Cases Corporate Excellence During a merger process, where the conflict of corporate cultures may threaten the continuity of the new company, Sprint Nextel aims to involve its stakeholders in managing the brand and to turn them into promoters. Sprint Nextel experienced rapid growth after implementing this strategy. Thanks to clever brand and reputation management the company has learned to overcome initial threats of the conflict of two cultures during the merger. When this phase was completed, Sprint Nextel became one of the largest U.S. telecommunication companies. This success is due to the three changes in the management model: emphasis on reputation management and creation of long-term value; change of focus towards innovation and honesty; and, finally, reputation management via determining the circle of trust with its stakeholders.

1. Cases
Strategy Papers
C08/2011
Reputation
Sprint Nextel: The
management of the brand
for the benefit of reputation
and corporate culture
In a merger case, many companies find the continuity of the new company
difficult due to the clash between corporate cultures. This is not the case of Sprint
Nextel, who has known how to manage its brand by involving stakeholders and
turning them into developers.
Sprint Nextel Corporation is a telecommunica- this point, only the DirCom and the CEO firmly
tions company who owns the third largest wireless believe in the value of reputation, while the rest
telecommunication network in the United States. of the executive team is still somewhat sceptical.
In the American market, it places itself just behind The Communications Director believes that the
other companies such as Verizon Wireless y AT&T hardest thing is for the directors from the different
Mobility. It provides mobile phone services, areas to understand that what happens in each
broadband Internet connections, and private com- of the departments affects the rest, as they are all
munications networks. One of their main clients interconnected; and this as a whole has an impact on
is the American government. It currently has 49 reputation. Therefore, multifunctional committees
millions clients, who back up the success of the have not yet been created, as they are still not
company and its good reputation. backed by all of the areas in the company. On the
other hand, in the United States Sprint Nextel is
Relating to its management, Sprint Nextel defines perceived as a leader company in sustainability. The
itself as “The Now Network”. Its CEO believes Communications Director considers that CSR is a
in corporate reputation and he boosts it by using driver for clients.
RepTrak as an investigation tool and a key
performance indicator. The challenge faced by the Despite being the third largest telecommunications
Communications Director is trying to convince company in the United States, the early years of
the rest of directors that reputation management Sprint Nextel were not the best. The company
will bring long-term benefits. This means that, at suffered from initial strains caused by the clash of
Document created by Corporate Excellence ñ Centre for Reputation Leadership quoting from, among other sources, the interventions
on the Sprint Nextel case in the 15th International Conference in New Orleans on Corporate Reputation, Brand, Identity and
Competitiveness, on May 2011.

2. Sprint Nextel: The two different corporate cultures, as a consequence Simplicity: Strategic management
management of the of the merger between two companies: Sprint and
brand for the benefit
of Sprint Nextel
of reputation and Nextel. These conflicts were even seen outside the
corporate culture company, remaining visible in their poor client Transparency and Openness:
Internal
support. Actions caused serious damage to the • Engagement to employees through
Management transparency.
brand, creating a competitive situation which was • Networking of all employees.
• Involvement of employees to openly
very unpleasant for the company. collaborate on improving the
experiences of the brand.
Beginnings and merger problems Sprint Nextel:
Sprint Nextel was created in 2008, as a consequence Simplicity
of the acquisition of Nextel Corporation by Sprint Innovation:
• Vanguard technology:
Corporation in 2005. During these years, the - First to introduce in market 4G
technology
executive team focused on trying to resolve the External • Improved product offerings:
internal problems which come up in every merger: Management - Terminals and Applications
• Better communication:
homogenisation of corporative cultures. The - Advocacy of the circles of trust.
integration project caused a huge impact through bad
Source: Sprint Nextel, 2011.
client support, and this resulted in the company’s lost
of both competitiveness and consumers. The brand
was seriously affected. Their degree of competition the idea of transparency. Thanks to it all, the
fell by 10 points bellow the average, affected by the company has managed to interconnect all of their
word of mouth, the satisfaction of employees and employees who now can exchange perspectives,
their level of involvement, and their position in the opinions, and points of view. This, together with
RepTrak Pulse. the freedom they are given to complain openly,
without censorship, about the leadership, with the
Simplicity as the key to management aim of improving proactively. All of these points
In this context, the CEO thought that the results of have brought good results to the company, who has
the brand’s construction and of its reputation could managed to compromise and include its employees
only be expected in the long-term. This is why he in the mission and vision of the company. As a
decided to restructure the company from the inside consequence, Sprint Nextel has given the green
to the outside by improving services, and introducing light for their employees to openly cooperate with
financial and terminal portfolio’s improvements; all the brand. Employees are constantly in contact
of it based in the idea of simplicity. with clients through the Call Center services and
through sales points. This means that they are the
thermometer and the connection between the
“The results of the brand’s company and its consumers. The company has
construction and of its managed to involve them both in the mission and
vision of the company to the extent of turning them
reputation could only be into brand ambassadors.
expected in the long-term”
Confidence circles
In order to do so, in all of the speeches aimed at the Reputation works in the same way as confidence
stakeholders of the company, the CEO has always circles. We bring to the light the well-known
included the idea of long-term, especially pointing image of throwing a stone in the water. When
out the value of simplicity through frankness we do this, we can see how concentric circles are
and innovation both internally (employees) and formed from the initial point where the stone
externally (to clients). falls and how they expand. From this theory we
consider that those who are closest to the reality
Thanks to this concept of simplicity, one of the of the company are the own employees. Employees
aspects in which the company has decided to focus are the ones who really know the reason for which
on is innovation as the central axis of its internal the organisation exists, they know what and why
and external management. This has been reflected we do what we do.
in their actions, which have allowed them to be in
the forefront of world telecommunications within In this way, the first confidence circle which a
their category (being the first ones to have brought company must build is with those who are closest
4G technology to the American market) vis-à-vis to it: employees. On this basis, it can establish
their customers. further circles with other stakeholders.
Another approach related to simplicity which the In this sense, Sprint Nextel has defined its
company has known how to deal with internally is stakeholders in confidence circles by positioning
frankness. They have managed to engage employees employees as a top priority, followed by clients, and
by being honest with them, and this has enabled lastly non clients of the company.
Cases 2

3. Sprint Nextel: The 1. In its first confidence circle, the company Circles of trust
management of the propelled its employees into advocacy (as a
brand for the benefit
of reputation and recommendation of the company) through • Training employees on social
corporate culture social media. The idea is based on the belief networks (Facebook and
Twitter).
that if every employer has approximately 100 • Promotion of advocacy in the
contacts of their employees
contacts in their social networks, and the within their social networks.
company has 100 employees and each one of • Identification and selection of
them belongs to these social networks, there Sprint
clients who recognize the good
service of the company.
would be an impact of 100 for every 100 Nextel • Encourage the recommendations
of the brand in social networks
people who would receive a recommendation in all contacts within their social
Employees networks.
from the own employees. And if these 10,000
Clients
people receive this recommendation and they • Advocacy confidence circles
No customers 1 and 2.
themselves have another 100 contacts to who • Communication campaigns,
advertising and promotion.
they can recommend the brand, there would
be an impact of 10,000 for every 100, and so
on. This leverage factor can have a great effect Source: Sprint Nextel, 2011.
on a small company with no more than 100
employees, but a much greater one in medium
and large companies. Conclusions
Sprint Nextel has experienced an important growth
2. The second confidence circle has been managed since this new strategy was implemented. The
in the same way though it is not aimed at all company has known how to deal with the initial
users. The company identified those clients strains caused by the clash of its two cultures thanks
who rate their quality services as very good, and to the management of the brand and its reputation.
offered them the possibility of becoming brand Once this stage was achieved, the company has
developers in social networks. By doing this they become one of the largest telecommunication
have managed both recommendations from the undertakings in the United States. All of this is due
brand towards consumers or final clients, but also to three changes in its management model: their
from consumers towards the company. This way, call for reputation management and its creation as a
social networks act as a route for fresh ideas. long-term value, their change of approach towards
innovation, and lastly the good management of
3. With this scheme, clients become brand confidence circles with stakeholders. They have all
ambassadors towards the non clients, which are enabled employees to do advocacy with clients, and
those positioned in the third confidence circle. clients to do the same with non clients.
This builds up more credibility than the one
which would be created by the company in the
first place through its own conventional media,
publicity or promotions.
“Reputation works in the
same way as confidence
circles, and it is built from
the inside to the outside”
The construction of a strong brand and its reputation
in managed from the inside to the outside. This
management scheme starts with the creation of
confidence circles with stakeholders, being them in
this case employees, clients and non clients, with
the aim of turning them into brand developers.
In order to measure those actions, Sprint Nextel
uses mainly two monitors: RepTrak, as a control
panel, and Net Promotor Score, to analyse the
index of propensity of clients and employees to
recommend the brand. Both of them, along with
the satisfaction data of clients, and the commitment
data of employees are the tools used by the CEO
when taking strategic decisions in the company.
Cases 3

4. ©2011 Corporate Excellence - Centre for Reputation Leadership
Fundación empresarial creada por grandes empresas para profesionalizar la gestión de los activos intangibles y contribuir al desarrollo de
marcas fuertes, con buena reputación y capaces de competir en los mercados globales. Su misión es la de ser el motor que lidere y consolide
la gestión profesional de la reputación como recurso estratégico que guía y construye valor para las empresas en todo el mundo.
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