Transforming for Success

by Alan Masarek, Vonage CEO

But none of this is easy. None of it happens by accident. We are making it happen by being receptive and open to change and meeting these changes head on by transforming who we are and how we do business.

Transformation is the key to our success as a company. It is the key to my own success personally. But how do we, as leaders, TRANSFORM ourselves professionally as well as our companies?

Recently, I was privileged to address a roomful of entrepreneurs at an annual event celebrating the top 100 fastest growing companies. And this theme of transformation kept resurfacing as the perfect illustration of how each of these 100 business professionals were able to sit at this exclusive table. Whether personally or professionally - and each road is different - they were able to grow and change, finding the right path, and ultimately, growing their business.

But what I emphasized to this group of very successful individuals is that they weren’t done. If change and transformation got them this far, what happens next? What if they begin to get set in their ways? What happens if they start to resist change, to resist transforming? It’s easy to say, “Hey - I’ve made some money. I’m the boss. The company is operating well. So …. Life is good.”

Past success doesn’t guarantee your future results. Given how our world is changing at an ever more breathless pace, the need for transformation is greater than ever. If a successful business fails to adequately change when the needs of the customer, the business or the market demand it, growth will stall and fortunes will reverse.

While writing this blog, I started reflecting on my own career path and realized my entire career was one transformation after another - except when it wasn’t - and those were the times that I failed.

For most of my career, I was an entrepreneur. I co-founded and led three startups in three different industries. The first was an early success that we IPO’d only two years after founding, but then neglected to properly transform and later failed. The second failed in just two short years.

The third was Quickoffice, which we successfully sold to Google in 2012. But, very importantly, the Quickoffice we sold in 2012 looked nothing like the company we founded ten years earlier. It had radically transformed along the way. Had we not radically transformed, Quickoffice would have failed like my start up number two.

My entrepreneurial experiences led me to my current role as CEO of Vonage. Here again, I’ve professionally transformed. Rather than running a startup with tens of millions in revenue, Vonage is a NYSE public company, with nearly 2,300 employees, 20 offices around the world, and more than a billion dollars in revenue.

Almost 20 years ago, Vonage commercialized a new voice technology called VoIP, or Voice over Internet Protocol. Using VoIP technology, Vonage transformed the home phone industry and grew incredibly fast. At its peak in 2008, Vonage had almost three million homes using its VoIP service. However, when I was recruited as CEO from Google in 2014, Vonage’s revenues were in their 6th consecutive year of decline. WE HAD TO TRANSFORM.

Since that time, Vonage has transformed into a global leader in Business Cloud Communications.

A transformation of this magnitude is really hard, and importantly, the transformation path we set out five years ago has itself transformed along the way.

It is critical for businesses to embrace change, and this can be tough for some leaders because what worked in the past, which was likely a bright idea at the time, isn’t working now. This is tough enough when you’re running a small company where you can touch everything and actually implement the necessary changes.

When you’re running a larger company, transformation can be even harder because, in addition to having to change your own past decisions, you can’t touch everything to implement change. Your control is much more indirect, and large organizations often inadvertently try to prevent change. This is tough stuff - but to be successful, get ready for it!

There are three key Transformation Priorities we focus on at Vonage.

First is what we refer to as evolving to a Destination Place to Work.
This refers to the human elements of the company. Success depends on hiring and retaining great people who are up to the challenge.

When I got to Vonage, we were 1,000 people with a leadership team wedded to the home phone segment. Now, we’re 2,300 employees and a leader in Business Cloud Communications. And, even within business, we’ve changed from providing our communications solutions to small companies to now serving companies of any size, from 5 employees to 50,000 employees. In aggregate, we serve the cloud-based communications needs of more than 100,000 businesses.

This doesn’t happen without having great people focused forward! And, in order to have those great people, Vonage continues to transform into a highly sought after Destination Place to Work.

Our second Transformation Priority is Innovation and Technology
As a communications software platform, innovation is an ongoing transformational priority. Regardless of industry, you win over the long haul by building the best solution for your customers. We’ve architected and built an integrated suite of communications solutions that enable a truly unified communications experience, the purpose of which is to help drive your businesses’ own digital transformation.

Communications is at the core of a business’ digital transformation, and Vonage is using Cloud Communications to enable a better end-to-end communications experience between your customers and your employees.

And finally, we focus on Customer Centricity
This means that we are committed to being a world class customer service company. Every company says this, but almost all fail at it. The transformational concept we try to push is what we refer to as MVE, or Minimum Viable Experience.

By defining a minimum viable experience, we’re saying that, unless we can support you well, we’re not entitled to have you as our customer. Here’s a simple example.

Most companies approach marketing, sales and customer service in the following order: first, maximize marketing and sales dollars to add new customers as quickly as possible; then, spend as little as possible in customer service. We believe this formula is backwards. We believe that you first need to spend what’s necessary to delight and retain existing customers. In effect, we’re taking the notion of transformation and applying it to customer experience because we know that, if we create a truly customer centric company, and we couple it with great people delivering great solutions, we’re unbeatable.

This trilogy of great people, great customer solutions, and customer centricity applies EVERYWHERE.

Transformation is a journey with no finish line. To succeed, we must keep reinventing ourselves - reinventing our business, and reinventing our goals. We may fail, that’s true, but each step backward helps us learn how to take an even bigger step forward - maybe even pivot in a new direction. But always, forward.

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