy from a neutral rating.
In an interview with the Rocky Mountain News at Qwest's
corporate headquarters in Denver, Mueller talked about how his
retail experience may be applicable to his new job at Qwest.
He also talked about the service problems he inherited at
Ameritech in 2000, and how he and departing CEO Notebaert became
Mueller wore dress slacks, a white dress shirt and
yellow-patterned tie, in contrast to Notebaert's typical attire
of Qwest-branded clothing. He quipped that he might not know
how often he will be donning Qwest-logo shirts until he gets out
of the "interview process."
Excerpts of the interview follow:
Why are you getting six weeks of vacation? (actually paid
time off, sick days count against the total)
Actually, I'll never take that much vacation -- it's just part
of the contract. That's the truth. I think it would be a real
stretch to think you'd come on one of these jobs and then you'd
go take vacation. It just doesn't work that way.
Why did you take this job, anyway?
You sound like I'm not too bright.
You were kicked back, you were retired for a year.
First, I love business -- the honest truth. Secondly, I had no
plans to come back. I was on (company) boards, I was helping
some small companies (run) by some friends of mine. We'd just
finished our house in Scottsdale, Ariz. We had one more year to
get my stepdaughter out of school (in Marin County, Calif.). So
things were going good. I was playing golf, having a fun time,
traveling, doing things with my family, fishing. Out of the
clear blue, Dick had called me back in February or March and
asked if I would be interested in going back to work. (I said
at the time), "Dick, are you nuts? I'm having a good time. Is
it a good job?" (He said), "Well, I think it is." He said,
"Send me your bio," and I sent the bio.
(In) June, I hear from a search firm and they say, 'Would you be
interested in Qwest?' Dick had never revealed anything. It had
been more friendship with Dick, and he had tried to recruit my
business (when Mueller was CEO of Williams-Sonoma).
Did he succeed (in getting the Wil-liams-Sonoma contract)?
No, he didn't. MCI was in bankruptcy, and we had a relationship
with them. And they were actually giving the business away
because they didn't care about the profit. They cared about
retaining the revenue.
He just wanted to hang out with you for a few days? (Notebaert
stayed with Mueller at his home in the San Francisco Bay area.)
No, he really thought he could get it, but he didn't. He had
the best real bid and best creative bid actually, but that was
three or four years ago.
So, fast-forward to today and I said, "Wow, this (possible job
at Qwest) is interesting." I had all the public data at my
fingertips. The first thing that tripped me in a good way was,
"These guys have come from nowhere to a lot of great cash flow."
And, secondly, I liked their position of not overspending. They
had some reductions in cost, obviously, but they didn't go,
"What's the next greatest technology? We have this extra cash.
Let's now get nuts." They were really, really disciplined,
which I am.
Then, the third thing was that the service was not only OK, but
(also) it had gotten better.
Those are not combos that generally come together, free cash
flow, improved service and disciplined capital. That spoke
volumes. They had to have built down to the grass roots to get
this done. And that was exciting to me because I like teams,
big organizations. I like service-oriented things. I learned a
lot in retail (with Williams-Sonoma). The business (Qwest) felt
like coming home.
Does the current Qwest feel as much like Williams-Sonoma as
the old Ameritech?
I can't tell yet, but (at) the employees meeting (Monday), you
could see heads nodding. I could feel the energy, that this
made sense to them (the combination of telecommunications and
retail experience). And I like there's way less regulatory
overhang today in the telephone market than there was even five
years ago when I left. I like that now the best marketer, the
best service provider has a shot at winning without spending a
lot of resources.
What did you learn at Williams-Sonoma in terms of Internet
strategies that might be applicable here?
It's got to be marketed. It's not just Google Williams-Sonoma.
So, as a user, it's going to be very helpful for me here. Call
centers, how you would place an order, and then how you would
service that (order). I think that's very applicable from a
Do you anticipate bringing in a lot of your own people?
No. This would be a natural assessing, as any boss would do,
even if Dick were here. We're not in a crisis. The fun thing
here is they've done a really good job.
You said Dick had done a lot of the heavy lifting. What's
the biggest obstacle for you right now?
We have to build revenue. We have some of our revenue streams
going down, some going up. (The challenge) is to get it moving
faster than it's moving today.
One of the first times your name really started showing up in
the papers was with the Ameritech service issue (Mueller, who
was with SBC, became Ameritech CEO in 2000, soon after the
companies merged). Talk about what that was like for you.
I'm not necessarily wanting to be Googled and found, if you get
my drift there. I like the anonymity if you can keep it there.
I spent all of my career in operations, growing up in the Bell
system. And I had a lot of tough service problems, like we all
did, because there was so much growth from the late '60s to the
late '90s, until the bubble broke. It was a good run for the
telephone business. So, I had had plenty of service problems,
but nothing of the magnitude I had faced in Chicago (with
Our company (SBC) had made an acquisition, so there were a lot
of promises, a lot of government oversight. You had a lot of
expectations, and then our service became very poor. I had a
pretty nice job at the time. I was doing international work
(for SBC), and for a kid who grew up in Missouri and really
didn't get on an airplane until I was 18, it was, "Now I'm in
Europe. Isn't America great?"
And then my chairman (Ed Whitacre) called me and said, "You're
going to go to Chicago." Because it was so public and we were
so bad that customers were jumping up and down, you can imagine
the first interview wasn't as pleasant as this one. And then
regulatory commissions, all five states (Illinois, Indiana,
Michigan, Ohio and Wisconsin), all came to Chicago and we had to
stand for a day, the chairman and myself, taking their
questions: "What are you really going to do to fix this?"
Some SBC executives had ill feelings toward Dick (Notebaert,
a former Ameritech CEO who some blamed for neglecting the
infrastructure before the completion of the merger. A large
number of retirements also took their toll.)
I had no ill feelings toward Dick. Dick (who had left Ameritech
by then) was very engaging when I got there. Dick was very open
to whatever it takes. "I'm here to help you," which I thought
was extraordinarily admirable character. He didn't have to do
that. He even said one day, "Honestly, if you want to blame me,
just put it out there." I said, "That doesn't do us any good."
We had a lot of work to do. I appreciated him helping me out in
the community. Dick would introduce me to customers, to
business leaders, to the political scene, mainly so I could get
our story out, to pledge and get things done. I knew Dick for
some time before that, but then you really get to know somebody.
So this (opportunity at Qwest) had a big draw for me with Dick
being a supporter, which I didn't know until I got with the
(Qwest) board, Dick saying this is a good job. This had a great
deal of weight on my decision.
What about civic involvement?
I personally love education. That's just a passion of mine. My
wife and I will be empty nesters. I want to be involved in
Denver. I think this is a neat community because it's small and
big enough to bring resources to help things.