T-Mobile U.S. Chief Executive John Legere is describing items in his office. “My T-Mobile Segway is amongst my top tools … My T-Mobile golf cart. I got a whole bunch of fun stuff … My ‘Yes Man’ … This is (Star Wars toy) Furbacca. He's just to scare people.”
CNBC had an inside tour of Legere’s office during filming for “The Brave Ones” and T-Mobile’s black and magenta-pink brand colors are everywhere, from a construction hat to Batman stickers. That include Legere himself, clad in a black tracksuit and pink high-top sneakers — even his socks feature a picture of a Legere doll, a likeness of him with his swept-back dark hair.
He’s far from your average suited-and-booted CEO and not only does he dress like one of his shop-floor staff members, he’s a Twitter and Facebook obsessive who schmoozes celebrities as well as deal-makers.
But for Legere (it’s pronounced “ledger”), wearing T-Mobile’s distinctive color palette is all part of a serious business strategy he introduced when he joined as CEO back in 2012 — and a way to stand out from much larger competitors AT&T and Verizon. “Magenta's cool. I mean, it scales. People like it. It's not like yellow, you know. And then we just overdid it. We took it to its extremes. And I think we've created a whole new brand around magenta,” he told “The Brave Ones.”
Legere even claims that store staff love their uniforms: “One of the most satisfying moments you can witness any day at 8 p.m. in any city in America, which is, go watch the lights go out at a Verizon store.
“Lights go out, the first thing those employees do is get out of those clothes as fast as they can. Watch a T-Mobile store close and out the door, dressed in as much magenta and T-Mobile as they can, are my employees. And if they change, it’s only to put more on. And that's brand and that's a big deal.”
Brand and marketing have been a large part of T-Mobile’s success since Legere came on board. “We were in a very difficult situation in the U.S. We needed nothing less but a marketing genius in order to turn the company around,” Rene Obermann, the former CEO of T-Mobile parent company Deutsche Telekom, who hired Legere, told “The Brave Ones.”
In 2011, T-Mobile made $20.6 billion in sales, but lost $4.3 billion overall. Legere described it as “a total mess” at the time. AT&T had tried to buy the company that year for $39 billion but failed, and Legere was hired to turn it around.
“(For) a period of a couple of years, this company had been in waiting for a merger, which probably would’ve been the demise of T-Mobile's people and brand,” he told “The Brave Ones.”
“That merger didn't go through, but the company was declining. We were the fastest-shrinking wireless company in America. And we were also a subsidiary of Deutsche Telekom, so not a public company. (We had) no iPhone at the time when everybody had the iPhone. Exactly zero people were covered with (high-speed wireless) LTE in America.”
The challenge for Legere to start with was to shift the organization’s control away from legal and HR and towards employees — breaking the company’s old rules along the way. In his first three days in the job, he discovered that an Afghanistan veteran had been told not to display a platoon photograph on his desk in case it upset people who opposed the war, and that the company did not allow employees to have tattoos or facial piercings.
So he switched things around. “When I see something I disagree with, I ask why, and when I hear the answer, I ask why again. It’s a leadership technique you can learn from a five-year-old,” he wrote in Harvard Business Review in January.
Legere was born in Fitchburg, Massachusetts in 1958, the middle child of five, and life was simple. “Dinner consisted of something in one pot. If you ever see me eat, you'll see that I eat really fast, because if you didn't, you didn’t get anything. My father had whatever money he had was in his pocket,” he told “The Brave Ones.”
He broke the rules from a young age. “I would sit in class and they would ask a question, and I knew the answer because I was pretty smart. But instead, I'd tell a joke and get myself in trouble.”
Legere earned money making fries at a fast-food chain, running a ride at an amusement park, washing floors at a candy store, making plastic cowboy hats and peeling potatoes in a diner – the list goes on. Athletics was his real interest, so he put all his energy into running, which helped to give him his work ethic. “I always remembered coaches telling me: the harder the work, the harder you work, the more luck you'll probably have,” Legere said.
When it came to choosing a university, he turned down an offer from Harvard and picked the University of Massachusetts, based on its NCAA track and field ranking.
After graduating in 1980, Legere joined AT&T as an accountant and got an MBA in 1987 by taking night classes at Fairleigh Dickinson University. A master’s degree from MIT’s Sloan School of Management followed. But in the early years, he still had competitive athletics running in his blood.
“I also went to the Program of Management Development at Harvard. But you know, most of that was later on. I still wanted to go to the Olympics instead,” he said.
Legere ran with the Olympic Torch in 1984, to mark AT&T’s sponsorship of the Games (that partnership is about to end after more than three decades, with Comcast taking over as telecommunications provider in 2018) and his exercise routine now includes his Peloton indoor bike. (“45 min on my Peloton, chicken in the oven for 45 min!! The delicious smell kept me going during the workout!!” Legere posted on his Facebook page in February, next to a selfie of himself in shorts.)
He ended up spending 18 years at AT&T, rising through the ranks of its accountancy program and running installation and maintenance in the Mountain States aged just 28. But he had little technical knowledge.
“I knew nothing. I remember leaning on a PBX (a type of telephone system) and asking the technician: ‘So you want to show me the switch?’ And he said: ‘Yes, sir. You're leaning on it.’ But you know, I learned to manage through other people. And then my first sales job was like a $400 million, $500 million unit,” he said.
Eventually, he became president of the company’s Asia operations, before leaving for Dell in 1998 to run its Asia and EMEA regions. “I left AT&T because I realized that I had a lot more to give, and I wanted to break out of the big hierarchy,” he said.
The Dell role lasted a couple of years before Legere joined telecoms company Global Crossing in 2001 as CEO, taking it through a “really tough” restructuring and eventually selling it to CenturyLink (then Level 3) in 2011.
And then, for the first time in years, he was out of full-time employment.
“I stopped being CEO and got divorced in the same month. I did well in the sale (of Global Crossing). But all of a sudden, I'm home, and it's the first time I ever had to think through the question: ‘What do you do?’ I hated that question. And you know, I don’t know. I'm reading Eckhart Tolle’s (book), ‘The Power of Now,’ and I'm thinking, wow.
“My friends and my doctor said: ‘Dude, you’ve got to go back to work.’ I'm on (dating website) Match … but I did give some thought as to what I was going to do.”
Then a headhunter friend appraoched him with the T-Mobile opportunity. “She was a wonderful woman. So, yeah, I'll go. But the odds of me working for (parent company) Deutsche Telekom are, like, none, you know. I'm thinking, that's not going to happen.”
But he went ahead and met the then Deutsche Telekom CEO Obermann. “Okay, here's the following, like, eight things,” Legere told him. “And if we can agree on these eight things, I'll come. But I'm really not that interested,” he said.
His list included investing in better network coverage, doing a deal with Apple to be able to sell the iPhone to customers and merging with wireless carrier Metro PCS — all of which Deutsche Telekom agreed with.
On a holiday in Capri, Legere made a decision: he would take the job. “Because this has been, and still remains… it's so me and it's so core to what I was made to do. And to think that I even thought about it for more than two seconds is incredible.”
Back in his office during filming for CNBC’s “The Brave Ones,” Legere holds up a bright pink shirt. “When I was in the Philippines, in the call center, they gave me this shirt, which I have yet to find the right occasion to wear.”
It is the call centers that gave Legere vital insights into T-Mobile’s operations when he took over from interim CEO Jim Alling in September 2012: he listened to the conversations his customer service teams were having.
“I got this resounding kind of feedback that people hated wireless. They hated the wireless companies. They would go to a store to buy a phone and they would come out with, like, all this stuff that they hated,” he told “The Brave Ones.”
“Nobody calls to say: ‘I love you.’ They call when they're so frustrated. And I heard the way that they were taking care of them. And it was a big part of me thinking that if I could get the whole company to behave that way and care about that customer so much, that we really could be different.”
So he wrote a manifesto. “We’re not like other wireless companies. Why would we be? They’re in the phone company business. We’re in the changing-the-phone-company business,” it started. Legere broke the rules by doing things like removing long-term contracts and global roaming charges, after an outburst at the Consumer Electronics Show in January 2013 in which he snapped.
“I went on a rant. I said that if a Martian came to Earth and tried to understand the way the wireless industry works, he wouldn’t believe it—he’d go back to Mars,” he wrote in the Harvard Business Review in January.
“Carriers locked customers into long contracts and treated them like crap. Their networks were terrible. ‘I saw more honesty on a Match.com ad than on AT&T’s coverage maps,’ I said.”
According to analyst Walter Piecyk, managing director at BTIG, initiatives such as scrapping contracts and paying termination fees to encourage people to switch from other networks are more than just gimmicks.
“They are paying early termination fees in order to get customers to switch, and everyone followed, so if you look at the major changes that have occurred in the industry, from payment plans (to) turning off termination fees, no contracts, getting rid of roaming (charges), it’s a longer list of things that are precipitated by them doing it first,” he told CNBC by phone.
A major advantage for T-Mobile is that its core business is its wireless network, which protects it to a certain extent, Piecyk wrote in a blog post in September.
“T-Mobile is in an enviable position of building the bundle from scratch with services that consumers actually want and without having to sustain legacy businesses that are in structural decline.
“As a challenger, T-Mobile will continue to pick away at companies (including cable operators) that have to protect their high-margin, free cash-flow-generating businesses. We expect that free cash-flow to stunt the ability of these monopolists to respond, but more importantly, prevent them from making the structural changes to their businesses that would disrupt their entire business models,” he wrote.
Those cable operators include Comcast, which announced wireless service Xfinity Mobile in April, although it said its aim isn’t to compete with the wireless carriers. “One thing we're looking at now is retention — it's key for us. It will be designed to support the core cable business,” said Comcast CEO Dave Watson at the time.
Legere still visits his contact centers. “I listen to calls every week. I visit stores. And I have this massive social media that I do. So as I'm sitting there, I've got all this data (on customers), but if what I'm seeing doesn't match the data, what I'm hearing rules the day,” he told “The Brave Ones.”
He relies on social media for feedback to the extent that he’s on it all the time. “I probably do six to seven hours a day just on social,” he said.
“The benefit I have with social? There is no way that my peer CEOs are going to do this. There's absolutely no way. I sit at the restaurant, at the bar with my phone down, typing away. I lay in bed at night for two hours, an hour, and I wake up, and I'm hitting keys.
“There's no way these country club-running guys (his competitors) are going to do it. Not to mention what comes in ... But it's a competitive advantage and I think it's worth billions. Billions.”
CNBC’s “Mad Money” host Jim Cramer calls him “a heroic figure in a landscape filled with people who are just part of a bland army,” while T-Mobile Executive Vice President of corporate services Dave Carey told “The Brave Ones”: “He can be charming on one hand and a raucous Las Vegas night club act on the other.”
Legere even has his own cooking show broadcast Sundays via Facebook Live, where he makes dishes in a slow-cooker, claiming more than 1 million viewers and featuring Legere-branded aprons, hats and pots. He counts rapper Snoop Dogg and Martha Stewart among his followers. The pair — who have their own show “Martha & Snoop’s Potluck Dinner Party” — have asked Legere to appear with them.
Legere is unafraid to sort out customers' queries himself. Among the comments on one of his Facebook posts (“You’ve got to be the best and the smartest CEO lol,” writes one. “Enjoying these new waves through the industry!” states another) is one from a disgruntled customer, to which he has replied with his personal email address.
Legere’s loud and proud nature also means he’s unafraid to send up competitors and calls them names in public. He told Cramer in April: “I've always told you that both dumb and dumber have been big contributors to the success of T-Mobile,” he said, referring to customers switching to his network from AT&T and Verizon.
He's also said that Sprint was "once a legitimate rival, but it's become so weak that I usually feel bad kicking it when it's down." Sprint and T-Mobile ended merger talks earlier this month.
But what do investors make of this out-there style? “I think investors care about one thing, which is making money,” according to Piecyk.
“So if the management style is part of driving greater attention and customer growth and retention, and energizing the employee base, then there is no reason investors shouldn’t be anything but pleased with the results’,” he told CNBC by phone.
He praises Legere’s visible store visits and contact with staff.
“Your visibility in understanding what the CEO was doing is very different than other companies where you have no visibility of what they are doing. You have no idea of whether they are actually visiting any of their own stores and energizing their own employee base … I think investors appreciate having the visibility into the thing that he’s doing to energize the employee base and to attract new customers, moving the overall company to profitability.”
For Legere, the future will be about market players converging (see the possible AT&T-Time Warner merger), but T-Mobile will keep on providing a "monthly subscription to the internet." And he's bullish about its prospects. "Five years from now, T-Mobile will be easily the number-one wireless player in America. No question in my mind."
Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.
Credits:
Writer: Lucy Handley
Design and code: Bryn Bache
Editors: Matt Clinch, Graham Smith
Executive Producer, The Brave Ones: Betsy Alexander
Producers, The Brave Ones: Jamie Corsi, Robin Sherman
Images: CNBC and Getty