Capellas gives WorldCom 100 days

Customers last week said their spirits were buoyed by new WorldCom Chairman and CEO Michael Capellas’ 100-day plan, which includes a renewed focus on customer service and the promise of improved business services.

CLINTON, MISS. – Customers last week said their spirits were buoyed by new WorldCom Chairman and CEO Michael Capellas’ 100-day plan, which includes a renewed focus on customer service and the promise of improved business services.

“It was very positive. He did a great job of trying to motivate employees. I’m sure they needed someone to wave a flag,” says Roderic O’Connor, CTO at financial services firm Putnam Lovell, NBF in San Francisco. “As a customer I liked that. I also liked that he talked about customer support issues.”

“Kudos to him for trying to motivate employees and customers after all of the layoffs and bad press,” says Wes Thurmond, director of enterprise networks and computing at Maxxim Medical, a Waltham, Mass., medical products maker and distributor that uses WorldCom frame relay, IP VPN and managed firewall services.

In addition to addressing business customers’ specific needs, Capellas outlined goals of filing a reorganization plan to emerge from bankruptcy, putting a new management team in place and enhancing consumer long-distance offerings.

“We will define our future over the next 100 days, and we will do so with an outrageous, outrageous sense of urgency,” said Capellas, speaking in front of employees in an Atlanta sales office and to other employees, industry watchers and customers via a Webcast.

To reaffirm customer relationships shaken by WorldCom’s financial problems, the carrier is forming customer focus groups consisting of top CIOs, said Capellas, a former CIO himself. These groups regularly will offer feedback to WorldCom on what’s working well and what needs improvement, he said.

Capellas said the carrier’s customer service push will be felt at the highest levels of the company. He is appointing key executives as point people for WorldCom’s top 50 to 100 business accounts.

Maxxim Medical’s Thurmond says he actually hasn’t seen any drop-off in customer service or network reliability at WorldCom during its troubles, but says the carrier needs to better integrate its divisions.

“Thankfully I’m not the one here who has to deal with it, but WorldCom’s billing systems are still not fully integrated,” he says. Although there is communication among legacy UUNET and MCI network operation centers where there was none two years ago, he says.

Capellas didn’t specifically address network or billing system integration, but said there is a renewed focus on product development across multiple platforms.

“Our foundation was built on creative new products. . . . We have to get back to development,” he said. Based on the company’s IP and traditional data networks, Capellas also said WorldCom should be the leader for IP-based converged services.

That message appealed to Putnam Lovell’s O’Connor.

“We’re using WorldCom’s Private IP service based on [Multi-protocol Label Switching] where we integrate voice and data,” he says. “We’re glad to hear [WorldCom] is focusing on convergence, because that probably means our service won’t go away.”

WorldCom expects to introduce voice-over-IP and VPN service enhancements by February, says Ron McMurtrie, the carrier’s vice president of global business marketing.

WorldCom also is readying products for small and midsize businesses – a market Capellas said the carrier should “own.” Businesses that fall into this category are not known for spending large amounts with carriers, but McMurtrie says these can and will be profitable services.

“Margins are good. And we can only offer products that can be profitable on their own,” he says. While Capellas runs the company, WorldCom’s creditors would put the kibosh on any product developments that might not be profitable, McMurtrie says.

Capellas said in the next 100 days, the company will receive a report from board members with a complete review of events involving WorldCom’s financial improprieties. “Some [employees] will be leaving the organization based on our zero-tolerance policy,” he said.

Capellas has set up a new office of ethics to build trust and integrity. He said his management team will lead by example.

Maxxim Medical’s Thurmond says that while Capellas’ plan is encouraging, it’s too soon to gauge how much the carrier will really change.

“We’ll know in 100 days,” he says.