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Verwaayen, Ben 1952–

Ben Verwaayen
1952

Chief executive officer, BT Group

Nationality: Dutch.

Born: February 1952, in The Netherlands.

Education: Utrecht University, MS.

Family: Married (wife's name unknown); children: two.

Career: ITT Nederland, 19751983, manager of public relations; 19831988, executive vice president and director of operations; Koninklijke PTT Nederland, 19881997, president and managing director of PTT Telecom; Lucent Technologies, 19971999, executive vice president of international operations; 1999, chief operating officer; 19992001, vice chairman of the management board; BT Group, 2002, CEO.

Address: BT Group, BT Centre, 81 Newgate Street, London EC1A 7AJ, United Kingdom; http://www.btplc.com.

In early 2002 Bernardus "Ben" Verwaayen, well known as Ben, became chief executive officer of BT Group, which was known as British Telecom prior to a November 2001 name change. Before joining BT, Verwaayen recorded a long history of employment in the telecommunications industry. At BT he faced one of his greatest challenges as a business leader: resurrecting a venerable European telecommunications company. While always striving to maintain a view of the bigger picture, Verwaayen remained a modest business executive with an open-door policy.

BEGINNING YEARS IN THE TELECOMMUNICATIONS INDUSTRY

Verwaayen was born and raised in the Netherlands. He received a master's degree in law and politics from Utrecht University; in 1975 he began his career with ITT Nederland. There he served in a variety of management positions, becoming director of operations and executive vice president by the time he left in 1988. He then became president and managing director at PTT Telecom, a division of Koninklijke PTT Nederland

(KPN), the national telecommunications company of the Netherlands. Verwaayen remained with PTT Telecom until 1997, when he left for the United States to become executive vice president of international operations for Lucent Technologies. He was a cofounder of Unisource, an alliance of telecom companies that eventually failed.

Lucent Technologies, spun off from AT&T in 1996, was one of the largest suppliers of hardware and software to the telecommunications industry. Due primarily to the explosion of the Internet, Lucent had a remarkable rise in the business worldas, coincidentally, did Verwaayen. The massive changes in the telecommunications industry involved shifts from the support of traditional phone and fax businesses to the support of the burgeoning need for the transmission of data, specifically networked computer data, across the world. Telecommunications companies put the necessary infrastructure in place and expanded and innovated the associated technology. As Verwaayen told the interviewer Martyn Warwick of Communications International, "Basically, all the distribution channels and methods of working that have been built up during the past two hundred years are about to become redundant. Broadband access is on the way and it will be all-important. Broadband will enable all the new technologies, services and applications that will drive e-business, e-commerce, in fact, e-everything" (November 1999).

Verwaayen understood that the price-conscious customer would always look for value, even when purchasing new technology. Responding to the interviewer Ian Grayson in the Australian, he remarked that one of Lucent's strengths was its ability to "incorporate new technology into existing networks without having to throw away existing investments" (October 13, 1998).

Lucent possessed the well-respected research and development facility Bell Labswhere Nobel Prize winners were employedwhich would lead the company into the future. In speaking to Warwick, Verwaayen described Bell Labs as "a real jewel in our crown. R&D is at the epicenter of Lucent's ability to innovate. I cannot emphasize enough how important that is" (November 1999). Verwaayen related that Lucent spent $4 million a year on R&D at that time he felt that the key to a company's success was its ability to innovate in addition to providing top-notch customer service. He noted in another interview, however, that it was difficult to expect Nobel Prize winners to be concerned with such business-centered concepts as the speed with which products are brought to market.

ON TO BT

On February 1, 2001, Verwaayen was installed as the chief executive of BT, formerly British Telecom. He agreed to a two-year contract wherein he would make approximately $1 million annually, with bonuses based on performance. In the few years prior to Verwaayen's joining BT the company had aggressively pursued new ventures, but those forays had brought the company large amounts of debt. The previous CEO had begun to rein in the company's expansion; the analyst Andrew Darley remarked in Communications Today, "Verwaayen has come in at a time when he can make an okay company better instead of an awful company better right away. He has a hell of a challenge to make sure the company keeps growing" (December 13, 2001). Darley commented on Verwaayen's impressive knowledge of broadband and on his credentialsas well as on his anonymity: "The problem is that he is from God knows where and he could take the company God knows where. He sounds like the right type of guy" (December 13, 2001). The BT chair Sir Christopher Bland told London's Daily Star, "Ben was our unanimous first choice by some margin. He has a good background in culture change and had to make some tough decisions while at Lucent" (December 13, 2001).

A little over a year after his appointment, in April 2002, Verwaayen announced layoffs of 17 percent of the company's workforce over three years as well as the goal of eliminating more than $14 billion in debt over the same time period. Verwaayen put a stop to BT's expansion, pulling the company's focus back to its core business: serving customers through land lines in Great Britain. BT spun off its mobile-phone unit, mmO2, and withdrew from ventures and alliances in foreign markets. Verwaayen especially strove to highlight the need for good serviceespecially to provide the right service in new ways. Emphasizing his vision for high-speed Internet access, he set forth the goal for BT to have five million new broadband customers by 2006. To assist in the attainment of this goal, BT cut prices for broadband products; analysts liked what Verwaayen was doing. A contributor to the Economist wrote, "BT's moves have been welcomed as sensible, responsible, and pragmatic, rather than revolutionary" (April 13, 2002).

Verwaayen did not completely abandon the possibility of BT's forging ventures and partnerships in the future; he did cut those that had been failing and would thenceforth wait for alliances that made sense. By April 2004 BT had already met its goal of establishing two million wholesale broadband connections over the course of the year. Also in 2004 BT and Hewlett Packard announced a global technology alliance that would allow businesses to obtain information technology and phone services together as a bundled package. With the land-line and customer-service business core back to full strength, as well as through broadband access and well-crafted, targeted partnerships, Verwaayen and BT aimed to attract new clients and construct a new business model for the company.

VERWAAYEN STAYS CONNECTED TO HIS STAFF AND CUSTOMERS

Verwaayen maintained close relations with his employees by traveling to all of the company's offices in order to preach the goals and vision of BT. Richard Tomlinson wrote in Fortune International, "Verwaayen has his own Web site, where he answers an average of two hundred e-mails a day from staff" (October 14, 2002). When attending business presentations on new products and services he was quick to ask about public response, highlighting his pro-customer service mentality.

See also entry on BT Group plc in International Directory of Company Histories.

sources for further information

Donegan, Michelle, "BT Chief: No Network Sale, but Yes to Global Partners," Communications Week International, March 18, 2002, p. 1.

Grayson, Ian, "The World According to Ben Verwaayen," Australian, October 13, 1998, p. 56.

Pringle, Rodney L., "BT Selects Verwaayen as New CEO," Communications Today, December 13, 2001.

Schenker, Jennifer L., "BT Lost It, and We Have to Get It Back," Time International, March 18, 2002, p. TD10.

"Seven Million Pounds Sterling Bill for Ben," Daily Star (London), December 13, 2001, p. 40.

Tomlinson, Richard, "BT, Phone Home," Fortune International (Asia Edition), October 14, 2002, p. 82.

"The Verwaayen Ahead: BT," Economist, April 13, 2002.

Warwick, Martyn, "E Is for Everything," Communications International, November 1999, p. 84.

Deborah Kondek

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