Dan Schulman: I think most people say that they want to put the customer front and center but it's not easy to go and do that. The initiative we have inside the company is entitled every customer has a name. It means we treat you as a person not as an account not as a line almost like you know if one of my family members had a problem how would I want the company uh to treat them? And so there are tons of small things that basically assure that we're putting a customer front and center. And my view is that customers fire companies all the time in quiet ways because they feel disrespected.

Adi Ignatius: So Dan, thanks for sitting down with HBR.

Dan Schulman: That's a pleasure, Audi.

Adi Ignatius: All right, so I want to ask you, you're at Verizon. You turned down the job, as I understand it, twice, maybe more than twice, before you agreed to take it. What made you want to get back in the game?

Dan Schulman: Well, I turned it down because I was very happily retired. I was living on our ranch in Montana with my beautiful wife, who I love very much.

Adi Ignatius: Yeah. Notice the cowboy boots.

Dan Schulman: Yeah. Yep. Always with me. I wasn't looking to come back into corporate life. But, you know, I was on the board. As a lead director, we needed to make a change. I felt a keen sense of loyalty to the company and I felt like the company had a tremendous amount of assets that we could leverage and that there was a real opportunity to take a iconic American company and you know at least have the shot at turning it around. And so, you know, after a lot of discussions with my wife, I agreed reluctantly to go do it. But here I am, 9 months into the job and I'm loving it.

Adi Ignatius: But what was wrong? Like what at a high level, what was wrong with the company?

Dan Schulman: You know, we had been losing market share for 5 years. We went from having the largest market cap in the industry to having the lowest. We had the lowest PE multiple which you know is the market's way of saying that they don't really believe in your growth going forward. Our churn rates were the highest, and we were at the bottom of the pile in our customer service metrics. And so this was a company that was losing its edge.

And I think the reason was is that we rested on our laurels a bit. Very understandable because we were the dominant player for 15 years. And as the competition caught up, we didn't differentiate enough on a technology front. We lost our edge in customer satisfaction. And I think in some ways the industry as a whole became more and more transactional, more and more complicated in the way they engaged and interacted with consumers. And that tends to lead to a feeling of being nickel and dimed as a consumer.

And my view is you've got to take a look at the company and you've got to refocus on the things that matter most. And those are customer centricity, operational excellence, innovation, and culture. And we are very focused on getting back to those basics.

Adi Ignatius: So, you know, companies talk all the time about wanting to be customer obsessed. For Verizon in particular, which, you know, probably a lot of customers view as a utility. They just want it to work. You know, they're not sure they want a relationship with you, but they want it to work. What does customer obsession look like in telecoms?

Dan Schulman: Well, first of all, you have to have the best network in the business. You've got to continue to invest in that network and make sure that you differentiate on technology. Whether that be through mobile edge computing, through C-band deployment, the reliability of our network—that's table stakes.

But beyond that, as I mentioned, we have this initiative called every customer has a name. It means we treat you as a person, not as an account, not as a line, almost like if one of my family members had a problem, how would I want the company to treat them? And so there are tons of small things that basically assure that we're putting the customer front and center.

For instance, if you call into our customer care, we got rid of all hold music. We provide you with news updates of your local state, your local community, or you can listen to silence, because nobody wants to listen to that annoying music over and over again. When you speak to a representative, we got rid of scripts. We empower our representatives to make the right decision for the customer on the spot, to treat them like a member of their own family.

We are simplifying our plans. We are taking away all the hidden fees and the gotchas and making it extremely clear and transparent. My view is that customers fire companies all the time in quiet ways because they feel disrespected. And when you make things complicated and nickel and dime people, they feel disrespected. So for us, customer centricity means transparency, honesty, simplicity, and great service.

Adi Ignatius: Are you essentially accepting lower revenue temporarily to kind of build longer term loyalty? Is that what that means with simplified plans that give people only what they want and need?

Dan Schulman: No, I don't think that being customer centric means being less than fiscally responsible. In fact, I think they go hand in hand. When you take complexity out of the system, you take cost out of the system. Complex plans generate customer care calls, and customer care calls are very expensive. When the bill is simple and transparent, calls go down, customer satisfaction goes up, and churn goes down. And reducing churn is the single most powerful lever in our business for long-term shareholder value creation.

So it's not a trade-off between profitability and customer satisfaction. When you do the right thing for the customer and build trust, they stay with you longer, they buy more products and services from you, and your cost to serve goes down. It's a virtuous cycle.

Adi Ignatius: So it's never easy to come in. And I mean, you were on the board, but you know, essentially came in as an outsider. And even though you've had a great track record at PayPal and elsewhere, people were resistant to change, right? So it's never you just come in and say, "We're going to do this" and everybody says, "Hooray." Talk about the bumps along the way to get the team, the staff, the company excited in these ideas or willing to explore these ideas.

Dan Schulman: Yeah. Well, first of all, you're exactly right. People are resistant to change. You know, it's ironic that the one constant in our universe is change, right? And change is happening at an accelerating rate right now. But for whatever reason, humans hate change. You know, people who win the lottery, after the initial shock, they get stressed because their whole routine is broken.

So when I came in, the first thing I did was hold all-hands town halls. No slides, no teleprompter, no prepared corporate scripts. I had a cup of coffee in my hand and I basically just talked from the heart.

Adi Ignatius: I want to come to those meetings.

Dan Schulman: Yeah, they're good. They're good. I have a cup of coffee in my hand and I basically just talk from the heart like just like this is what I see. And you know, I said, "Look, I know we have a lot to be proud of as a company, but the fact of the matter is we are losing. We have been losing market share for five years. We have the lowest market cap, the highest churn, the lowest customer service scores. And if we continue doing what we've been doing for the last five years, we're not going to survive as a leader."

I told them we have to confront the brutal facts. We have to stop pretending, stop the internal politics, and we have to play to win, not play not to lose. And I promised them that I would be completely transparent and honest with them, good or bad, and that I would listen to them. Because the people on the front lines know what's broken far better than the executives in the corner offices.

And when people see that you're authentic, that you're not sugarcoating reality, and that you have a plan to win, the fear starts to turn into excitement and engagement.

Adi Ignatius: So what are they like? Like what are your employees thinking about?

Dan Schulman: Yeah, I think what they are really motivated about right now is that we are playing to win, you know, that we are trying to be a trusted company and that they see that we can do that. Early successes are really important.

When employees see customer wait times dropping, when they see churn beginning to tick down, when they see positive reaction in the market to our new offerings, they start to believe. And we are empowering our front-line people to solve problems without bureaucratic red tape. People feel that energy. The shift from a defensive crouch to an offensive posture changes the entire culture.

Adi Ignatius: You talked about trying to be a truth teller and you've developed a reputation, maybe cultivated a reputation about being a truth teller about AI. What is the truth about AI in business?

Dan Schulman: Truth is a subjective thing. Often it's your set of circumstances, how you see things, and I may see them differently. So I don't think there's any absolutes in that, especially when you're thinking about the future, because the future is an uncertain place. What I do try to be is as authentic and honest as I can be about how I see the future playing out.

What I've said is that AI is going to be a part of our future and that every single one of us needs to know how to use the tools of our time. And you will be better at your job, you will be better in life if you understand how to use and capture the benefits of AI.

So, we've put in place gigantic training programs, full week-long training programs on using AI for all employees. I've also put into place extensive reskilling programs for employees who might be affected by AI going forward, in other words, displaced by AI. I want to make sure that they have all of the tool sets and access to be successful in whatever their next chapter might be.

But I don't think we should underestimate the impact of AI. And I want to be as honest about that as I possibly can. I don't know what the future is going to hold. I think we all need to be quite humble about that because things are changing so quickly. But I do know that technology and successive waves of technology, whether it be AI, then quantum, then robotics, are going to radically change the way we work and the way we live. And I want to have that conversation as transparently and as honestly as I possibly can.

Adi Ignatius: Obviously, we don't know the future, but what are some of the early use cases that tell you, yeah, we could accelerate here, here, here, and be a very different company?

Dan Schulman: Well, first of all, I think the value that we offer to consumers is going to be radically reshaped by AI. I don't think we'll just be a connectivity company going forward offering wireless and broadband. I think we will be an integral part of how consumers use AI.

I think we can put an AI fabric over our network. I think we can do things that enable consumers and small businesses to take full advantage of AI in their lives. That could be things like token packages where people buy tokens from us, and we're an orchestration layer on top of the network where we cost optimize the use of those tokens for you. Because as a consumer, there are certain LLMs that are good for certain jobs, but they may cost more, and there's certain jobs where you can go to a different LLM that costs less. But you as a consumer may not know that, but we as a network will know that. And so we could cost optimize the use of tokens. And I think that tokens are going to be the coin of the realm going forward.

We could offer a safe place in our network—because we have 95 million people in the country that use us—where if you want to utilize an agent, you can utilize it in the context of our network, not get a Mac mini on the side to hook up to, and we could provide that secure environment for that.

So I think what we offer going forward could be very different than what we offer today. On top of the connectivity, we'll also be a part of the AI infrastructure in the country. We'll connect these data centers through dark fiber and lit fiber. We have the capability, by retrofitting all of our central offices into edge computing data centers, to take inference out to the edge for applications that need low latency like remote surgery or autonomous driving vehicles.

It's a radically different value proposition that adds much more richness to the depth of the relationship that we have with consumers and businesses. And so I think AI will enable us to be way more productive. We'll get more things done, but also really importantly increase our customer satisfaction levels dramatically.

Adi Ignatius: So what's the plausible sort of darker scenario? I mean, tech CEOs all the time are saying things that alarm us about, you know, we have 500 days until something bad sounds like it's coming. And obviously job losses are a certainty, whether net job losses are I don't know. But what's the plausible dark side, and how do you think about that? How do you lead with that?

Dan Schulman: If you think about the speed that AI is developing, there are going to be all sorts of considerations to think about. Three years ago when these models first came out, they were great, but they couldn't even do math, right? They couldn't really multiply. The models that we're using today are the worst models that we will ever use. OpenAI is going to put out four iterations of their model between now and the end of the year. Every one of them will be substantially better. We are on the cusp of what's called recursive self-learning for these models, which basically means that the models will write themselves without human intervention. We're probably 6 to 12 months from that.

You've got quantum coming. We're preparing for quantum. And the way that I think about quantum is everything times 1,000. It is another step function change. And then several years later, you've got humanoid robotics behind that.

So obviously there are a lot of things that are going to change in our world. I think there is no question in my mind that there is going to be disruption. We don't know exactly what that's going to look like because it's the future. But the way that I think about things is scenario planning: let's scenario plan what could happen. As I look function by function, I can see disruption in various functions. The question really is, how do we get ready for that? How do we provide the right reskilling, the right training?

When I did this initial restructuring, we put in place a $20 million fund—we're the first company to go and do that for AI reskilling and training. I actually don't think that's enough going forward. I think we are going to double or maybe triple that amount over the next one to two years to make sure that not only are all employees inside Verizon prepared for whatever future plays out, but also the communities that we serve. We'll go into various cities, various small businesses that may not be experts at how to use agentic forms of AI going forward, and help them with that.

Because I think as leaders we have a responsibility to go and do that. If there's going to be a two to five year trough where there's potentially more unemployment, that's not good for our economy, that's not good for our country, that's not good for any of our companies. And so all of us who have positions of responsibility need to step up. We can do our part and will do our part, but I do think there's going to be disruption and we need to be ready for that.

Adi Ignatius: So I want to talk about leadership sort of at a high altitude. You know, you weren't looking for a CEO role. You took it. There must be some wisdom accumulated over the years. You come into a CEO role; it's different from your first many years ago. What did you learn in terms of, you know, CEO needs to do this, does not need to do this? What was the wisdom that you accumulated?

Dan Schulman: You're right. There's no substitute for a lot of years of experience because you go through a lot. You go through ups and downs. What I tell people here, I think for a leader is: one, you need to be humble. And what I mean by humble is you don't know it all. Like that is 100% an accurate statement. And if you do think you're the smartest person in the room, you're just in the wrong room. There's too much going on, it's just changing so rapidly. We need to be learning all the time. And that means that things that we thought were certain before are probably no longer certain. You need to challenge yourself continually.

I have this saying that I never want to stand still because when you do, you start falling way behind.

I also think being authentic is like a superpower. I never want to talk in corporate speak. I just want to be me because it's the easiest thing that I can be. And people see that, it's approachable. They know that they can talk to me about anything. They know I'm going to be as truthful as I can be about where we're going. And I'm also very honest to say like I don't know what that future is going to be. And I think people really respect that.

I think leaders need to be very different than they used to be in a time of tremendous change. I think we need to inspire and I think we need to admit when we're wrong and course correct.

Adi Ignatius: So that can't be enough though to be humble. I mean, there are a lot of humble, authentic people out there.

Dan Schulman: Not that many,

Adi Ignatius: Well, okay. I agree those are great attributes, but the ability to inspire, I get, but there's got to be more than just "what you see is what you get." There have to be other kind of skills, attributes, approaches that are key to doing this job successfully.

Dan Schulman: Well, there are the basics. You've got to be able to work at a very intense level. You have to have extremely high expectations and insist upon them. You need to be able to make very difficult decisions and stand up to them. People need to know that you're going to lead, you're going to be uncompromising in that, and that you have an expectation that you're going to win in the market.

And I think, you know, I'm a fighter. But I mean like a real fighter—like I've done mixed martial arts for like 40 years.

Adi Ignatius: Thank you for the warning.

Dan Schulman: Yeah. You're welcome. And I've learned a ton from that. Be very cool, calm, collected in very high stress situations. I feel like as a leader, you can never be too up or too down either, because good things are going to happen, but they're going to be followed by difficult things and that's also okay. You'll learn from those.

I think those are the basics of leadership. And then I do think those traits on top of those are really important: being humble, being authentic, not talking from notes, and being willing to say the same thing that you say internally, publicly. It's great because you don't really have to think that much to keep your story straight.

Adi Ignatius: Exactly. What did I say over here or what did I say over here—it's very consistent.

Adi Ignatius: So for Verizon, this is a turnaround, you've used that term. When does it end?

Dan Schulman: You'd expect me to say this: probably never. But in my view, there's kind of a three-year plan that we're under right now:

The first year is about admitting the issues that we have, confronting them head-on, and putting into place a fully comprehensive transformation program. We have like 10 work streams. We have like 400 initiatives in them. Everyone in the company is engaged in those. I meet every single week on those. I spend hours on every single one of the 10 work streams. We have the leaders of the company involved in all of them.

Year two is institutionalizing that: seeing the results, course correcting, and solidifying.

And then year three, we turn into an AI-native company where we are part of the AI infrastructure and we've transformed who we are as a company.

Adi Ignatius: So I guess another way of saying it: what would have to be true for people to say Dan Schulman fundamentally changed Verizon?

Dan Schulman: Well, I think you'll see it in all of our metrics. You'll see it in our customer satisfaction results. You'll see it in our churn rate. You'll see it in our employee satisfaction results. You'll see it that we are truly AI native.

To become AI native, the technology is going to be there. There's no question about it. I think in two years time we're approaching AGI if not at AGI. Two or three years we're at quantum, by 2030 at the latest you're there. So the technology will be there. I think the most successful companies will have figured out culturally how to adapt to that.

I think that is probably the biggest challenge for any company because people can be scared of all of the change. They can be scared of like what could AI do to my job. And so the issue that we will all face is how do we adopt it?

And again, when our network teams see what we can do in terms of improving the network by running these things autonomously, when we look at our cyber security and we see how much better we can be than we've been in the past—and by the way, I think we've been amazing in the past, but we're living in the time of AI and it's not good enough for how we've been—I think people can get really excited about that.

There's a lot to be very excited about on the AI front. People talk about disruption: there is going to be disruption, but we've had a lot of disruption in our lives. Humans are amazingly adept at moving through it. People bounce back from tragedy in their life.

And I feel like the utilization of AI, how AI native we are as a company, how we've been able to adapt it and what that's done for all of the constituencies that I serve will be the legacy that I hope to leave.

Adi Ignatius: Dan, this is a great conversation. Thank you.

Dan Schulman: Yeah, thank you so much. I appreciate it.