Wharton Club of DC Alum of the Month:

LCCs Tom Faulders and the World of Wireless

Wharton Club of DC Alum of the Month:
LCCs Tom Faulders and the World of Wireless

By A. J. Schuler, Psy. D. (W 88)

When I arrived in Northern Virginia in mid-1999, wireless was all the rage. But last year, you could not watch CNBC or read the Wall Street Journal without bumping into another wireless doomsayer.

Tom Faulders (WG81) took over the helm at McLeans LCC International in 1999, and in the time since, he has steered the company through a significant turnaround to its current position of growth and prosperity.

Tom hates the rock star CEO culture promoted by the business press, but I persuaded him to meet with us at the Wharton Club of DC so he could talk about the business he loves and give the rest of us alumni a chance to learn from his experiences.

If you love the study of business, and if youd like a window into the future of the wireless industry, then this Alum of the Month feature is for you. I hope you enjoy it! Send any comments or feedback to me at AJ@SchulerSolutions.com

AJ: What are your current titles and roles at LCC?

Tom: I serve as Chairman and CEO of LCC International, a publicly traded company on the NASDAQ, so I have the usual Chairman and CEO responsibilities. However, because of the size of the corporation, and the very few layers we have in the operating company, I also act as President and Chief Operating Officer.

AJ: What did you do after graduation, before getting to this point?

Tom: Im from the Washington area. I went to high school here and did my undergraduate work at the University of Virginia. During my sixteen months at Wharton, I was probably what most of my fellow students would call a "ghost." At the time, my family still lived in Washington, so I commuted up on Mondays, and then back down on Thursdays. I always arranged my classes for Monday, Wednesday afternoon, Tuesday, Thursday morning if I could. So I remember very fondly my work group experiences at Wharton, but I didnt have a lot of social interaction at Wharton.

Telecom was really getting started in the 80s in this area, before the dot-com craze. I came here and joined a start-up partnership called Satellite Business Systems, a fledgling long-distance company that was subsequently bought by MCI. So I spent most of my formative years at MCI, leaving there in 1992. Then I took two subsequent Chief Financial Officer jobs in publicly traded companies, one with the Comsat Corporation and one with BDM International. The combination of my telecom background, my publicly traded corporate CFO experience, and my professional services experience at BDM all led to bring me a really interesting opportunity here at LCC.

AJ: Did you have to acquire more engineering expertise along the way?

Tom: I do not have any special training in engineering. Everywhere Ive gone, Ive always ended up sitting down with the engineers trying to understand what the heck's going on, and LCCs no exception. We have a number of Ph.D.s here who are gracious enough to spend time to dumb it down for me, so I can at least understand the basics and sound somewhat coherent when Im trying to make policy decisions or communicate with the Street. Its been very helpful, but a lot of it is on-the-job learning.

AJ: In your work, what do you enjoy the most?

Tom: It varies, which is good, because if it was the same thing each time, I think Id get bored. I enjoy setting the strategic direction of a company that is small, by industry standards. Were large in comparison to most of our competitors, but incredibly small compared to a few of them. We are global, so I enjoy trying to figure out where we fit within the global framework. Thats one thing that is fun.

For most people, managing people can either be a tremendous amount of fun or a tremendous source of frustration. Fortunately, I really enjoy that part of my work, too.

Another thing I really enjoy is the international nature of this company. We have 1,000 employees, and only thirty-five percent of them are American citizens. Most of our employees speak English, but not all of them. We actually have employees from 52 different nationalities in the company, which reflects the broadening of our international customer base. In 2004, sixty or so percent of our funding came from US sources, but as I look at 2005, I think were going to see sixty percent from international sources.

AJ: Thats quite a flip!

Tom: Yes, but its the nature of the business. Internationally speaking, we focus principally in Europe, the Middle East, or in Africa. We have a growing presence in China and in Latin America. Our baseline U. S. business is primarily with companies like Sprint, Nextel and Cingular.

The fourth thing I find really fascinating about the job is the way technology is always changing. Weve been working with third generation technology in Europe and other parts of the world for quite a while. Were just hearing about 3G actually coming to the fore here in the United States. I wont get into the whole discussion of who is ahead: in some ways, the U. S. is ahead, and in other ways, Europe is. It all depends on what aspects of technology and infrastructure youre looking at.

AJ: Fair enough. Do you have time for any other hobbies or special interests?

Tom: When I do get away, I like to get out on the water: sailing or boating, it doesnt matter. I have a place over on the Chesapeake Bay. When I can get away, which isnt as often as my wife would like, thats what we tend to do.

AJ: Was there any kind of defining moment that really propelled your career growth, any particular turning point?

Tom: I suppose Im not the model of what they say youre supposed to do. I know a number of my Wharton compatriots had a game plan all mapped out, almost before they got to school. But I tended to focus on the next interesting job and then to let myself figure it out. I also believed, since Im going to spend a lot of time in the office anyway, I should make whatever Im doing as much fun as possible.

I started out after graduation as an analyst, but within six months I became a second level manager. Why? Because I brought enthusiasm, a lot of focus and energy, and I didnt work within the job description. When my company was acquired by MCI, I became the treasurer of MCI, and became one of the youngest treasurers ever in that size company. Later, I took on significant sales and marketing responsibilities as well. Its tough to highlight one single turning point, but I seem to have had an approach that worked for me.

AJ: Whom do you admire?

Tom: I admire the unsung, hardworking, business execs who arent looking for publicity, who listen to their people, listen to their shareholders, and work with their boards of directors to create shareholder value. The nature of our business publication environment is to try to find heroes.

When I came to the company and performed its first turnaround, the Washington Post and other publications indicated that they wanted to do pieces on me, but it never happened. We did a piece on the company, which I thought was worthwhile, and we had pictures of people in the company doing some things, but in the end, a CEO has to remember that theyre a hired hand.

And theyre not necessarily much more brilliant or endowed or enlightened than a person in a cubicle down the hall. A good CEO may have an executive track record and have certain capabilities and visions and so on, which is great. But that doesnt necessarily mean that you should be paid 300 times more than the mail clerk or that you should get an option package that is worth more than the gross national product of some small African countries. But that seems to be what happens.

As far as my heroes go, I always thought Bill McGowan, who was not the founder, but the gentleman who really grew MCI, was a fascinating individual. He had the right mixture of business acumen, moxie, a sense of humor, and a drive that created an industry that otherwise would never have been created. Hes a fascinating individual and somebody who I think is worthy of study, though he went to that other business school up in Cambridge.

AJ: Hmm. . . I think Ive heard of one up there (smile).

Tom: There are one or two up there. . . I dont know (smile). But hes a really interesting guy who Ive used as a benchmark for my own work. Ive often thought, What would Bill do in this situation?

Theres another guy I know very well who was one of the founders of The Carlyle Group, who is incredibly smart, very talented, very insightful, but also extremely modest. He will give credit to everybody else before he takes any of his own. I find that an incredibly powerful combination for an individual of his obvious success and magnitude of achievement. Hes another person I admire.

AJ: Lets talk more about LCC and about the wireless industry. What does LCC do?

Tom: Were a professional services firm serving the wireless industry. Well help you set up your networks and infrastructure, consult with you to be sure your infrastructure is sound and of top quality, and well also act as your outsourced partner to manage and maintain your networks for you. We can provide end-to-end solutions and advice independent of any allegiance to a given vender, technology, application or spectrum.

Our calling card is getting it done right the first time. Weve seen lots of network operators work very diligently in trying to build their network or add onto their network, and through no fault of their own, other than lack of experience or lack of specific knowledge, its not done very well. We use our vast experience working with multiple clients in multiple areas in multiple technologies and multiple networks to make sure its done right the first time. We may be slightly more expensive than in-house resources, but the flip side is itll get done right, itll get done on time, or even earlier than anticipated. As a result, customers dont have so many ongoing fixed costs associated with their networks.

AJ: Where is LCC going? What do you see in the near-term, a one to two-year horizon?

Tom: Were seeing some consolidation in the US in the wireless sector. Does it also make sense to look at consolidation in the wireless infrastructure space? The short answer, I think, is "yes." Its something from a strategic point of view were reviewing.

On another note, this is about a $20 billion a year marketplace, though about two-thirds of the work is done in-house. The largest chunk of that piece is really the operation and maintenance of the networks. Im starting to see network operators, particularly in Europe, taking a hard look at outsourcing that work. Especially internationally, outsourced network development and maintenance is a growing trend.

AJ: Is there any particular marketing strategy you think has worked best for you and LCC?

Tom: We try to be the honest broker. Were not flashy. We are not pounding on the table. And were not carrying bags full of slick literature: what you see is what you get. Sometimes I think were painfully honest. We are very forthright in our approach to our clients and our marketing.

We really talk about how we can help, and so our marketing approach has been designed to develop relationships. I have a couple of CTOs who call me every month or two to ask, Hey, whats going on in the industry? Theyre so focused on the technology they are using and what their day-to-day problems are that they dont get a chance to step back and see where the industry is going. Were in a unique position to see the industry as a whole, and I think our clients really value that, and the relationship we work to build with them.

AJ: Thanks for taking the time to talk to us today, Tom.

Tom: My pleasure, and thanks to you.

A. J. Schuler, Psy. D. is an organizational development consultant and executive coach. He is the author of the forthcoming book, "Revolution: How to Transform Your Company from Within."