clock menu more-arrow no yes

Filed under:

CEO takes Qwest to new heights

DENVER — 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 from the engineering side to lead the consumer long-distance division.

Spurned by AT&T for its top job four years ago, Nacchio was about to become a chief executive of a technology firm when a friend urged him to interview at a startup that had visions of becoming a telecommunications leader.

Nacchio made the leap to Qwest Communications International Inc. after meeting its reclusive financier, billionaire Philip Anschutz, and sensing the firm was onto something big.

With Nacchio at the helm, Qwest became a player of reckoning in the telecommunications field, last year acquiring Baby Bell US WEST Inc. for a deal worth $47 billion — $35 billion in a stock swap and assumption of $12 billion in debt.

"You make a lot of your life off opportunities," says Nacchio, 52. "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 has parlayed that philosophy, late hours in his 50th-floor office and a shrewd knowledge of game strategy into an Internet, broadband and telecommunications company with 30 million customers. Revenues grew 14 percent last year and were expected to grow 11 percent this year to between $21.3 billion and $21.7 billion.

Qwest was born of an idea to lay fiber-optic networks along rights-of-way owned by Anschutz at Southern Pacific Railroad. Under Nacchio's watch, Qwest finished its 25,500-mile network speed Internet and wireless services, are keeping Qwest ahead, Nacchio maintains.

Telecom industry analyst Jeff Kagan said Nacchio's team reminds him of the early MCI entrepreneurs, who were in-your-face loud and flew by the seat of their pants. Much of Qwest's spirit stems from Nacchio, who arrived costumed as a member of the television hit "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."

Whether on the road or behind a desk, Nacchio has earned descriptions as aggressive, confident, swaggering.

In 1998, Qwest acquired LCI, 10 times its size at the time. A year later came US WEST.

"He's got a lot of rough edges," Kagan said, "but that's what you need to not take no for an answer."

Nacchio acknowledges he and former US WEST chief executive Sol Trujillo didn't get along. Trujillo has long left. Nacchio bristles, though, at one magazine's idea to compare him to actor Joe Pesci in the movie "Goodfellas."

"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 De Niro."

Former US WEST executive and fellow New York Italian Peter Mannetti was one of the few in senior management to join Qwest's executive circle.

As wireless chief for both, Mannetti 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 calls Qwest the largest startup in America.

But until AT&T chose an outsider over him for the top job in 1997, he wanted to run a giant.

"I didn't know better," Nacchio says laughing, before adding he was becoming disillusioned and wanted to be an entrepreneur anyway.

This for a man who spent much of life in one New York borough or another, except for the time AT&T sent him to Cincinnati, where he met his wife. Nacchio spends weekends at home in New Jersey but now sleeps most often in Colorado.

That's where he reminds employees of his words for success: Serve customers well; save cash. It's where he's 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," Nacchio said.