Inside an outsider's fall
How CEO Guy Laurence fought the Rogers family and lost
Stately Langdon Hall, all red brick and white columns nestled in a verdant field near Cambridge, Ontario, is a world away from the buzzing, connected towers of the Rogers Communications campus in downtown Toronto. Yet it was here, just last August, that CEO Guy Laurence finally lost his grip on the company.
He was at the elegant resort for an annual ritual, a strategy meeting where Rogers senior executives and board members escape the concrete and gridlock of the city to set the direction for the wireless and cable company. The surrounding trails and grounds, lush green by the steamy tail end of summer, provided a serene backdrop for the meeting. Inside, however, things were starting to get a little tense.
The Rogers board members—including Loretta Rogers, wife of the late founder, Ted, and two of her children, Edward and Martha—sat on comfortable chairs in a ballroom that doubled as a spacious meeting place for the corporate huddle. The room was lined with large windows, and sunlight dappled the white-painted, wood-panelled walls as company executives filtered in and out to update the board on major initiatives.
One of the largest was Eclipse, the Internet-based television project Rogers had been working on for half a decade. Canada's largest cable company had spent about half a billion dollars building an interactive platform that would replace the clunky guide and operating system found on its legacy NextBox set-top terminals. The project would involve reworking the company's cable infrastructure to give Rogers customers a new way to consume content—one that made it easy to switch among TV, video-on-demand and streaming video services like Netflix. Subscribers would be able to access its app-like interface from any device, anywhere and any time, and the service would get to know their preferences and offer intuitive and predictive search functions.
The problem was that it still wasn't ready, and Rogers was falling ever further behind Bell, which had launched its own Internet protocol television (IPTV) product years earlier. The project was taking so long because, unlike most cable companies, Rogers had decided to build the new platform itself, from scratch, cobbling together commercially available technologies and software to create a custom platform no one else could offer.
The Rogers directors settled into rows of chairs neatly lined up to face two big screens on which Eric Bruno, senior vice-president of product management, would demonstrate the project. Edward Rogers, now 47—with his dark hair and large frame, and his father's thin-lipped smile—was seated up front. His mother, Loretta, 78, her silvery blond hair swept into its signature updo, sat nearby, as did Martha, 45, Edward's youngest sister, who sits on the board but generally stays out of the company's day-to-day business. Melinda Rogers, 46, slim and sharp-featured with Ted's blue eyes, was not present in person, but took part through a video link. A few of Ted's key lieutenants from way back were also on hand, including white-haired vice-chairman of the board Phil Lind, now 73, and Alan Horn, the 65-year-old former CFO, who now chairs the board.
Laurence watched from the back, seated behind the Rogers family members and most of the directors. He had been hands-on in the development of Eclipse since taking over as CEO of Rogers in December, 2013. Some would say too hands-on—he had a tendency to weigh in on the smallest of details. But when it launched, he swore it would turn around the company's flagging cable TV business.
Edward wasn't so sure. As head of the Rogers Control Trust, which owns 91% of the company's voting shares, he had no official operating role in the company, but he still wielded undeniable influence. And he didn't think Eclipse was such a smart idea. Most other cable companies were going a different direction. Shaw Communications Inc., for example, had decided to license technology from Comcast Corp., the U.S. cable behemoth where Edward spent a few formative years cutting his teeth in the business.
Edward watched the presentation in studied silence. Later, he pressed the CEO on the possibility of working with Comcast. But Laurence wasn't interested. He was convinced that he was on the right path, and he planned to keep going. Even if the company did turn to an outside technology provider like Comcast down the road, Eclipse was going to launch.
Laurence was wrong. Eclipse never did launch. And although he didn't know it at the time, by the end of that meeting, his days as the first outsider CEO to control the company founded by Edward's father were numbered.
There are many theories about why Guy Laurence, the third CEO Rogers has ever had—and the first with no experience within the company—was unceremoniously dumped by the board on Oct. 16 of last year.
Some say his management style was too brash. The 55-year-old British im-port from Manchester, who had run Vodafone's U.K. and Amsterdam wireless businesses, was known for being outspoken, calling out competitors and government authorities. His combative style was refreshing to some, but others said it was a bad fit for the insular Canadian industry, which is quite unlike the rough-and-tumble markets in the United States and Europe.
Others say he was fired because he didn't deliver on his promises. It's true that he dreamed big and promised a lot. He said he would drive a return to growth at Rogers, make customers a priority, unravel the thousands of business processes that had congealed like "cold spaghetti" over the years, use media content to boost sales, and close the gap with Bell and Telus, which were pulling ahead of the company on wireless. After only 34 months as CEO, he seemed to be making real progress on several of these fronts. But he set the bar high, and change was taking longer than expected.
Still others say he was let go simply because someone better came along: Joe Natale, who quit as CEO of Telus Corp. in August, 2015, and joined Rogers in April. He hadn't been available when Laurence was hired, but then suddenly he was. Natale—who was a driving force behind Telus's successful customers-first ethos—is a lot of things Laurence is not: reassuringly Canadian, smart but not domineering, intimately familiar with the domestic competition and rules of play and, perhaps most importantly, willing to play nice with others, even when he's ostensibly the guy in charge.
All of those factors played a part. But the main reason Laurence lost his job may have come from within: Blinded by an oversized ego, he had a pattern of underestimating his opponents. He was no fool—he knew that Rogers was still a family-owned company at heart, and that the family was still very much in charge. He knew that Ted Rogers not only founded the company but still loomed over it, larger than life, even after his death in 2008. But Laurence seemed to ignore all that and treat Rogers as a regular public company. One where he, as CEO, was allowed to make decisions without constantly checking with Edward and Melinda and the creaking friends-of-Ted who still littered the upper ranks.
During conversations with about 20 current and former Rogers employees and individuals close to the company, a vivid picture emerged of the divisive former CEO's tenure at a telecommunications giant still struggling to define itself after the death of Ted Rogers (almost all of our sources agreed to speak only on the condition that they not be identified). Laurence was not successful in everything he tried to do, but several of the insiders we talked to believe that, in the end, he lost his job not because he failed to deliver, but because he blithely ignored the advice just about anyone at the company will give you for free: Never forget whose name is on the building.
Even from an early age, Ted Rogers was driven in a way that most other men aren't. He was intently focused on building his corporation and his legacy, he repeatedly said, because he saw his own father's ripped apart. Edward Samuel Rogers, Ted's dad, invented the batteryless radio and launched one of Canada's early radio stations, CFRB. But tragedy struck when Ted was just five years old—his father suddenly died of an aneurysm at age 38—and everything he'd built was quickly sold or shut down.
In his authorized biography, Relentless: The True Story of the Man Behind Rogers Communications, Ted recounted that he felt his family had been "screwed." He said that early on, he made it his life's mission to finish what his dad had started. And indeed Ted initially followed his late father's footsteps into radio, buying his first radio station—Toronto's CHFI—in 1960.
Nine years later, when family friend Phil Lind joined the company, it was little more than a radio station and a cable licence. Lind played an important role in taking it to the next level, proving to be a skilled hand at dealing with the ascendant broadcast regulator. The business grew quickly. By 1979, amid a series of acquisitions, Ted took his company public.
Rogers continued to grow, with Lind leading an expansionary charge into the U.S. in the early 1980s. Ted took big risks, borrowing massive amounts of money to fund his ambitions, buoyed along by his remarkable bargaining skills. He invested more than $1 billion in Cantel, making Rogers an early leader in wireless, and he acquired Maclean Hunter in 1994, which formed the bedrock of Rogers Media. He even set up a deal with Birks where he exchanged CHFI radio advertising inventory to help pay for part of an almost-three-carat engagement ring for his beloved fiancée, Loretta. And he delighted in a story about the time he and Lind had bags of cash—$1 million (U.S.) in small bills—wheeled into a 1982 business meeting with the owner of the San Antonio Spurs, paying off a debt and persuading the Texas businessman to renegotiate an onerous contract in their favour.
Meanwhile, he was also building a family. After he and Loretta got married in 1963, the couple raised four children, three girls and a boy. Of those, his son, Edward, was the one who followed his father's path into business most closely. Ted used his U.S. cable contacts to convince the Roberts family, which founded Comcast Corp., to set his son up with "every lousy job" they could find for him. After his stint at Comcast, Edward returned to Toronto in 1996 and began taking on management roles at his dad's company, running the cable division from 2003 to 2009. He lacked his father's charisma, but he overcame a stutter, developed more confidence and at one point admitted he wanted a shot at running the company.
Nevertheless, in 2005, Ted bypassed his son and picked Nadir Mohamed, a clever wireless executive he recruited from Telus in 2000, to head up a new division combining the cable and wireless businesses. It gave Ted the chief operating officer he never had, and paved the way for Mohamed's ultimate ascension to CEO.
Melinda Rogers, the second-eldest of Ted's three daughters, also joined the family business but took a different route, preferring to seek out innovative new opportunities over running the existing operations. Known for her keen intellect, Melinda assumed roles at Rogers involving venture investments and strategy. (The other sisters, Lisa and Martha, have largely stayed out of the family company, though Martha is on the board.)
As he built his empire, Ted was careful to keep his family firmly in power, using a then-unusual dual-class structure and vesting his family's control in Class A shares with all the voting rights. Weak from a young age and wary of his own health, he had an acute awareness of his own mortality. He would live a full life—thanks in part to frequent trips to the Mayo Clinic—but began planning for his own succession in his 30s, plotting out who would manage his business empire and how he would ensure his family's legacy. Shortly before he died of congestive heart failure at 75 in 2008, he explained his succession strategy to the author of High Wire Act, a book about his life: "You can't rule from the grave, but you can try."
When Ted died, Mohamed—who had successfully grown Rogers's wireless operation into the largest and most successful in the country—was appointed CEO. But by the time he took over, the runaway growth train was slowing. Bell was moving into the television market with IPTV, which allowed it to offer a non-satellite option in urban areas where it had invested in fibre optic cable for high-speed Internet service. On the wireless front, Rogers was starting to face increased competition from Bell and Telus, which had recently completed a shared network and started to offer the iPhone, previously a Rogers exclusive.
After a somewhat lacklustre five years, in February, 2013, Mohamed suddenly announced he was leaving. There were rumours he felt constrained by the weight of the family's interference. Before he'd taken the job, he had negotiated a clause in his employment contract that gave him the right to resign and receive "certain payments" if he disagreed with the board of directors on "fundamental and material changes he wishes to make with respect to the business." He has not confirmed that he triggered that clause, but the year he left the company, he received a retirement package worth more than $17 million.
When Guy Laurence was hired in 2013, he crashed into the company like a battering ram. Balding and pasty, like a British Tony Soprano, he had an un-canny ability to look at once dishevelled and commanding in a suit. During his first few months on the job, he liked to tell the tale of how he practically demanded the CEO position from the board, pounding on the table during one interview and forcefully proclaiming: "I want this job."
One of his first interactions with a large group of senior leaders included a vaguely menacing threat. Rogers had just reported its fourth-quarter 2013 financial results and its shares were down 5%. One former executive remembers Laurence suggesting that everyone in the room would take a 5% pay cut the following quarter. He then told the quiet crowd he was only joking—for now.
That lecture was typical of his sometimes intimidating style, but he had two personalities, and on the other side he deployed his substantial charm to win the affection and loyalty of the rank and file. Tall and confident, with an engaging smile and a dry wit, he prepared carefully for public appearances but came across as natural, drawing people in and making them feel like the centre of his world.
Outside the company, Laurence also made a strong impression. When he joined Rogers, the Canadian wireless industry had just been through a bruising fight with the federal government, which ran public campaigns decrying Canada's high wireless fees, while pledging to help create a fourth major carrier to increase competition. As the battle wound down, industry types felt conciliation was the best move. But while leaders from Bell and Telus spoke of building relationships and working within whatever market structure Ottawa saw fit to promote, internally, Laurence spoke of tackling the government head-on. He painted the Harper administration as an enemy that should be attacked, rather than a partner to be reasoned with behind closed doors.
He initially took the same approach with his competitors. At town halls, he spoke of them as adversaries to be overcome, plotting out how Rogers was faring against them on key indicators like customer turnover, and chiding managers when the company wasn't meeting his expectations. He had the audacity to call Bell and Telus out by name on conference calls and in public comments, something his Canadian peers were always careful to avoid. He sniped at Telus for poor network management and critiqued Bell's bureaucracy. He famously called Bell a "crybaby" for complaining to the federal regulator over Rogers's use of its NHL broadcast rights—a poke in the eye he may soon have regretted. Shortly after, Bell swooped in to acquire mobile phone distributor Glentel, which—under brands like WirelessWave and Tbooth Wireless—sells both Rogers and Bell products and services. Rogers couldn't risk losing its placement in Glentel's stores, and was forced into a deal where it had to vastly overpay for its 50% share, putting $473 million in cash toward the $594-million purchase price.
Laurence had a bit of a showbiz history, having put in stints at music publishing company Chrysalis and MGM Studios in Los Angeles, and he loved to be in the public eye. He courted the media through regular press events, winning Rogers coverage for almost every initiative he introduced, an irritation for its competitors with similar news to promote but more publicity-averse CEOs.
But sometimes he went too far. When reporters arrived for the launch of a new "Roam Like Home" initiative that drastically cut international roaming rates for Rogers's most loyal subscribers, they found an exuberant, bare-legged Laurence dressed for the tropical-themed event in dark loafers, khaki shorts, and a loud striped shirt with a Remembrance Day poppy pinned to it. When some senior executives at Rogers saw the spectacle, they cringed. It was just a week after a similarly embarrassing show when he threw on a shiny black leather motorcycle jacket to announce Rogers's $100-million partnership with Vice Media.
When it came to internal communications, he was just as colourful. He launched a blog for employees that contained the kind of details Canadian CEOs just don't share with the front line: He wrote about buying his multimillion-dollar mansion in Rosedale and having his Mercedes shipped from overseas. He staged a massive corporate spectacle for thousands of employees at Toronto's cavernous Air Canada Centre, treating them to a rock-star-style town hall with thundering music, flashing lights and special guests. The audience cheered wildly, but some senior executives saw the event as a chest-thumping exercise in showmanship—at these events, it was all about Guy.
Junior employees seemed to enjoy the access, commenting on his blog that they felt invigorated, excited to take on the challenges he outlined. But some in the more senior ranks, especially those close to the Rogers family, felt things were getting out of hand. One executive in particular, when asked whether she thought Laurence communicated well, winced, then curtly replied: "Perhaps a bit too well."
After Laurence got to know the company better through a months-long "listening tour," he became more blunt in his assessment of its defects in conversations with executives. Rogers was a great company, he said repeatedly, but it had lost its way and was being mismanaged.
He warned head-office employees it was time to put their heads down, that they wouldn't be ducking out early on summer weekends to spend time at their "precious cottages." And after in-troducing his strategic plan, Laurence began hacking away at Rogers's management structure, saying the company had a problem with the "concentration of power." He cut 15% of management, reducing the layers between the most junior employee and the CEO to seven, later marvelling that previously the company had more layers of managers "than the Catholic Church."
The cuts, which were enacted in just a few months, were tough on employees. They also created a problem for Laurence. Over many years at the company, Phil Lind and Edward Rogers had developed friendships with many of the long-serving managers, and the two board members were known to step in on behalf of favoured employees, undermining Laurence's authority. Lind was set to retire from his operational role as vice-president of regulatory affairs at the end of 2014 (though he would stay on as adviser for a further three years). Tension bubbled up when Laurence hired Lind's replacement, bringing in ex-Googler Jacob Glick as chief corporate affairs officer instead of promoting one of Lind's favourites—such as senior vice-president of regulatory Ken Engelhart—from within the company.
"Edward and Phil both kind of work that way. They have their retainers, their faithful, and they are protected whether or not that's in the interests of the company," says one long-time Rogers executive. "So Guy had two big, board-based enemies, right off the top. And that's an issue."
Laurence made other high-profile hires from outside Rogers too, replacing wireless and cable head Rob Bruce with Deutsche Telekom executive Dirk Woessner, who would head up the new consumer division, which en-compassed all retail customer business. Cisco Canada head Nitin Kawale would lead the enterprise division; another former Google executive, Deepak Khandelwal, was charged with improving customer service; and Laurence's old colleague from his Vodafone days, Frank Boulben, signed on as chief strategy officer.
The new CEO also shook up the old guard with "sharespace," a massive undertaking to drag the company's corporate office design from 1970s-style cubicle maze to open-concept modern workplace. The project, which launched in 2015, followed Laurence's blueprint from his Vodafone days. Before he arrived in Toronto, many Rogers employees watched a YouTube video of Laurence discussing the Vodafone overhaul. His best-known line from the clip became a bit of a corporate meme: "We take anything that's left on the desk at the end of the day and we incinerate it. Even if it's pictures of your loved ones."
Having done this before, Laurence knew what he was up against: a "concrete block of middle managers." Those who would resist were the same types he was trying to purge in his management restructuring. "The ones that spent 10 years trying to get that corner office. They fight it like hell," he said in the 2012 Vodafone clip, foreshadowing the same issues that would plague him at Rogers. "And the only way to get through that is to smash—destroy their offices so they have no choice."
The office overhaul was "designed to attack bastions of entitlement and break down the hierarchical structure" of the company, says one Rogers insider. "There are a lot of entrenched powers…and none of them were into the sharespace thing."
At the Toronto campus—three buildings clustered around Bloor Street and Mount Pleasant Road, including a distinctive, copper-green-topped tower—sharespace was not without controversy. Some people, particularly younger employees, embraced it, appreciating the new laptops, pleasant workspaces and ability to collaborate. But the space-saving and expensive endeavour came with headaches like long lines for the elevator, dirty bathrooms and a daily scramble to find a seat that brought back high-school cafeteria flashbacks for some.
Despite his affable "let's have a pint in a pub" public image, some senior leaders found him off-putting. At one "directors plus" meeting of about 800 employees, Laurence told everyone to pull out their Rogers-branded MasterCard and wave it in the air. That light-hearted moment quickly took on a menacing tone when he clicked to several slides listing the names of those in the room who did not yet have a Rogers credit card. He encouraged those who were named and shamed to apply immediately, pointedly adding that he was available to personally help with the application process.
He demanded similar engagement online. He asked everyone in the company to personally connect with him on LinkedIn. He monitored who was reading his corporate blog, and departments whose employees weren't poring over his musings received questioning emails. Heavy users of company printers received ominous warnings, and when a few Rogers employees forwarded a confidential internal memo to people outside the company, he en-listed the IT department to hunt them down. One employee said the constant monitoring had a "Dear Leader" quality to it, referencing the North Korean dictatorship.
Laurence held regular meetings with senior staff, who were expected to be intimately familiar with their department's numbers. Checking with their team and reporting back was no longer acceptable. If he didn't like what he was hearing, he had a disquieting way of holding up his hand in a traffic-stopping motion and looking away.
In a way, Laurence's management style was similar to that of Ted Rogers himself. It was a striking change from the refined, respectful approach of Nadir Mohamed. "Then you go rocketing right back toward the Ted end of the continuum to a guy who doesn't really have permission to do some of the things," says a former long-time executive. "As an executive, you don't get the right to be as bold as Ted was. So I think there was probably a little bit of cultural rejection along the way."
Guy Laurence may have been demanding and controversial, but he did have a strategy. In May, 2014, he introduced his much-heralded Rogers 3.0 plan—seven points that included seizing opportunity in the enterprise market, investing in networks and, crucially, improving customer experience. He said he would create sustainable revenue growth and move away from the company's historical practice of hitting quarterly profit targets by scrambling to slash budgets or jack up prices.
Some of his initiatives, such as Roam Like Home and his introduction of unlimited home Internet packages, were widely recognized as savvy moves that resonated with subscribers. He also scored a win with the multipronged acquisition of Mobilicity, giving Rogers a victory over Telus (which had tried unsuccessfully to acquire the startup carrier) and landing the company a trove of valuable wireless airwaves. But other strategies were less successful, with doubts lingering around the effectiveness of partnerships with millennial content and marketing firm Vice and the music-streaming service Spotify, which were meant to sweeten wireless offerings and encourage customers to use more mobile data.
Key to the Rogers 3.0 plan was Laurence's bold new "volume to value" strategy, which saw him shift the company's focus from acquiring as many subscribers as possible to focusing on the top end. Almost as soon as it was implemented, Rogers started attracting fewer contract wireless customers. The company reported a net loss of 1,000 customers for all of 2014, an inauspicious milestone to cap off his first year. Some senior executives felt the strategy was misguided: Why focus tightly on high-value customers, when there was so much room in the middle of the market? After several quarters of losing badly to Bell and Telus on net additions, Rogers began to regain its share of the market—but some say the company went back to competing for customers using price and promotional incentives to do it.
Perhaps Laurence's largest ambition was to improve Rogers's customer service and create more affinity for the brand. By the time he took over, the company had a serious problem: It had treated its customers poorly for years, and now that Bell and others were offering competing TV services, many of them were leaving. "It got so bad because the company grew very swiftly in a hot market," wrote Kenneth Whyte, who was senior vice-president of public policy at Rogers until recently. "You're busy filling demand and capturing share, and people are so happy to have your product that they will put up with sub-optimal service, but eventually things catch up with you. The novelty wears off, growth in the sector slows, customer expectations rise…and you begin to learn that a lot of the people that use you don't much like you."
So Laurence had his team introduce easier-to-understand bills, offer customer service on social media platforms, and design a tool to manage Internet and cellular data usage. The number of complaints about Rogers lodged with the federal telecom industry ombudsman has since dropped impressively—down to 861 last year, compared to 3,803 the year before Laurence arrived. But progress on customer perception of Rogers was hard to come by. A recent ranking of wireless customer satisfaction by J.D. Power shows Rogers still struggles with its reputation—it came in last out of nine mobile brands—and customer turnover, or "churn," continues to be an issue.
When it came to relations with the Rogers family, several executives say it was the way Laurence removed Edward and Melinda from their operational roles that caused the most strain. Many believed it had to be done, but stripping their management titles—and particularly the curt, company-wide email sent when Melinda lost her role as VP of corporate strategy—caused friction. Edward, who initially accepted the loss of his executive vice-president title, later continued to interfere behind the scenes. Melinda, though upset at first, was more respectful of her non-operational role. But the siblings also frequently disagree on Rogers business issues, and Laurence was often drawn into the awkward position of referee.
The battle over the ill-fated Eclipse TV platform was the final straw. Laurence was an enthusiastic proponent of the new technology and, by the time the board met last August, he had already shown it off to financial analysts and was making public comments about a timeline for launch. But as the project dragged on, he ran out of runway from the family and, by extension, the board. Edward, who has deep ties in the cable industry, was digging in, leaning toward Comcast's licensed product, which Shaw had already embraced as its TV solution. "Cable guys move in a herd," one former executive says.
Rumours that Laurence would be unseated by the family had floated around Toronto business circles practically since Laurence introduced his Rogers 3.0 strategy, but after the dispute over Eclipse, they were starting to intensify. The once-friendly relations with the Rogers family had frayed. Phil Lind, who chafed at the CEO's style from early on, says the board began to have questions about Laurence's performance and behaviour. "Over all, he consistently missed on a number of key internal metrics," Lind says now. "He made a number of commitments that he didn't deliver on, and he treated employees in a condescending and arrogant way."
Soon after the Eclipse presentation, on a crisp mid-October Sunday, Laurence, who had a habit of working seven days a week, was in the office, preparing to release the company's latest quarterly numbers the following week. He had a meeting with board chairman and long-time Rogers family ally Alan Horn, at which he expected to review the financials. Instead, Horn broadsided him with the news he never expected to hear: The board had decided to fire him.
It's now been seven months since Laurence was axed. Tellingly, he was barely out the door before the Eclipse project was shelved. The board immediately began negotiating a licensing agreement with Comcast, and by mid-December Rogers announced plans to take a massive, $484-million writedown on the in-house project.
The board initially believed Joe Natale would be free of his non-compete agreement by the end of 2016, but the discovery of another clause led to protracted negotiations with Telus and an unexpected six-month period where Horn was interim CEO. Natale is now finally in place, and while he hasn't publicly announced his plans for the company, a string of Laurence's key team members have already left, including Jacob Glick, Frank Boulben and Nitin Kawale.
We may never know the real reason why Laurence was fired, although it has emerged that the board's decision was unanimous. According to Lind, who sometimes speaks on behalf of the Rogers family, poor performance was a factor, and Laurence's early exit had nothing to do with the politics of a family-controlled company. "Guy's performance would have led to the same outcome no matter where he was CEO," he says.
For his part, Laurence declined to be interviewed for this story. He offered only the following comment in response to Lind's remarks: "I have no wish to get into a slanging match with Phil Lind, despite the obvious inaccuracies in what he has said."
In a final blog post shortly after he was dismissed, Laurence admitted, "not everything we did worked," but told employees their work had led to better financial results, improved customer experience and a long list of other achievements.
The executives who spoke off the record offer a more nuanced view. One felt that Laurence would still be CEO if only his grand plans had delivered results more quickly. "Guy had said, 'I'm going to do these things and it's going to work and I'm going to get better results,'" the executive says. "But in the end, I think Guy didn't deliver big enough results fast enough in order to give people comfort that decisions he was making were the right ones."
Others felt that family politics did play a big role. "If you don't have complete buy-in from the family, you better hit it out of the park," says one former executive.
Independent observers, such as BMO telecom analyst Tim Casey, seem more inclined to give Laurence his due. "The biggest thing that Guy brought was a fresh look," he says. "I'm not saying that he pressed the restart button, but I think he brought more change than somebody who had grown up in the company would have brought." Casey says that, in the end, Laurence "turned the numbers" on wireless. "And that's the most important thing at Rogers in terms of making the stock work."
Despite Lind's view that Laurence didn't perform, the board did award the former CEO a larger cash bonus than promised, in both 2014 and 2015. It's also worth noting that employee engagement at Rogers improved by 2% in 2016, meeting the company's internal target, and one insider says the company's net promoter score (a measure of customer perception) is the highest it has been since the company began tracking it. The telecom's share price has also hit new heights recently, although that could be partly due to a buoyant wireless market that has been lifting all three carriers.
Although Laurence may not have achieved all the goals he set out for the company, some feel the board would have given him more time if relations with the family had been better. If that's the case, it raises a troubling concern about such ostensibly public companies. Canadian cable companies widely use the dual-class share structure (as do other family-founded companies, such as Bombardier), and a wave of tech companies are using a similar structure now as they turn to the public markets for capital—Google did it, and so did Canada's Shopify. It gives operators the ability to make long-term bets and to worry less about the quarterly financial pressures. But when the visionary founders are no longer at the helm, does the family as controlling shareholder still always know best?
While the CEOs of Bell and Telus only have to answer to investors, it seems the CEO of Rogers must also consult an aging phalanx of friends-of-Ted, who are intent on immortalizing the company's founder. Ted's penchant for declaring, "The best is yet to come," has become one of the company's signature lines, slipped into advertisements, adorning red cable trucks and lingering at the end of corporate reports above his signature. Ted's forward-looking mantra also graces a larger-than-life bronze statue erected in his honour in 2013 outside the Rogers Centre, home to the Toronto Blue Jays baseball team, one of his marquee acquisitions.
"We're still in the process of transitioning away from being Ted Rogers's company to being a professionally managed company," says one senior executive. "There are people, especially on the board, who are not willing to let go and not willing to let that transition happen. Until this thing gets sorted out, there will be tensions between management and the CEO, management and major stakeholders, and guys who feel they built the company."
The question now is, where does that leave the new guy? Natale is off to a good start with Lind and the old guard. "What we see in Joe is a CEO who is well liked and respected across the board, he has an established track record, and he knows how to engage and work with people," Lind says. "Joe's track record speaks for itself—his financial, operating and customer metrics were stellar. He is a warm and respectful person who earns the confidence of anyone around him."
So far so good. But Laurence was well liked by the board at first too. After all, they're the ones who hired him. And while Natale seems to have all the qualities it takes to succeed, it's hard not to wonder whether he too will eventually run into a wall with the family. Even now, before he has really gotten started, Lind seems to hint that he'd better not go rogue.
"Look, every CEO has a board or somebody to answer to. And in our case, some members of the board are Rogers family," Lind says. "But, in the end, the board wants a CEO who will run the company and do well." What would that take? "They want a CEO who will consult widely, be transparent in decision making and be well regarded by all stakeholders." Consult widely. Good advice for any leader. Especially a CEO who won't necessarily be calling the shots.
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