Arcus Innovation Leaders Series – Mr. Anthony Lacavera, CEO, Globalive Communications Corp.
Globalive’s view on the Innovation Imperative: An interview with Mr. Anthony Lacavera, CEO, Globalive Communications Corp. Mr. Lacavera says its critical for companies to be prepared to grow in a profitable and sustainable way. Globalive’s strength has been low management turnover and a strong, cohesive and consistent strategy.
This principle applies to every company, but it’s especially true for a high-tech company like Globalive, which has taken a different approach for consumer engagement. Wirelesssoapbox.com is a collaborative approach to build our platform and service offering, a first in Canada. They have opened themselves up to all comments including negative ones. In today’s world of social media it is more important than ever to be open to collaboration with customers – ultimately people want and expect to be a part of the conversation.
What does it take to innovate? The majority of executives say it involves achieving technological leadership, global presence and a comprehensive portfolio of patents that will enable the company to help define major trends regarding products, systems and services, and to offering its customers important added value. They say such steps reduce costs, increase sales and achieve higher earnings. But how does one come up with new solutions, and can innovations really be part of a strategy plan? Arcus’ multi-industry survey of senior executives found that of all the challenges companies face in this area, the biggest challenge is finding ways to create a “climate for innovation”.
As Arcus research indicates, doing so means that you need to be surrounded by highly talented people. It also means finding a way to transmit your passion to them, so they will buy into your vision of the future, perform at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision. No surprise, then, that the topic of innovation has been gaining ground as CEOs seek to incorporate concepts like “a culture of innovation” into their assessments of a company’s long-term value.
Globalive’s view on the future of wireless: An interview with Anthony Lacavera, Chairman and CEO of Globalive Communications Corp.
Arcus: What have been Globalive’s key drivers of success?
Mr. Lacavera: Founded in 1998, Globalive has a strong balance sheet to go with its record of accomplishment of sustained, profitable growth and innovation. Over the course of its brief history, Globalive introduced a complete suite of telecommunications services that range from long distance services, to carrier clearinghouse solutions, to high-speed internet, to mobile phone services, to VoIP (Voice over Internet Protocol) solutions.
Globalive has been very disciplined with its approach; the company has taken a long-term view. Our biggest advantage is that we are prepared to grow in a profitable, sustainable way. Our strength has been low management turnover and a strong, cohesive and consistent strategy. We believe that the drivers of our success have been the right team and a consistent and disciplined approach.
Arcus: How has the wireless market changed over the past decade?
Mr. Lacavera: The industry has changed radically over the past decade. The wireless market is the largest sector of the telecommunications industry with revenues of about $15 billion. It is growing at about 15% a year. Wireless revenues accounted for over a third of all revenues in the sector. Canada has over 20 million wireless subscribers, that’s growing at about 8% a year.
Canada lags the developed world in cell phone adoption. Only about 60 per cent of Canadians subscribe to a wireless service. Canada is the only developed nation in the world with an adoption rate lower than 80 per cent. One of the biggest challenges we face is a market dominated by four large phone and cable companies.
Arcus: How has Globalive adapted to these changes?
Mr. Lacavera: We are very focused on continuing to build and enhance our corporate culture and ensuring our people have a similar attitude and approach to problems and are willing to learn from others. We have taken a disciplined approach by concentrating on market opportunities that may be unique and niche. For example, teleconferencing is a $100M business in Canada. Globalive was able to compete effectively in the market because we offered value added services to customers where there were gaps.
Our approach has been to break down the market into smaller segments and identify growth opportunities. We have focused on telecom markets that are not attractive to others in the sector. Our unique approach to wireless is an example. We are engaging Canadians in a dialogue.
We want to know what they would like to see in the next great wireless company in Canada. We have created a website called wirelesssoapbox.com to facilitate this dialogue. Our service offering will be built after talking to Canadian consumers. We feel this has not been done before in the sector.
Arcus: Could you tell us how Globalive innovates?
The telecommunications market is quite large. We look at niche markets and ask ourselves what technologies can be developed and deployed to enhance an integrated solution, such as calling cards, teleconferencing and hosted next generation solutions. The strategy is to combine our internal software and integrated platforms where we have a real competitive advantage. These could be areas where incumbents are not competing and our service offers differentiating features and benefits at a reduced cost.
Arcus: Is there a type of organization that has an edge when it comes to fostering innovation?
Mr. Lacavera: We have a three-pronged approach with products, customers and our management. We can compete effectively by finding unique opportunities. This allows us to stay focused. Customer expectations have risen dramatically over the past ten years. Consumers are more educated and better informed about products, services, and purchasing decisions because they have access to information on the internet.
We find consumers have often already assessed our technologies. That is a positive for us to control our sales cycle. There is also more price competition. Businesses understand broader macro technology trends. A negative has been that customers now have a much higher expectation, beyond their requirements. They end up broadening their requirements beyond their business needs.
For example, we market telecom services to the hospitality sector. We see two kinds of customers- those that focus on their core business and those that are interested in making telecom services a new revenue stream. The first approach is focused on telecommunications solutions that are truly cost effective. The second approach requires the client to operate beyond their core business. The hospitality sector is unlikely to have the same level of expertise as telecom companies in this area. There needs to be a focus on their core expertise. A consultative approach to provide solutions to these clients has been more productive.
Arcus: How do you engage your customers?
Mr. Lacavera: Wirelesssoapbox.com is a collaborative approach to build our platform and service offering, a first in Canada. We have taken a different approach for consumer engagement. We are opening ourselves up to all comments including negative ones. In today’s world of social media it is more important than ever to be open to collaboration with customers – ultimately people want and expect to be a part of the conversation.
Arcus: How will the market change in these challenging economic conditions?
Mr. Lacavera: The market is going to soften overall because a significant portion of the market is consumer discretionary spending. As consumers watch their budgets more closely, growth is likely to slow down. This is going to drive competition and will force innovation for all players. We have a head start in our collaborative approach with customers. In the long term, we see a significant opportunity with our business plan. The plan involves us getting 5% market share in the first three years.
We are not talking about revolutionizing the market. We see 10-15% growth in the market. Our presence is going to be felt a lot more broadly than that. We are seeing a repositioning and repricing from other players in anticipation of a more competitive market. We are having an impact even before we have entered the market. In the longer term, the market is likely to be saturated with phones, appliances, RFID, tracking products and mobile banking services.
The new vectors of growth will be service oriented. The focus is likely to be on data. Canadian data costs are likely to decline with some short-term turmoil as new entrants come in. With the innovation of new entrants, we are likely to evolve into a more developed wireless market, closer to other G8 countries.
I would like CEOs to look at our collaborative approach and share their feedback on challenges they face in their organizations. We would appreciate your feedback through Arcus to broaden our dialogue with other industries.