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Capellas Lays Out 100 Day Plan for WorldCom

Michael Capellas, the new chairman and CEO of scandal-ridden telecom WorldCom, charged out of the gates Tuesday with a new 100 day plan aimed at reinvigorating the giant and laying the foundation for a restructuring intended to bring the company back from the largest bankruptcy in U.S. history.

"We are going to define our future over the next 100 days and we are going to do it with an outrageous, outrageous sense of urgency," Capellas said in an address to WorldCom's 60,000 employees that was broadcast worldwide over the Internet.

He added," In 100 days we need to act with an outrageous sense of urgency. We've got to do what we say we're going to do, and we've got to do it quickly. Within 100 days from today, we will file a plan of reorganization and we will climb our way out of bankruptcy."

The plan centers around driving profitable sales, reducing structural costs, and rebuilding the organization. Capellas outlined specific goals around each of the key points, and vowed that WorldCom will pony up deliverables every 15 days, including a new top level organization with new appointments, new products for mass and business markets, focused sales targets for mass and business markets, greater focus on small and medium business (SMB), major IT deliverables to support sales, restructuring targets, customer advocacy programs and employee programs.

He started with the new top level leadership structure, which he laid out as part of the presentation. The new executives are:

  • Cindy K. Andreotti, president, Business Markets
  • Seth Blumenfeld, president, WorldCom International
  • Fred Briggs, president, Operations and Technology
  • Daniel Casaccia, executive vice president, Human Resources
  • Jonathan Crane, executive vice president, Strategy and Marketing
  • Victoria Harker, acting chief financial officer (while the search is underway)
  • Wayne Huyard, president, MCI Mass Markets
  • Michael Salsbury, executive vice president and general counsel
  • Grace Chen Trent, chief of staff.

"It's a great team," Capellas said, adding, "Our management team has the experience, vision and knowledge to lead the company forward. Today we have a fresh start; we have a plan; and we have our priorities straight -- customers first, customers second, customers third."

With the first deliverable, a new top level organization, out the door Tuesday, Capellas said the next deliverable will be a complete cost structure plan which will be on the table on Feb. 1. On Feb. 19, he promised to roll out a new compensation plan, with the Special Committee Report (outlining a series of recommendations for the company's restructuring) slated to follow.

Capellas said the company's three-year business plan will follow on March 1. "This has the strategy of who we are and who we're going to be," he said. "This is the business plan which will then get rolled into our plan of reorganization."

WorldCom will rollout enhancements to Neighborhood and relaunch Connection on March 15, Capellas said, followed by completion of its core cost reduction activities by March 31. It will file its plan of reorganization on April 15.

However, Capellas noted that there is no silver bullet for getting the company back on track, and it will require some serious work to make it happen. Part of that work will be the aggressive rebuilding of its finance team, which he said will include aggressive recruiting, investment in systems and building a strong internal audit team.

Additionally, Capellas said a fundamental pillar of the company's reemergence will be a focus on developing key new products, a focus that plays into what he has turned into the company's mantra: "sell more." He intends to focus on converging voice and data platforms, Voice Over IP (VoIP), and IP VPNs.

"We should be the leader on the convergence of voice and data platforms," he said. "We have a lot of great intellectual property. We just have to get it to market."

As part of the company's renewed focus on new products, Capellas said WorldCom will issue a whole series of new product announcements beginning in the next few days, including the launch of a new long distance product portfolio, new 1010 and DSL products, and a new international rate structure.

Capellas also plans to strongly push the company's Connection service, a network-based IP communications service which promises to consolidate local and long distance services over customers' existing WorldCom data network, simplify network management, and leverage existing data investments with tailored solutions for voice and data requirements. With Connection, customers can attach every device to one common infrastructure -- allowing, for instance, a customer to designate whether a call should go to an office phone, mobile phone or PC, and even granting the ability to have a call roll from one device to the next after a designated number of rings. If the call is not picked up, it goes into a common voicemail box shared by all the devices.

"Anywhere, anytime, I can choose where I can be found and how I connect," Capellas said. "This is the future of the IP backbone."

WorldCom will make sure to get the word on Connection out to enterprise customers, but it will also be reaching out to the SMB market, a space that Capellas said WorldCom intends to own.

"In all of IT, this is in fact the largest market," he said, noting that SMB represents at $25 billion opportunity for WorldCom, where driving a 1 percent increase would mean a recognition of $250 million. "We definitely have the products, the people, the service performance. This should be our space."

Capellas also committed to advancing WorldCom's presence in the government and education markets.

As part of its drive to retain and expand its customer base, he said WorldCom will launch advocacy programs for customers, including a Council of CIOs across industries, with five verticals, each led by a different member of WorldCom's management team. The programs will also include an Executive Sponsorship program which will give WorldCom's 50 largest accounts executive touch points with C-level relationship management.

On the consumer side, Capellas said WorldCom will drive forward with increased customer service initiatives, including extending its hours of operation and guaranteeing two hour response time for e-mail support queries.

Also, as he vowed when he took the mantle of leadership at the company, WorldCom has formed an ethics office and created an enhanced code of ethics with a zero tolerance policy, financial reporting and ethics training, and an ethics commitment to all employees.

"We must serve our customers and keep their trust," he said. "We must win new customers and retain their trust. We can do it. We will win in the marketplace."

"In 100 days, we will celebrate," he said.