Businessweek Archives

The Sharp Operator At Bell Atlantic


Cover Story

THE SHARP OPERATOR AT BELL ATLANTIC

When Raymond W. Smith joined the Bell system 34 years ago as a freshly minted engineer in Pittsburgh, part of his training was to climb telephone poles. While some other aspiring managers were cool on the idea--and dropped their trainee's "hooks" as soon as they could--Smith kind of liked the view. His admirers say he hasn't stopped scaling heights at the company--or making waves in the telecommunications industry.

Since becoming chief executive of Bell Atlantic Corp. in 1989, Smith has made it one of the most aggressive of the Baby Bells. While his plan to acquire cable giant Tele-Communications Inc. is his brashest move yet, it is hardly uncharacteristic. In his zeal to push Bell Atlantic further into the digital age, the boyish-looking 56-year-old has taken on regulators and the courts to broaden the company beyond basic telephone service. "When we had lunch three or four years ago, he was already talking about the fact that we would be answering our televisions and looking at our phones," says former New Jersey Governor Thomas H. Kean, a Bell Atlantic board member.

The proposed merger with TCI would provide a giant step toward making that vision come true. But if Smith feels any vertigo about becoming CEO of a colossus with combined annual sales of $17 billion, he's not letting on. Gushing about the deal on Oct. 13, he said the merged company would be "the first truly nationwide provider of wire and wireless service, video-on-demand, and interactive media, all rolled into one." It would "make the electronic superhighway we've been talking about for a while a reality." And it would "transform the way we work, play, and learn."

SONG-AND-DANCE MAN. It would also forever alter the sluggish business of being a Baby Bell--something Smith has been trying to do for half a decade. Faced with slow-growth local phone service, Smith has been eyeing cable TV and other alternative technologies since winning the corner office. Along the way, he has blasted through court rulings and legislation that limits the Baby Bells' ability to expand.

In 1991, Smith successfully challenged legal restrictions barring the phone company from providing information services such as electronic yellow pages. And this year, he won another court fight for the right to provide TV programming in Virginia. With plans to build fiber-optic systems for cable operators in New Jersey, Bell Atlantic is far and away the leader among the Baby Bells in their push toward cable.

Smith's high energy isn't limited to the office. An avid reader, he has become something of an expert on the French Revolution. He likes to dabble in oil painting. A theater buff who has sung and danced in local productions, he now writes and directs plays near his home in Swarthmore, Pa.

He also uses his stage talents at work, sometimes singing at company meetings or coining terms to help his marketers sell the product. One contribution: "The Intelligent Network," a phrase describing Bell Atlantic's computerized system of phone, video, and data. "Ray is able to take complex phenomena and provide a simple image to help other people imagine what he's talking about," says Harvard business school Professor Rosabeth Moss Kanter, who profiled Smith in a 1991 Harvard Business Review article called "Championing Change."

DOUBLE VISION. Smith has made change a byword at Bell Atlantic. Managers are encouraged to take big risks, and Smith makes it clear he will back them. One of the biggest examples was the 1990 acquisition of New Zealand's phone company, a move that cost Bell Atlantic $1.2 billion. Many at the top of his company thought the plan was too risky. "At times, I felt like Ray was the only vote I had on my side," recalls then-international chief C. Hyde Tucker, now a corporate vice-president. The move paid off. Bell Atlantic and a partner bought the offshore system, then sold off half in a stock offering. Since then, with Bell Atlantic's help, the outfit's stock price has tripled.

Friends give Smith high marks for diplomacy, too. And he'll need it to deal with TCI's notoriously tough-minded John C. Malone. Smith would become chairman and CEO of the merged company, while Malone takes the vice-chairman slot. Malone makes it clear that Smith would be in charge, saying: "We couldn't have a better CEO than Ray." But Malone and TCI Chairman Robert Magness together will own a 4% stake in the combined company, and Malone isn't likely to sit idle. "I intend to be involved in terms of advising Ray and the board, and helping out wherever I can in terms of this vision thing." For the new company to work, Malone and Smith need to keep their vision things

in sync.RAYMOND W. SMITH

AGE 56 BORN Pittsburgh

EDUCATION Carnegie Mellon, BS in industrial engineering.

University of Pittsburgh, MBA.

RESUME A Bell system lifer, he started there 34 years ago and rose through the

finance ranks. Named CEO in 1989.

STRATEGY Engineered a bureaucracy-busting downsizing, then pushed overseas with

investment in New Zealand and Mexico. Now plunging into cable. Sees eventual

integration of cable and phone service.

PERSONAL Directs local community theater productions.

DATA: BUSINESS WEEK

DAVID FIELDS/ONYX

Joseph Weber in Philadelphia


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus