Back to President's Message 

April 2008

LESSONS TO LEARN 

Below you will find a re-print of an article from Business Week.  It explains, far better than I can, what happens when a really good company loses its core values.  Sprint Nextel employed some of the brightest managers in the business.  They had a sound strategy and an advantage in virtually every business and technological aspect. However, none of it mattered once they forgot about the customer.  I think that the lessons speak for themselves.     Best regards,  Alex Sprint's Wake-Up Call Reversing a miserable service reputation after the Nextel merger will be key to the company's turnaround by Spencer E. Ante When Daniel R. Hesse was named chief executive of Sprint Nextel in December, he figured that customer service was going to be one of his biggest challenges, given how poorly the wireless service provider had performed on that count in recent years. He quickly found out precisely how big. The lanky 54-year-old walked into his first operations meeting at Sprint headquarters in Overland Park, Kan., and found that customer service wasn't on the agenda at all. He changed course right away. Customer service is now the first item discussed at every one of the weekly meetings. "We weren't talking about the customer when I first joined," says Hesse. "Now this is the No. 1 priority of the company." With good reason. Since Sprint and Nextel merged three years ago, the deal has turned into something of a fiasco, with the company's stock down 66% since the agreement was struck. Poor service is a central reason. After the merger, unhappy customers defected in droves, and profits evaporated. On Jan. 31, Sprint Nextel said it would take merger-related charges of as much as $31 billion, wiping out nearly all of the deal's value. In addition, two lawsuits have been filed against the company for allegedly extending customers' service contracts without their consent. Employees like Paula Pryor saw the merger's impact firsthand. The 38-year-old, who worked in a call center in Temple, TX says the numbers-driven management approach implemented after the combination led to poor morale and deteriorating customer service. Even bathroom trips were monitored. "They would micromanage us like children," says Pryor, who was fired last year after taking time off when her father died. The toll on Sprint's reputation has been dear. The company has ranked last among the country's five major wireless carriers in customer service every year since the merger in 2005, according to annual surveys by J.D. Power & Associates. Now, two months into his job, industry veteran Hesse is disclosing for the first time detailed plans for turning around customer service. He's increasing investments in customer care, adding service technicians in retail stores, and reversing many management practices in customer call centers. Hesse is convinced that restoring Sprint's reputation with customers is the key to its future. "You will see progress," he says. "We have the right people in place. We will get it done." For the combined Sprint Nextel to be criticized for quality issues is a remarkable reversal. During the 1980s and '90s, when Sprint was the nation's third-largest long-distance company, it distinguished itself by advertising a fiber-optic network so high-quality you could "hear a pin drop." Nextel was known for its "push-to-talk" technology and the best rate of customer retention in the industry. When the two unveiled plans to merge in December, 2004, there was a certain logic to the deal. Separately, they were much smaller than AT&T (T) and Verizon Wireless, but together they would nearly rival the two wireless leaders in size. The theory was that, combined, they would have the bulk to get the latest phones, best prices on equipment, and most complete network for wireless customers. "The combination of Sprint and Nextel builds strength on strength," Gary D. Forsee, CEO of Sprint and later the combined companies, said then. But as the two formally combined in August, 2005, it became clear this deal would be even more complex than the typical megamerger. At the same time Forsee and Executive Chairman Timothy M. Donahue were piecing the two companies together, they laid out an aggressive strategy for the combined entity to become a leader in wireless broadband services and content. That led to plans to spin off Sprint's local telephone business, form partnerships with the cable industry, and develop a wireless technology known as WiMAX. "There was so much going on after the merger that there was a lack of focus," says one former senior-level insider. In September, 2005, the month after the merger closed, Forsee told Wall Street that the deal was going more smoothly than expected. He raised the projection for expected "synergies," or cost savings, to $14.5 billion, up from the original $12 billion estimate at the time of the merger announcement. That boosted pressures to find cost savings throughout the company, say former employees and executives. An important component of the effort was importing the quantitative management approach of Sprint to Nextel. While some of the new metrics worked well, others had detrimental effects, former employees and executives say. In particular, call centers began to be measured and viewed primarily as cost centers, rather than opportunities for strategic advantage. Customer service ended up a secondary priority, say former executives. Forsee, now the president of the University of Missouri, declined to comment for this story. In the fall of 2005, as board members gathered for their first meetings as a combined company, the directors from Nextel noticed another key change, according to the former senior-level insider. Before the merger, Nextel directors talked at every board meeting about "churn," the industry term for the percentage of existing customers who leave each month. The directors felt churn was a good shorthand way to understand the quality of customer service, and they prided themselves on Nextel having the lowest in the industry. But after the merger closed, the combined board paid little attention to churn, concentrating instead on the progress with synergies and strategic initiatives. "From the very beginning there was a philosophical difference on churn," says the former insider. In the trenches, meanwhile, workers were dealing with fallout from the merger. Pryor remembers the conditions in her Texas call center, originally a Nextel facility, shifting dramatically in the first months after the merger closed in late 2005. Managers began tracking what she was doing on her computer. Overtime pay became much harder to get. Most puzzling for her was the pressure to keep customer calls short. At Nextel, she was judged only on the number of customer problems she solved each month, however long they took, and she would occasionally spend 30 minutes to resolve a thorny issue. But after the merger, speed was the priority, she says. "They would say, Your calls need to be shortened,'" she says. `LIKE NOAH'S ARK' Other employees say they felt similar pressure. Gayle R. Romero, who worked in Sprint Nextel call centers for six years, says that at one team meeting after the merger, a manager said, "if you don't think you can handle this, I hear McDonald's is hiring." Says Romero: "Everyone was scared." Customer service issues began to surface later that year. In January, 2006, Sprint unveiled plans to merge the two billing and customer care systems from the combined companies. But employees say there was little evidence of any progress in the following months. Service reps had to toggle back and forth between systems, and at times couldn't get access to billing or technical information for customers. "It was like Noah's Ark," says one former insider. "We had two of everything." Churn rose quickly, hitting 2.4% in the third quarter of 2006. That was the highest among the country's major carriers and far above the 1.4% rate Nextel reported before the merger. At the same time, Sprint reported softer-than-expected earnings, punishing its stock. As Sprint came under financial pressure in 2006, it began to ask call-center workers to engage more in sales. Whereas Nextel service reps had no sales quotas, workers at the combined companies were required to hit targets for renewing contracts or retaining customers who wanted to cancel accounts. One call-center employee says she was supposed to renew 600 to 900 contracts per month, and sometimes the target exceeded 1,000. In the customer retention unit, workers were given cash bonuses of $2,000 to $3,000 per month if they met monthly quotas. "They wanted those big bonuses," says Romero. Allegations in the two lawsuits against Sprint raise questions about how far Sprint workers went in meeting those sales quotas. Selena L. Hayslett, a realtor from Apple Valley, Minn., says she called Sprint Nextel four times in late 2006 to dispute charges on her bill. Then she realized that each time she called, Sprint was extending her contract, without her consent, according to an affidavit filed in one of the suits. "I felt tricked," said Hayslett. Her complaint is included in a lawsuit filed by the Minnesota attorney general, alleging that Sprint extended contracts when customers made small changes to their service. "It's kind of like the Hotel California," says Lori Swanson, the attorney general, "where you can check in and never leave." Sprint declined to comment in detail on the lawsuit. However, a spokesman says there are "discrepancies between our rec-ords and the lawsuit's portrayal of customer interactions." Paula Appleby, a plaintiff in the other lawsuit, claims she tried to cancel her Sprint contract a number of times. But "each time she has attempted to cancel her service she has been told that her contract had been previously extended," according to the complaint, a federal lawsuit filed earlier this month seeking class action status. Sprint said it is still reviewing the Appleby lawsuit and declined to comment on specific claims. In early 2007, as its financials deteriorated, Sprint cracked down on the freebies that call-center workers could give to keep customers happy, say current and former employees. One current manager in customer retention says that in the first half of 2007, Sprint cut back on virtually all the free minutes, service credits, and free phones that his workers used to be able to dole out. "One hundred minutes is it," says the manager, who asked for anonymity because he does not have authorization to speak to the press. NO STOPWATCHES The new policies hurt Sprint's ability to build its customer base. In the third quarter of 2007, churn stayed high, and Sprint saw its subscriber numbers remain flat, at 54 million, while rivals AT&T and Verizon added millions. In October, Forsee stepped down as CEO under board pressure. Today, Hesse is reversing course on several fronts, hoping to salvage what he can from the troubled merger. He and his lieutenants aren't eliminating the quantitative approach entirely, but they're changing many of the old metrics to now emphasize service over efficiency. Bob Johnson, Sprint's new chief service officer, has eliminated limits on the amount of time service reps spend on the phone with customers. Instead, he'll track how frequently reps resolve customers' problems on the first call. Employees who don't solve a minimum percentage on the first call won't be eligible for sales bonuses. He'll also track how quickly customer calls are answered, to ensure they're getting prompt attention. "My incentives and policies are all driven around improving the experience," says Johnson. He says the long-delayed combined billing system will be done by May. Hesse is also returning to the Nextel philosophy in a number of areas. Churn, for example, is once again a top priority, discussed at every operations meeting. The figure remained stubbornly high, at 2.3% in the fourth quarter of 2007. As for the allegations in the two lawsuits, Johnson says Sprint has implemented a zero tolerance policy for shoddy customer service, which includes a new focus on extending contracts only with detailed approvals from customers. Among other things, Sprint sends a letter to customers outlining any changes to their account, and customers have 30 days to cancel the changes. Hesse knows he has a long, hard road ahead of him. Still, he's convinced Sprint is at last moving in the right direction. "We're beginning to improve customer service already," he says. "There will be a lag between when it improves and when the world knows that Sprint's customer service has improved. There's always a perception lag."

  *******************************************************************************  

January 2008

LOOKING AHEAD TO 2008    

2008 looks to be an extremely interesting year with its own set of challenges for ComNet. The commercial construction market forecasts to be extremely strong during most of 2008. Architects and engineers have full order books and this work will flow out to specialty contractors, like ComNet, throughout the coming year. This also holds true for data center activity which is in the early innings of a multi-year upgrade cycle. However, we also have to assume that our technology service offerings will be under pressure during 2008. Retailers are lowering their profit expectations and the financial sector is a disaster. While it is almost impossible for these customers to remain competitive if they stop spending on technology, it will likely lead to smaller projects as technology spending will be more targeted. There will almost certainly be greater pricing pressure on service providers like ComNet. ComNet is well positioned to withstand whatever the market brings us and even succeed in the process. As I have stressed on many occasions, companies that manage their cash and manage their risk will get through anything. In our business, risk management focuses on a few primary areas: · What projects do we pursue? This involves value judgments regarding the customer and the market segment. It’s no secret to anyone that all customers are not created equal. · How do we price the various projects? I hope that we would view the risks associated with working for a sub-prime lender differently from the risks associated with working for a large insurance company. If so, then we should acknowledge this risk when bidding the work (assuming that we would even want to) and price it accordingly. In simple terms, the higher the risk, the higher the price. · What contractual terms do we work under? If we weigh out everything above and decide to work for a riskier customer, then how do we protect ourselves? We do this through the contract negotiation process. First and foremost, this involves cash management. We try and negotiate up-front payment where possible. We stay overbilled and we collect our receivables aggressively. · How do we get the job done? If we take a look at the other side of the coin, we will quickly see that if things get difficult for ComNet, then they will be equally difficult for our subcontractors. The labor source that we rely on to get the job done involves a risk management decision. I think that everyone intuitively knows this, but it is worth re-stating. ComNet has some very good subcontractors, but as a general rule, subcontracting involves more risk than utilizing our internal labor force. This applies not only on the job site, but also in the eyes of our customers. I realize that we can’t get ComNet employees to every location, but we had better get accustomed to our customers “wanting to make sure that we are using our own employees”. Thankfully, I have a few people in the Bethel office that went through the Great Depression and they keep things in perspective for me. With the exception of 2001-2003, we have all participated in a good economy for the past 15 years. During that time, the concept of risk has faded into the background. We have seen this in the stock market and in interest rates. I think that it would be prudent of us to re-acquaint ourselves with the concept of risk and the process of risk management. Being unrealistically optimistic obviously isn’t managing risk. However, it is equally important to stress that being completely conservative isn’t managing risk either. ComNet is in the business of risk management, not risk avoidance. Managing risk effectively involves a process, which has been discussed above. If you haven’t gone through the process, then you haven’t managed the risk - you just got lucky. As you can also see from above, it involves everyone within ComNet. No one gets a free pass. All this may sound as if I have lowered my expectations going forward. Nothing could be more wrong. I firmly believe that tough times tilt the odds toward the strongest companies. It*s the weaker companies that suffer. We have all put a lot of time and energy into making ComNet the best run company in our industry. This means that we have built an organization that expects to succeed regardless of the challenges.

  *******************************************************************************  

Christmas 2007

SEASONS GREETINGS   

I want to sincerely thank everyone for all their efforts during 2007. This year has been a challenge in many ways and everyone has worked hard to overcome the obstacles. This is a credit to the professionalism and dedication of ComNet’s employees. I take enormous pride in the men and women that I get the privilege of working with every day. I believe that you are the best team in the industry. During the holiday season, you should take a few minutes to think about what ComNet has accomplished this year and you should be proud of your contribution to those achievements. Every day, I become more and more convinced that ComNet provides a level of service that our customers desperately need. Our integrity, attention to detail and professionalism truly are rare commodities. I see this demonstrated every time a customer comes back to ComNet after trying out one of our competitors. Through your determination, ComNet is stronger and better positioned in the market than it has ever been. I look forward to 2008 and expect it to be ComNet’s best year ever. This past year has convinced me even more that one of ComNet’s greatest assets and the single biggest differentiator between us and our competition will be our ability to staff major projects and structured roll-outs with ComNet employees. I believe that our success will increasingly depend on our ability to combine our project management capabilities with an expanded in-house technician footprint. Customers have come to expect this level of commitment, and our success will enable us to attract and retain the national customers that make up the core of ComNet’s business. At this time of year, I hope that you will be able to spend time with your families and enjoy the things that matter most. Please remember the troops during this holiday season and give thanks for their sacrifice. Best wishes and seasons greetings!!

 

  *******************************************************************************  

December 2007

BACK TO THE BASICS   

I recently read a story about Home Depot’s “warm transfer” policy and how they shift a customer from one employee to another. Say you’re in aisle eight and you want a screwdriver, which happens to be in aisle five. The employee in aisle eight is supposed to walk you to aisle five and either show you the screwdrivers or introduce you to the employee in that aisle. The essence of the story wasn’t about Home Depot’s success with warm transfers, but the fact that Home Depot has let the practice lapse. The story goes on to suggest that Home Depot’s drift away from their core values has been partially responsible for their disappointing financial results of late. This caused me to think about how a well run company should react when things don’t go its way. Home Depot is one of many companies currently being impacted by the downturn in residential home construction. Home Depot didn’t cause the downturn and they certainly can’t stop it. In a similar light, I don’t think that it is a surprise to anyone that ComNet has also been impacted by circumstances that are outside of our control. We have had to deal with the impact of corporate mergers and changes in real estate philosophy at some of our larger customers, which have had a negative impact on the company. This is just part of business. Sometimes these things work in our favor and sometimes they don’t. This year, several of these factors haven’t worked in our favor. The big question is, what do we do about it? I think that we learn our lesson from Home Depot and go back to basics. We focus on servicing our customers to the very best of our abilities. We don’t let e-mail be our only method of contact. We pick up the phone more often and let our customers know that there is a real person working to resolve their problems. We become fanatical in our attention to detail and bring in our projects as profitably as possible. We adhere to the financial principles that have served us well in the past by managing our cash as prudently and as effectively as we can. A company that excels at customer service, profitability and financial discipline will be around a hundred years from now. ComNet will be that company. If you’ve read this and have the impression that times are desperate, nothing could be further from the truth. ComNet will be profitable again this year and we have as many positive things going on as any company in our industry. However, I think that there are things that we can do better. I believe that ComNet is a great company and great companies are able to identify and address issues before they become a problem. Let the other guys practice crisis management.

  *******************************************************************************  

July 2007

EXECUTING THE PLAN  

In the previous newsletter, I described a number of initiatives that ComNet has invested in this year. In brief, these were: A start-up office in southern California Expanding our presence in the north Florida commercial market Developing an audio/visual service offering in Texas Developing a security system offering in Connecticut Implementing a new work order system I hope that you get as excited as I do when you think about the possibilities and opportunities that these ideas can generate. However, ComNet is now faced with the task of executing these plans and turning good ideas into real-world capabilities that contribute to the profitability of the company. To use a cliché, this is where the rubber meets the road. An organization’s ability to effectively execute its plans is what separates the great companies from the good ones. We operate in a rapidly changing industry and the needs of our customers seem to change overnight. As a result, ComNet’s need to evolve along with our customers will never cease. Our ability to accomplish these initiatives is critical to our success going forward. ComNet isn’t like some of our large customers who seem to have unlimited cash resources. In order to ensure the successful execution of our plans for the future and to evolve along with our customers, it is essential that we pay close attention to cash at all times. Our ability to finance future growth is dependent upon turning our plans into profitable ventures. The initiatives noted above will touch every employee within ComNet. I am proud of the team that we have assembled and ComNet’s success calls for the best efforts of everyone in the Company, at all levels.

 

 *******************************************************************************  

April 2007

LAYING THE FOUNDATION  

WHO IS YOUR CUSTOMER?

 *******************************************************************************

December 2006

HAPPY HOLIDAYS

I want to sincerely thank everyone for all your contributions during 2006. A little more than a year ago, ComNet established 6 Strategic Principles that would govern the company for the next 5 years. For new employees, these principles were: Grow revenue at 15% per year Broaden our scope of services Train and promote from within Extend our geographic range Build the ComNet brand Go where the money is These goals represent a significant challenge to any organization and our only chance of meeting them lies in the dedicated efforts of all of ComNet’s employees. In just a year’s time, we have made tremendous progress, which benefits everyone at ComNet. Through your hard work, we are creating a much stronger and resilient company that is far better able to weather troubles when they come. At this time of year, I hope that everyone will be able to spend time with your families and enjoy the things that matter most. Please remember the troops during this holiday season and be thankful for their sacrifice that allows us to live in the most prosperous country in the history of mankind. You don’t have to watch much television to be thankful for all the places that you don’t live. You should also take a few minutes to think about what ComNet has accomplished this year and take pride in those achievements. You have been part of setting a goal and meeting its challenges. That’s something that few organizations, or individuals, can say for themselves. I take pride in the men and women that I get to work with every day. You are truly a special group. Best wishes and seasons greetings!!

*******************************************************************************

October 2006

FROM GOOD TO GREAT  ... 

 A SOLID START

IT'S ALL IN THE PROCESS

 *******************************************************************************

January 2006   

  ATTENTION TO DETAILS....KEY TO SUCCESS!  

Congratulations to all of ComNet's employees for making 2005 the most successful year in our history. You should take pride in what you have accomplished this year because it is truly a testament to your dedication, hard work and flexibility. I believe that one area in which you have really excelled during 2005 is your attention to detail. Your ability to break complex tasks down into their individual functions has enabled ComNet to take on projects of increasing size, and has allowed ComNet to continue expanding our service offerings. We all know that ComNets emphasis on solid cash management requires continuous attention to detail. In fact, attention to detail impacts all aspects of ComNet*s business and is a characteristic of every well managed company. It is no surprise that ComNet has struggled in the past when we became overwhelmed by the forest and lost our ability to focus on the trees. Just as important is the impact that attention to detail has on our customers. Put yourselves in their shoes. Think about the times that you have been to a hardware store or to a department store. I am sure that everyone has experienced store personnel who didn’t have time for you and lacked knowledge about the merchandise. I am also sure that on rare occasions you have found personnel who were extremely knowledgeable about their store and the products they sell. They were willing to take the time to make sure they understood exactly what you needed so that you left the store feeling good about your purchase; in other words, a satisfied customer. Wasn’t the latter experience like a breath of fresh air? This is how our customers should feel about ComNet; that we are focused on every detail of their project to ensure that their every expectation is met. Attention to detail has helped us succeed during 2005 and will be a critical factor in achieving our 5-year strategic plan. Thanks again for all your efforts. For want of a nail, the shoe was lost. For want of a shoe, the horse was lost. For want of a horse, the rider was lost. For want of a rider, the message was lost. For want of a message, the battle was lost. For want of a battle, the kingdom was lost. And, all for the want of a nail.

 *******************************************************************************

December 2005

  HAPPY HOLIDAYS

I want to sincerely thank everyone for all your efforts during 2005. While we have experienced some growing pains, 2005 will be another extremely successful year for ComNet. We should all take pride in this accomplishment, because consistent, predictable performance is the trademark of every well managed company. This indicates that you have developed the ability to effectively manage risk. Our business will always contain risks, but ComNet*s success will depend on our ability to deal with those risks. We must continue to price in relation to the risks that we assume. We must identify and, if necessary, avoid those opportunities that involve excessive risk. Consistent performance has also allowed us to set a new course for ComNet. Last month, I spoke about the 6 Strategic Principles that will govern ComNet for the next 5 years. Enclosed with this newsletter is a laminated card reflecting the 6 Strategic Principles and a brief statement about ComNet. I hope that you will carry this card with you to serve as a reminder of who we are and how we will Build Our Future Together. By putting these principles into action, we will take ComNet to a new level. Thank you again for your contributions throughout the year. Your hard work and dedication have made a real difference. Nothing makes me prouder than to be part of the ComNet team.

 *******************************************************************************

October 2005

CUSTOMBER SERVICE IS A CONTACT SPORT

BREAKING NEWS

There are a number of exciting things taking place at ComNet as we move into the second half of 2005. ComNet has recently hosted exhibits at the Interop show in Las Vegas and the C3 Expo in New York City. These events are great opportunities to showcase the services and capabilities that ComNet can bring to a customer. At Interop, ComNet was the only service company out of 350+ exhibitors. Our position was truly unique and the response from the attendees was terrific. In addition to trade shows, ComNet has made a concerted effort to increase its internal sales capabilities by targeting the most talented individuals available. Al Williams has joined ComNet as Director of Carrier Sales. Bill Steele, Jim Galarneau and Jay Toumey have come on-board as Account Executives in Florida, California and Texas respectively. These are extremely talented professionals who will be tremendous assets to ComNet as we go forward in 2005. You may be wondering why the company is taking these steps now given its successful history. I believe that ComNet has a great story that needs to be told. We need to tell people that ComNet has been providing the telecom industry with the best service available for over 20 years. We need to do a better job of telling the industry about the new service offerings and capabilities that ComNet has developed. We have a story of sound management, financial stability and operational performance that is second to none and it needs to be told. ComNet’s management is no longer satisfied with being the best kept secret in the industry and we are committed to doing a better job of telling ComNet's story, your story. Make no mistake, this is the story of each and every employee of ComNet. We don't sell products or materials, we sell service. Service is nothing more than the collective efforts of talented and dedicated employees. If we continue to passionately focus on customer service, then we will be able to write a new chapter in the ComNet story and this one could be the greatest story that we have ever told.

 *******************************************************************************

April 2005

CHAOS IN THE TELECOM INDUSTRY...Friend or Foe??

The following is excerpted from a book entitled Business Climate Shifts. While is specifically deals with multi-national companies, I believe that the fundamental principles apply to ComNet as well. -In today’s business environment, a company must be willing to accept chaos or at least “bounded instability” in its industry..., and its own marketplace as part of the reality of doing business. -In the long run, linear thinking will kill you. -Forget hierarchies. Focus on creating an organization that’s built for speed and for customers. -Business is shifting from being about “transactions” to being about “value-added” interactions with customers. -In a world where most products and services ultimately become commodities, customer care becomes the only true and lasting differentiator. I know that some of you will read this and think…”can’t he think of something else to write about”. My simple answer is no. I believe that ComNet’s long-term success will be determined by our ability to become a true value-added organization. By value-added organization, I mean an organization where everyone within the company is focused on customer service, regardless of whose account it is or what office they report to. Look at the principles above and think for a moment about how different the telecom industry is today as compared with 5 years ago. AT&T has been sold. MCI has been in bankruptcy, out of bankruptcy and then sold. IBM no longer makes personal computers or laptops. Many of ComNet’s competitors have suffered crippling financial difficulties. Voice and data continue on the path to convergence. Customers ask us to perform different tasks every day. What will the next 5 years bring us? What services will we be providing 5 years from now? Will we be facing the same foreign competition that other industries have struggled to deal with? There are thousands of experts in this country asking themselves the same questions and they don’t know either. Believe me when I tell you that we don’t take on H&R Block rollouts or New York City schools because we want to see people lose sleep at night. We do these things because the marketplace demands them. ComNet will be headed for serious trouble the second that we stop servicing the marketplace. I believe that ComNet is the premier service company in the industry. I don’t say this just to make people feel better. I truly believe that ComNet provides its customers with the best service that they will find anywhere. However, I also believe that the only thing guaranteed by tomorrow is that we will have the opportunity to make it better.

“Every morning in Africa, a gazelle wakes up. It must outrun the fastest lion, or it will be killed. Every morning in Africa, a lion wakes up. It must outrun the slowest gazelle or it will starve. It doesn’t matter whether you’re a lion or a gazelle. When the sun comes up, you’d better be running.”

Unknown

 *******************************************************************************

January 2005

Wow, it’s hard to believe that we are right around the corner from 2005.  The past year has been one of unmatched success for ComNet, but now it is time to look ahead.  We need to think about the challenges that we will face in 2005 and the things that we will have to do in order to meet those challenges.     We should all expect 2005 to be even more demanding than 2004.  Hold on …. don’t start sending in your resignations yet.  I don’t mean that people will be asked to work harder.  In fact, I couldn’t be any prouder of a group of people than I have been of ComNet’s employees and the effort that they have given this past year.  When I say that 2005 will be more demanding, I mean that we will have to deal with 2 specific issues.  First, we will need to adapt to the ever increasing range of services that are being required by ComNet’s customers.  Second, we will need to provide these services through a rapidly expanding workforce.  Our ability to meet these 2 challenges will determine whether ComNet is able to create sustained excellence and continuing success.  It sounds simple, but these simple things can be the most difficult challenges that a company will ever face.    So, how do we deal with these issues?  We do it by sticking to the basic principles that have sustained ComNet for 20 years.   - ComNet is a service organization and our customers expect us to give them the best customer service in the industry.  Our customers expect us to communicate with them in a professional manner and to bring value-add wherever possible.  Our customers expect quality results at a fair price and our customers expect us to meet deadlines.  When a task looks impossible (and they regularly do), our customers expect us to find a way. - ComNet manages its own business with an unrelenting focus on profitability and cash flow.  We manage our contractual relationships with sound business principles and we make solid judgments with regard to business risk.  ComNet is one company, not three offices and we support each other.  We separate ourselves from everyone else in the industry by being able to bring all of ComNet’s resources to bear on a problem. ComNet’s success in 2005 will depend on our ability to apply the basic principles above to tasks that are increasingly difficult and complicated.  And our success in 2005 will depend on our ability to instill these basic principles in new employees as quickly as possible.  Always remember, new employees don’t just learn these things from management.  They also learn from the person in the next cubicle and from the person at the other end of the cable.    I believe that we have the opportunity to make 2005 even better than 2004.  So, let’s get started.

*******************************************************************************

October 2004   

It’s All About The Service

During the 1996 presidential election someone coined the expression, “It’s the economy, stupid”.  It defined the 1996 election and has ultimately become a part of U.S. election history.  Was the author really trying to be insulting?  It is very likely, given the nature of modern politics.  Within the context of the election, the expression meant that a candidate was inviting defeat if he forgot which issue was most important with the voters.  This wasn’t to say that the economy was the only issue worthy of discussion.  However, it did mean that no one could be successful if they ignored something that was fundamental and obvious.  Ultimately, it meant that the voters, and not the candidate, would determine what was important. I don’t think that day-to-day life at ComNet is any different from an election.  Our customers make choices every day as to whether they will utilize ComNet or a competitor.  In most instances, ComNet is in the position of the incumbent candidate and as such we have to run on our record.  We seldom have the luxury of being able to get by with rosy pictures and unlimited promises.  It is our prior history with a customer that will determine how they vote.  Unfortunately, we operate in a different environment than a politician.  In politics getting 50% of the vote is a win and getting 60% of the vote is a landslide.  At ComNet, we will be out of business tomorrow if we only get 60% of our customers to vote for us.  Unanimous consent is ComNet’s only objective.  So what is the issue that is so fundamental that we can’t afford to ignore it?  It’s simple.  It’s all about the customer service.  Before our customers call us, they are going to look back over previous projects and ask themselves a few questions.  Was the last project with ComNet a success?  Did ComNet provide solutions to the problems that arose?  Was ComNet 100% committed to me?  Did ComNet display integrity?  Was my project as important and as urgent to ComNet as it was to me?  Were disputes handled in a professional manner?  Was my contact at ComNet pleasant and supportive or were they argumentative and frustrated?  Was my last experience with ComNet a good one or was it a struggle?  If the answers aren’t positive then it means that confidence has eroded and that there is now an opportunity for the competition.  You can rest assured that our competitors are out there making every conceivable promise as to how they will do it better than us.  Obviously customer service isn’t the only issue that we deal with at ComNet.  If you’ve been with the company any time at all, you know that each and every day we focus on maximizing profitability and cash flow.  We deal with risk management and employee relations and any number of associated problems that come with operating an on-going business.  We know that all these issues are critical to ComNet’s survival.  The fundamental point is that these are OUR issues and the customer probably doesn’t care about any of them.  As important as they are to us, our customer won’t vote for us because we are profitable or because we have cash in the bank.  The customer will come back to us because of what is important to them and that is, and always will be, customer service.  To rephrase a famous saying, “It’s all about the customer service”.

 *******************************************************************************

July 2004

Congratulations to everyone for making the first half of 2004 one of the best periods in the history of ComNet.  I want to sincerely thank everyone for their hard work and effort in making it happen.  I believe that there is reason to be cautiously optimistic that the economy is at the beginning of a growth cycle.  We can only hope that external events won't derail the economic momentum that is building up.  This growth cycle will present ComNet with many new opportunities.  However, these opportunities will require that ComNet adapt to a rapidly changing industry and the challenge to everyone will be to effectively manage these changes.  ComNet has always faced changes in the industry, but in the last year we have seen the pace of change accelerate.    ComNet has been asked to do things faster than every before.  ComNet has been asked to perform different tasks than ever before.   One of the biggest changes that we will face is the continued acceptance of wireless solutions by our customers.  Just think of the impact to ComNet if our customers decide to run one less cable per workstation because they migrate toward a wireless solution.   This is not necessarily bad news.   The opportunities will still be there for ComNet, they may just be different.      Change affects everyone within an organization.  Senior management has to anticipate the changes that will be taking place.  Operations managers and project managers have to develop the processes to effectively manage new functions.  CSR's and technicians may need to learn new skills.  All of this seems overwhelming if we become focused on the details.  However, ComNet is a service company, and if we step back, it becomes clear that the challenges that we will face are only different kinds of services.  The specific details may change, but the principles remain the same; superior customer service, the best quality in the industry and solid business practices.        Change can be one of the most traumatic things that an individual or an organization will be faced with.  Log onto the internet and do a search for change.  You will be amazed at the number of people who have written books on managing change or have established themselves as change consultants.  Fortune 500 companies allocate thousands of people to simply manage change.  If you are married, just think back to the first couple of years, or think about raising young children.  There are lots of rewards that can come with change, but there are times when it is just plain tough.  This is likely to be what ComNet will face.  If we perform well through the changes ahead, there will be rewards, but there will be lots of times when it will be tough going.  I believe that ComNet is unique in its ability to perform the largest of projects while retaining the flexibility to adapt to different requirements.  I believe in the people that make up ComNet and I believe that we are absolutely the best at what we do.  However, our ability to remain the best will depend upon our ability to effectively manage change.  Otherwise, we will go the way of the slide rule, the betamax video recorder and blonde jokes.  Sorry, my mistake, blonde jokes will live forever!!

*******************************************************************************  

January, 2004

The recent recession has been the most difficult period that the telecommunications industry has ever experienced. While many of our competitors and customers didn't weather the economic hardship, ComNet not only survived, we excelled. As a result of dependable management and sound principles, ComNet emerged from the recession a much stronger company. Everyone at ComNet can be proud of their accomplishments over the last couple years.   ComNet's basic principles of service, honesty and integrity in our relationships with our customers has served the Company well for 20 years. Our employees believe in these principles, and our success is founded on their commitment and dedication to this formula for excellence. You won't find this written down anywhere because it doesn't need to be. This is simply what ComNet is.   We are a part of one of the most dynamic and demanding industries in history. I am excited about the challenges that lie ahead, since they represent opportunities for a company that demonstrates a commitment to service and a willingness to bring every ounce of added value possible to a customer. This company has been ComNet for over 20 years, and it will continue to be ComNet as we move into the future.

Alex Merrifield

President