Sprint Nextel Corporation is a telecommunica-tions company who owns the third largest wireless telecommunication network in the United States. In the American market, it places itself just behind other companies such as Verizon Wireless y AT&T Mobility. It provides mobile phone services, broadband Internet connections, and private com-munications networks. One of their main clients is the American government. It currently has 49 millions clients, who back up the success of the company and its good reputation.

Relating to its management, Sprint Nextel defines itself as “The Now Network”. Its CEO believes in corporate reputation and he boosts it by using RepTrak as an investigation tool and a key performance indicator. The challenge faced by the Communications Director is trying to convince the rest of directors that reputation management will bring long-term benefits. This means that, at

this point, only the DirCom and the CEO firmly believe in the value of reputation, while the rest of the executive team is still somewhat sceptical. The Communications Director believes that the hardest thing is for the directors from the different areas to understand that what happens in each of the departments affects the rest, as they are all interconnected; and this as a whole has an impact on reputation. Therefore, multifunctional committees have not yet been created, as they are still not backed by all of the areas in the company. On the other hand, in the United States Sprint Nextel is perceived as a leader company in sustainability. The Communications Director considers that CSR is a driver for clients.

Despite being the third largest telecommunications company in the United States, the early years of Sprint Nextel were not the best. The company suffered from initial strains caused by the clash of

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: The management of the brand for the benefit of reputation and corporate culture

Reputation

Strategy PapersC08/2011

Cases

Document created by Corporate Excellence ñ Centre for Reputation Leadership quoting from, among other sources, the interventions on the Sprint Nextel case in the 15th International Conference in New Orleans on Corporate Reputation, Brand, Identity and Competitiveness, on May 2011.

Cases 2

two different corporate cultures, as a consequence of the merger between two companies: Sprint and Nextel. These conflicts were even seen outside the company, remaining visible in their poor client support. Actions caused serious damage to the brand, creating a competitive situation which was very unpleasant for the company.

Beginnings and merger problemsSprint Nextel was created in 2008, as a consequence of the acquisition of Nextel Corporation by Sprint Corporation in 2005. During these years, the executive team focused on trying to resolve the internal problems which come up in every merger: homogenisation of corporative cultures. The integration project caused a huge impact through bad client support, and this resulted in the company’s lost of both competitiveness and consumers. The brand was seriously affected. Their degree of competition fell by 10 points bellow the average, affected by the word of mouth, the satisfaction of employees and their level of involvement, and their position in the RepTrak Pulse.

Simplicity as the key to managementIn this context, the CEO thought that the results of the brand’s construction and of its reputation could only be expected in the long-term. This is why he decided to restructure the company from the inside to the outside by improving services, and introducing financial and terminal portfolio’s improvements; all of it based in the idea of simplicity.

“The results of the brand’s construction and of its reputation could only be expected in the long-term”

In order to do so, in all of the speeches aimed at the stakeholders of the company, the CEO has always included the idea of long-term, especially pointing out the value of simplicity through frankness and innovation both internally (employees) and externally (to clients).

Thanks to this concept of simplicity, one of the aspects in which the company has decided to focus on is innovation as the central axis of its internal and external management. This has been reflected in their actions, which have allowed them to be in the forefront of world telecommunications within their category (being the first ones to have brought 4G technology to the American market) vis-à-vis their customers.

Another approach related to simplicity which the company has known how to deal with internally is frankness. They have managed to engage employees by being honest with them, and this has enabled

the idea of transparency. Thanks to it all, the company has managed to interconnect all of their employees who now can exchange perspectives, opinions, and points of view. This, together with the freedom they are given to complain openly, without censorship, about the leadership, with the aim of improving proactively. All of these points have brought good results to the company, who has managed to compromise and include its employees in the mission and vision of the company. As a consequence, Sprint Nextel has given the green light for their employees to openly cooperate with the brand. Employees are constantly in contact with clients through the Call Center services and through sales points. This means that they are the thermometer and the connection between the company and its consumers. The company has managed to involve them both in the mission and vision of the company to the extent of turning them into brand ambassadors.

Confidence circlesReputation works in the same way as confidence circles. We bring to the light the well-known image of throwing a stone in the water. When we do this, we can see how concentric circles are formed from the initial point where the stone falls and how they expand. From this theory we consider that those who are closest to the reality of the company are the own employees. Employees are the ones who really know the reason for which the organisation exists, they know what and why we do what we do.

In this way, the first confidence circle which a company must build is with those who are closest to it: employees. On this basis, it can establish further circles with other stakeholders.

In this sense, Sprint Nextel has defined its stakeholders in confidence circles by positioning employees as a top priority, followed by clients, and lastly non clients of the company.

Sprint Nextel: The management of the brand for the benefit of reputation and corporate culture

Source: Sprint Nextel, 2011.

Simplicity: Strategic management of Sprint Nextel

Transparency and Openness:•Engagementtoemployeesthrough

transparency.•Networkingofallemployees.•Involvementofemployeestoopenly

collaborate on improving the experiences of the brand.

Innovation:•Vanguardtechnology:

- First to introduce in market 4G technology

•Improvedproductofferings:- Terminals and Applications

•Bettercommunication:- Advocacy of the circles of trust.

Internal Management

External Management

Sprint Nextel:Simplicity

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1. In its first confidence circle, the company propelled its employees into advocacy (as a recommendation of the company) through social media. The idea is based on the belief that if every employer has approximately 100 contacts in their social networks, and the company has 100 employees and each one of them belongs to these social networks, there would be an impact of 100 for every 100 people who would receive a recommendation from the own employees. And if these 10,000 people receive this recommendation and they themselves have another 100 contacts to who 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 on a small company with no more than 100 employees, but a much greater one in medium and large companies.

2. The second confidence circle has been managed in the same way though it is not aimed at all users. The company identified those clients who rate their quality services as very good, and offered them the possibility of becoming brand developers in social networks. By doing this they have managed both recommendations from the brand towards consumers or final clients, but also from consumers towards the company. This way, social networks act as a route for fresh ideas.

3. With this scheme, clients become brand ambassadors towards the non clients, which are those positioned in the third confidence circle. 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.

ConclusionsSprint Nextel has experienced an important growth since this new strategy was implemented. The company has known how to deal with the initial strains caused by the clash of its two cultures thanks to the management of the brand and its reputation. Once this stage was achieved, the company has become one of the largest telecommunication undertakings in the United States. All of this is due to three changes in its management model: their call for reputation management and its creation as a long-term value, their change of approach towards innovation, and lastly the good management of confidence circles with stakeholders. They have all enabled employees to do advocacy with clients, and clients to do the same with non clients.

Sprint Nextel: The management of the brand for the benefit of reputation and corporate culture

Source: Sprint Nextel, 2011.

Circles of trust

Sprint Nextel

Employees

Clients

No customers

•Trainingemployeesonsocialnetworks (Facebook and Twitter).

•Promotionofadvocacyinthecontacts of their employees within their social networks.

•Identificationandselectionofclients who recognize the good service of the company.

•Encouragetherecommendationsof the brand in social networks in all contacts within their social networks.

•Advocacyconfidencecircles1 and 2.

•Communicationcampaigns,advertising and promotion.

©2011 Corporate Excellence - Centre for Reputation LeadershipFundación empresarial creada por grandes empresas para profesionalizar la gestión de los activos intangibles y contribuir al desarrollo de marcas fuertes, con buena reputación y capaces de competir en los mercados globales. Su misión es la de ser el motor que lidere y consolide la gestión profesional de la reputación como recurso estratégico que guía y construye valor para las empresas en todo el mundo.

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