New CLECs: How To Avoid Problems

Competitive local exchange carriers (CLECs) are the new kids in town, trying to hit the incumbent local exchange carriers (ILEC) where it hurts most: the pocketbook.

However, newcomers must face a task that the most old-timers have long mastered: creating and grooming in-house operational groups such as such as finance, sales, service and information technology (IT).  All new companies must do this well before they can become successful.

One significant and difficult area when setting up new operational groups is hiring the right people to manage them.  One common approach is hiring employees from established companies. The thinking typically is that they have experience and they must know what they're doing.

However, unless they previously have participated in a start-up, their experience may not help them build a new organization in a start-up.  In many cases, the old method of doing business does not translate to a start-up environment.

That was the problem in the following example. In this case, the wrong hire resulted in months of corrective action and it cost the company millions in lost revenue and lost productivity.

The position in question was the director of billing for of a medium-sized, relatively new CLEC. Initially, things seemed to be going well.  Then, however, sales personnel begin questioning their commission checks.  Soon, other problems became apparent.  For instance, customer service saw increased levels of calls about service delays and missed or inaccurate billing.

The new director of billing said the problem must be with how commissions were calculated.  He also said that customers didn't really have billing issues; they had provisioning issues.

The billing director previously was a senior manager of billing for an established telecommunications company.  He managed employees with many years of service to the same billing organization. They knew their roles well, had layers of standard operating procedures and seldom had to deal with new applications.

Now the director was heading a CLEC billing organization. An independent review of the billing organization found some major problems that, perhaps, wouldn't have been problems at the established company.  Customer orders consisted of paper folders, which were scattered throughout the organization.  There were no records of when orders were delivered from provisioning or when order entry was completed by billing. 

Incredibly, the director’s own billing review group reported a metric that new customer invoices had a 45 percent error rate, a problem that had existed for at least five months.  The number of error calls was skyrocketing with no attempt to address this problem.  The billing director, however, still claimed there was no problem.

But there were, indeed, more problems still.  Quality assurance reviews were performed on a second shift without supervision.  The department review found that most of the personnel performing the reviews couldn’t enter an order themselves much less verify billing correctness.

How can a new CLEC avoid these problems?  First, don't focus on a job candidate's previous experience at an existing company.  Instead, look for a person who is a doer, a person who enjoys getting his or her hands dirty.

How do you find this type of person? One way is to ask questions that force the candidate to think about what they might do in a given situation. Prepare in advance several problem-solving scenarios.  Some of the scenarios should relate to the candidate's experience.  Other scenarios, however, may have little to do with the candidate’s experience.  In both cases, look for creativity and the ability to embrace a challenge. 

Second, set measurable goals for employees and make sure you monitor results.  In the example we used, the manager resisted metrics to measure performance.  Such measures were done in the organization he came from.

As a new business in a highly competitive environment, you often are pushed to hire people that look good on paper and sound good when interviewing.  However, you'll find yourself in trouble unless they can perform your company's specific tasks well. 

The problem is that, initially, sometimes things look like they're working the way they should.  You won't know that they aren't until it's too late.  To avoid such problems, you must make diligent efforts to hire the right people and to assign them measurable objectives.

Jim Marsh is a senior consultant for The Management Network Group, a telecom consulting organization.  Jim has worked in telecom for 15 years and is an expert in revenue assurance, risk management and fraud. Jim speaks and writes on improving operational systems and functions to improve bottom lines.