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- [00:00]
Indiana University Announcer
Indiana University strengthens tomorrow's workforce with practical, real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu.edu impact,
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Podcast Host Intro
Bloomberg Audio Studios Podcasts, Radio News it's always great
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Podcast Host
to have the CEO of a company that you've been a customer of for like most of my adult life. So I' all my grievances, I'm just going to bring them to the table here. In all seriousness, you've been CEO of Verizon since October. Something of a homecoming for you, having grown up at AT&T. Getting Virgin Mobile off the ground when it comes to running a wireless company. And you had that long interlude in the middle at PayPal, so we'll talk about that later. But what are the old rules no longer apply?
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Verizon CEO
Well, I think we live in a time right now of change I've really never seen before. The pace of change is dramatic. I say inside the company right now, anytime the pace of change outside is greater than the pace of change inside, we're falling behind. And that's, that's a really high bar to get over. I think there's some similarities and some differences. I mean, way back when, when I was at AT and T, you know, we're a big bureaucratic company. Verizon is a big bureaucratic company. It loves its processes, it loves to show its work. But like I'm about outcome and how fast can we move the company forward. We're very risk averse and I get that. Like there should be places where we are risk averse when it comes to cybersecurity, when it comes to the integrity of our financial numbers. Like, my tolerance for risk is like a one. But for the most part, my tolerance for risk, for trying things and failing fast and then learning from it and moving forward is like an 8 or 9. And I think in general the company's probably had a 2 to 3. We're very hierarchical. I need to be very careful what I say.
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Podcast Host
Yeah.
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Verizon CEO
Because it's taken as, as gospel. And the truth of the matter is things are changing so fast. Like, you know, I'm always learning. I can't predict the future. I can try and do my best to ascertain like the direction of it, but I'll frequently be wrong on that as well.
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Podcast Host
It's still less than a year that you've been there, but how do you get from that? You said around 2. In those areas of areas where you want to see people take More risks. How do you get closer to that 8, 9 level of tolerance?
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Verizon CEO
Well, I think you or I don't know if you would, but, you know, I think leadership is like three things in my view. The first is to clearly define reality. And nobody really wants to hear that. To tell you, certainly my first coming on stage in front of all the employees of Verizon. Yeah, I had no slides, no nothing on screen, no talk track. Just kind of like what I saw. And what I saw was a company that was losing in the market. We had lost market share for five straight years. We had gone from being number one in market cap to being last. Our forward P was blast in the market and terrible. And so I kind of laid that out for everybody and, and I think we had just gotten used to gently seething market share as opposed to playing to win. And that just doesn't work for me. I mean, that's just not who I am. You know, when I first came in, I think people were scared because I said that, you know, we wanted to play to win, we wanted to stop losing market share and start gaining market share. And people were worried that was going to lead to, you know, a price war. But that, that's not the way that you compete. Like, anybody can compete on price. Price is easy. It's about competing on other parts of the value proposition where you can actually differentiate yourself and create lasting value. Like if somebody puts a promotion out there, like, I can match it now in two hours. So that's. There's no competitive advantage to that. So I think it's really about laying out the reality of where you are. And people don't want to be part of a losing team. And then the second thing a leader needs to do is inspire. Lay out a vision of what you want to do, how are you going to reclaim your market leadership, and then clearly lay out the path between reality and that vision. And like, how are we going to get there? And over what time frame and what things are we going to chew off first and start to work on? So it, it is going probably faster than I imagine. I'm proud of the team. I don't like giving out compliments that easily, but I am proud of where they are. There's a lot more work to do.
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Podcast Host
So you've talked about, you've given hints on some of that work that you want to do. Moving away from low margin, highly promotional activity, simplified promotions, simplified plans. Put some more flesh on those bones for us. What does that look like?
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Verizon CEO
Well, I think at the end of the Day. The reason people leave Verizon is one, when we price up with no incremental value. And we had done that for three years in a row. We had done something like 30 price ups with no incremental value. And that obviously distresses customers. And so we had started to see our churn go up. I told the company, like, the first rule, rule of getting out of a hole is stop digging. And so we're just not going to raise prices without any corresponding value. And I'm beginning to see that as our churn starts to come down. Yeah. The second is friction in the, in the process. When you come into our store, how quickly can we help you? When we sell you something, does that, is that reflected on your first bill? When you call into customer service, do you get somebody who's empathetic, does do what they see, match with what you heard in the store and on your bill. And that's really, really difficult. That's the end to end customer experience. And that's hundreds, if not thousands of things that you need to do better. And we are focused on every single one of those just incrementally getting better. Because I feel if we can have the best end to end customer experience, that's real differentiation because it's very hard to imitate and it's extremely hard to do, but extremely appreciated by customers.
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Podcast Host
It's, it's going to be hard for me as a customer who's been with Verizon for a very long time to notice even many incremental things I might understand. Okay, yeah, I do have a better. But is it better customer experience? But there's something concrete that I should look forward to to keep me from taking that offer from T Mobile or whatever.
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Verizon CEO
Yeah, there will be.
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Podcast Host
Can you give us a little bit more of an indication?
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Verizon CEO
No,
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Podcast Host
I, I want to be conscious of your point.
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Verizon CEO
I mean, I mean the, the answer still is no, I won't. But, but I think that when we talk about kind of this end to end value proposition, there are little things, there are bigger things, there's. How do you simplify things? How do you add elements of loyalty into what you're trying to go do? And so, you know, my view is there's never a big bang in what you're going to do in front of customers. Because if you can do a big bang, then your competitors can do a big bang. It's really, it's, unfortunately, it is like having a long term plan. And every, as I say, inside the company, every single day matters. Like, I want to See incremental improvement every single day. And so learning to use the tools of our time, whether that be AI in how we serve customers much better, whether it be specific offers we put in front of you, elements of the value proposition. So when you see things, expect that there will be other things a month from now, the next month, the month after, because it's got to be a steady drumbeat of improvements.
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Podcast Host
When it comes to using, encouraging your staff to use AI tools, what's your stature? What's your stance on that? And specifically, I think early on, a lot of businesses were saying, hey, get out there, Use as much as you want. Create things, create chat bots, build agents. Have you had to become more disciplined about that? And what are your, what is, what are your marching orders when it comes to using AI tools to make either the workplace or the customer experience better?
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Verizon CEO
Well, I'm pretty outspoken on, on AI, as some of you may know. And I think as leaders of companies, I think we have a responsibility to talk about what could happen as a result of implementing AI. It's clear to me that whatever we have right now, these are the worst models that we will ever have in our lifetime.
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Podcast Host
Because don't tell Daniela that.
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Verizon CEO
Yeah, she knows it. Like, she'd be the first to say, I get your point. Yeah. OpenAI is going to release four models, new models, between now and the end of the year. Each one of them will be a step function improvement from where they are today. And so it's clear to me that AI will do at least three things inside the company. It will dramatically improve our productivity levels. It will dramatically improve our ability to satisfy customers. You know, in the last three months, we've been experimenting with agents that are replacing some of our customer service reps. And those agents, their customer satisfaction rate is 1280 basis points better than, than what we had before. Think about that. If it was 50 basis points, that'd be a big improvement. So our ability to satisfy customers, our ability to ingest all of the data around you, like you may think of yourself as one, because we think of you as kind of like the sum total of who, what lines are under your account. Your kids aren't in your account. Where do they call? How do you use it? Do you have a nest associated with your broadband service? And so we need to see all of that to be able to satisfy you. And then finally, AI is going to radically redefine our value proposition. I mean, my view of this is that we have a initiative inside the company called Every Customer has a Name. And that means every customer is individual. How we respond to you should be empathetic. But every part of our value proposition should be tailored to the 300 plus different ways that we can look, look at you and, and tailor a proposition to you.
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Podcast Host
To what extent does AI just completely replace if they're so much better? To what extent does AI replace, replace human customer service agents? Completely,
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Verizon CEO
for sure. You're going to see disruption in, with AI in certain job functions. I don't see how that's not possible. And I don't see how anybody can look people in the eye and say that's not possible.
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Podcast Host
What percentage of customer service gets displaced?
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Verizon CEO
It can be a large percentage of customer service. I think that function, you know, is a function that has a lot of rote parts of it. I forgot my password, you know, what's my billing amount? Those are all simple and easy things for an agent to go do. More complex things will be a combination of human and machines working together to satisfy what that doesn't mean, like you will have functions that will be disrupted for sure. And I don't see how anyone again could say that they won't be, but you will have like. What we're seeing in our customer service right now is the road stuff can be done by agents. More complex is a combination of an agent and a human working hand in hand to be able to satisfy that customer much better than age either of them could do alone. And so I think you'll see all of those things happen. But I'm, I'm going to lean heavy as I think all of my colleagues will, all the Fortune 100 will lean heavy on AI. You cannot be a part of this age without understanding the technological revolution. It'll be AI. I think personally we get to AGI, like some are saying before this now, but I think in the next two to four years we're in AGI. I think in the next four years we're at Quantum. We're already preparing for Q Day as early as two years away because we need to look at all the encryption pieces of this. And then you're at Humanoid Robotics, you know, a couple of years after that, that's all happening. And we, we need to be ready as a society, as leaders of corporations, and then we need to take the responsibility of that. So, for instance, you know, I think I was one of the first pulled together a pretty wide scale. We put aside $20 million to train and reskill people that are impacted by AI.
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Podcast Host
Right?
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Verizon CEO
That's the tip of the iceberg for what we're going to go do, like my view is we have a responsibility to put serious money, resource and effort into training not just our employees, not just people that are impacted, but the communities we serve as well in utilizing AI in a responsible way. But as I say to everybody inside the company, you should not be scared of AI. You need to learn AI. You need to be able to use it in your work, you need to be able to use it in your personal life, because that's the age we live in.
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Podcast Host
One of the first moves you made was a difficult move, admittedly in eliminating a lot of jobs at Verizon to the tune of 13,000. You set up this fund. 20 million. You question, you said that's just kind of the tip of the iceberg. What are some, like, what are some of the early takeaways from that? And what do companies need to do to reskill workers who are affected by, you know, whether they're in customer service or some other area that's affected by AI?
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Verizon CEO
Yeah, first of all, we're training everybody inside the corporation. We do week long events now and that can be from some people don't even know, you know, the right prompts to go use and how to use basic chat bots to being able to gin up agents. You know, we have a whole AI tech stack that we are now implementing, most of which will be done next month in July, all of it finished by November. But you just, you have to move quickly, you have to train. You know, we have 7,000 people in this reskilling that have already applied for that. But as I mentioned, I think our responsibility is to work with government. I'm spending a lot of time down in D.C. to think about how we take our resources, maybe the resources of the Fortune 500 as well. Think about if we're putting 50 to 100 million into it and you multiply that by, you know, my peer set and then what government can do, you can have a lot of money going into thinking about reskilling, retraining and how to really utilize AI as hopefully a force that can unleash the best parts of human humanity as opposed to a force that, you know, could add a lot of stress into our democracy.
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Podcast Host
Speaking of powerful tools, briefly in our last few seconds, I'd like you were out of time. You recently joined. They don't need to know that. Recently joined Project Project Glass Wing. Given your background in, in cybersecurity, give us a sense of now the, that you've had a chance to get in there and test it, how powerful is it? What does it do? Should we be afraid of it?
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Verizon CEO
Well, you should always be concerned about cybersecurity. I mean, it is existential. Everything we do is controlled by software. You know, the elevators you go in, the planes that you, you know, board, your financials, everything. I don't know how much money you have in your pocket right now, but, you know, it's probably not a lot. And all of your wealth is digital in some way. So I think, and you know, a consumer has their identity stolen every two seconds. So I think cyber is existing existential for us. Mythos, which we've been working with as part of glasswing, is a tool that can identify a lot of elements that might not have been seen as critical, but when you link them together, they become a critical infrastructure thing that needs to be repaired. Mythos is very powerful. It's enabling us to identify vulnerabilities, but also fix them quite, quite quickly as well. But it's also forcing us to think about, you know, how we ingest third party vendors into our network and how we everything needs to be patchable remotely. Like within the next couple of months, 85% of everything done in our network. Instead of taking multiple hours or days to figure out what's going on, we will identify it in minutes, go right to the element and fix it autonomously.
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Podcast Host
Lightning round. If the government continues to designate Anthropic a national security threat, given its concerns about how its tools are used in defense, how problematic is that for you as a company?
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Verizon CEO
We have access to it. So, so I would say Mythos had a head start, but all of these models catch up very quickly. I think OpenAI's model around cyber is extremely powerful as well. And as I mentioned, you know, every two to four months, you know, these models double in strength and capacity. So I think Mythos was a real good look look at what the capabilities of these models can do in specific functional areas. And I'm glad because we do a lot for the critical infrastructure of the United States and Mythos is going to help us protect it.
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Indiana University Announcer
Preparing for tomorrow's careers requires forward thinking education. Indiana University graduates are degrees above the competition, building on strong foundations to create new possibilities that make a difference where you live. From teachers and nurses strengthening communities to engineers advancing microchip research, Indiana University is investing in tomorrow's workforce through career ready training. Learn how IU is driving economic growth at iu. Edu Impact.
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The Hartford Announcer
When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies. Risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more@thehartford.com Riskmitigation policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut.