Telecom industry: Product Development at Verizon - CXOTalk #702
We're discussing telecom, product development, and 5G with Nicki Palmer, Chief Product Development Officer at Verizon. The assets we have are amazing, so to be able to sit in this role and say, "Wow! I've got the best wireless network in the world. I've got a capital budget of $18 billion or so a year that continues with that network investment to ensure that it's the best. I've got fiber infrastructure that supplies it all and a wonderful, loyal customer base." You're looking at these assets and, in some ways, it's like a kid in a candy shop. Now, our job is, how do you connect them in
different and unique ways with the advent of new services and new technologies that just continue to come upon us to serve customers? Honestly, it just starts with our people. I will tell you that we truly have the best engineers and technologists in the business. Our credo at Verizon says that bigness is not our strength. Being big isn't, but being best is, and best starts with people. I'll go back just to the pandemic for a minute.
It's affected us all, certainly. It's hard to talk about it in positive terms, sometimes, without acknowledging the people that have fallen ill and been victim to COVID-19, all the people that have lost their jobs, and the dramatic impact it's had on society. During the pandemic, our first responsibility was to our employees (their safety and their health). Doing that and ensuring that we had a way of quick, open, and honest communication and just amazing programs to stay connected, that became really the number one priority. I'll tell you. I've never been prouder. I've been in the business and been with
this company for 31 years now. I've never been more proud than during this pandemic to see how our leadership, our CEO Hans, and our Chief Human Resources Officer Christy Pambianchi just rose to the challenge. We had daily meetings at noon every day to ensure rapid communication. I could go on and on, but here's what I will tell you. Forbes recognized Verizon as the number one pandemic response company in their list of top 100 companies. I think that speaks volumes. When I go to, "How do you manage all this?" it comes back to people, respecting people, ensuring their safety, communicating openly and honestly with them in times of dramatic uncertainty and, certainly, unprecedented times is job one.
How do you spend your time? Where is the bulk of your time spent? I actually am pretty diligent about keeping track of my time. I learned early in my career that it's the only thing that you can really control is how you spend your time. You've only got 24 hours in a day and there's always things to balance among home and all the things that we love to do and work. In my work life, I will tell you; people are sometimes surprised. I spend an inordinate amount of my time with the organization, with frontline. During this pandemic, it became quickly apparent that connecting with people, not just my direct reports, not just Hans and the senior team or my peers, but the frontline employees. For me, that's our engineers, that's our technologists, our coders. Understanding what they're dealing with
and how we can best support them became paramount. One of the things that I did is we instituted what we call Walk and Talks, which is a way, number one, to get out of the house and get the blood flowing with a little daytime walk, but I dedicate an hour a day. I usually do this three to four days a week—I try for five, but three to four is what usually happens—to do two walk-and-talks, so a half an hour and a half an hour. It's only open to frontline employees.
There is no agenda. We could talk about the weather. It's been amazing because some people will come in. They'll pitch me an idea for a new product. Others will come in with a list of 20 questions they want to know. Others want career advice. It's just a great way to get the pulse of the organization. Not the only way, but it's been great. That's just one way I spend my time, but that's an example of what I think about leadership and how that's a key piece that is often underrepresented, I think.
I also spend a lot of my time with suppliers, having a close relationship and understand with our key partners. We do none of this alone. We have the best network in the world, but that is also because we have great relationships with our suppliers, whether it's the large suppliers like Nokia or Ericsson or, on the device side, Apple or Samsung or others on the core network or on the product side where we have many smaller providers that play a key role. I spend a lot of time with them because being in sync is a key part of being agile in delivering products. It's a matter of employees, external with suppliers. I spend a good amount of time
advocating for Verizon and talking externally. I'm always happy to do that because it's such an easy story to tell. Of course, I spend my fair share of time in product reviews and ensuring that the team is executing on schedule and on budget with the quality that is required by our demanding customers. It's a bit of a mix. We have an interesting question that's come in from Twitter from Andrew Morawski who is a telecom industry leader. He was the president of Vodafone in the U.S. and now he's with Oracle. He asks, "As a tech leader owning such massive
responsibility, how do you balance organizational priorities between legacy products and new products and innovation?" It is very easy to get bogged down in the present. I think one thing that Verizon has been really very, very good at is our planning process, our technology planning process. We are always thinking ahead. We've been thinking about 5G for at least five years now, and probably much longer. We led with convening a cross-functional, cross-organizational, across the world group of people to talk about the standards for 5G, to set them, and really accelerated the 5G schedule by a few years. I think that's generally understood in the industry. That's just an example of how looking forward is so important because you have to fight.
At least, I have to fight the instinct, as an engineer, to want to go deep on today's problems. But we lead big organizations. We have excellent leaders, and some of those leaders are focused on today's problems or legacy technology and what's the best thing to do. How do we migrate customers to newer technology that has more functionality for them, but do it in a way that is clear to them and provides a glide path to get there? I will tell you. I spend most of my time on looking forward. It's also
my team's responsibility to be innovative. There we have a great structure with our 5G labs. We have six labs in the United States, one over in London. These are fantastic places where you can come in and innovate on the 5G network that's live, on the mobile edge compute live network. We have entrepreneurs, small companies, large companies, universities, academics, all come in and it's a great place to be. It's like a roll up your sleeves, and get on the network. Let's not just talk and whiteboard, but let's develop something.
There is a structure around innovation. Innovation is not just sitting back and thinking and waiting for that apple to fall on your head and the idea to pop up. There is a process around it. We've got great structure around that. I will say, to try to summarize, more of my time is spent looking forward because we've got just a great engine on today's technologies and today's business. We have a very disciplined capital allocation and planning process, too, which forces some of these issues.
We want to go after this next great thing that we think (consumers or businesses) will solve their problems and will be a big hit with them. All right, well, it's got to fit within a capital window. It sounds like, with $18 billion of capital, "Wow, you must be able to do everything." Well, there are still hard decisions to make. Migrating technology, decommissioning the old, always having an eye towards what is the return that we're getting on this or how long-lasting is this technology, understanding the change in consumer and business needs, it's a balance. But I think you want to be looking forward and have a discipline to force some hard decisions on the existing tech. How close are you to the products? The reason I ask is because it's clear, given the scale at which you operate, that much of your time is spent being an inspiring leader, developing plans, and so forth. Yet,
you're a technical person by background. And so, how close are you to the products themselves? Before running product development for Verizon, I was the CTO for Verizon Wireless. When Verizon Wireless was its own unit, we had very clear understanding that all the products we launched we should know how to use (as a leadership team). This was done to me and then I did it to others. If we're launching (you name it) Verizon Cloud—a great product that can help with consumers in terms of their storage needs for pictures, contacts, other things—I would be asked by my CEO, "Have you tried the product?" I'd pull it up. Here's VZ Cloud. It works great. It became the culture of the organization to know our products and use our products.
That has been around for a long time in Verizon Wireless. We all bring that with us. Now, on the business side, it's a little harder to do sometimes because we are all consumers. We all have consumer devices, but we're not all CIOs. We don't all run large organizations and try to manage a mobile workforce or fleets of vehicles. It becomes a little bit more challenging. There, one thing I love to do is sit down with our customers because they want to tell you how things work and how things don't work. I think, on the business side, you have to listen. You have to read. [Laughter] I don't know any other way to put it, but you've got to spend the time.
I tell my kids all the time when they see me online, reading or preparing in the evenings. I tell them. I say, you know you have a test tomorrow and you have to study for that test. I said, that never goes away. You always have to bone up
because technology changes so quickly. Customer needs change so quickly. Certainly, we've seen that over the past year. It becomes a little more challenging to be hands-on in the business side, but there are lots of ways to do that as well. We have a question from Twitter from Arsalan Khan on this subject of how you work with your customers. He makes the comment.
He says, "It seems that Verizon is almost acting as a consulting firm in some respects (guiding your clients) because of the collaborative relationship." We serve the vast majority of the Fortune 500. We count them among our valued customers on the business side. When you look at what they're going through, it's hard to even talk about it in such broad terms because it's different in retail, it's different in manufacturing, it's different in healthcare or automotive. But we have those relationships with those customers. It's our goal to be their trusted advisor on their digital transformation journey.
One thing that we've seen during this pandemic that continues today is it's sort of catapulted all of our journeys to digitize and use technology in our workforce. Whether that was something that we were doing internally or with our customers, number one, they see our leadership in 5G. Number two, they hear things like mobile edge compute and they think to themselves, "What can that do for me?" We're there to help them. Listen, we do very consultative work, but it's also a partnership. We bring them into those 5G labs that I told you about and are able to develop a very customized proof of concept, especially early on in new technology. You need to test, you need to showcase a little,
and you need to educate on what we call the eight currencies of 5G, a few of which are ultralow latency and really, really high bandwidth (in the gigabit per second speed range). Those things plus the reliability advantage and the IoT or connectedness advantage, these are just some of the things that 5G service provides over 4G or any previous generation of service (on the mobile side). When a customer hears these things, they say, "Wow! That sounds great, but how can that help me?" I think you can't just go in with solution upon solution without really understanding what the pain points are. Luckily, we have a great business working with those customers – industry by industry, customer by customer. Then it's my job to be able to say, "Oh, wow! Here's a great, augmented reality solution that worked for healthcare." Now, from a platform perspective, how can I repurpose that to work in a retail store? That's where our technologists come in. They're just really fantastic at being
able to look broadly across the portfolio. You're looking at a combination of market needs; interesting, innovative applications; as well as the platform that enables you to do all this. Tell us about the platform rather than me tell you. [Laughter] Our platform starts with our network. Over the past few years,
we've undergone a major transformation. We call it our Intelligent Edge Network. Back to that wireline and wireless business, we were able to combine those networks. It starts with a unified core network and then sort of evolves out from that in terms of fiber.
Fiber is what we spend a good piece of our capital budget on, and it is not wireline or wireless. It is both. It's multipurpose, multiuse fiber. The more fiber I put in the ground, the more enterprise customers that I could connect directly to data centers, the more consumers I can connect to our wireless network because those cell sites are only wireless from the device to the cell site. After that, it's all fiber. We have wholesale opportunities and the list goes on and on. That fiber network is really, really important. Then we have access technologies that, over time, we've become sort of access agnostic to how consumers and businesses want to get on the network. But that's really
the base platform. It starts with the network. Then a lot of people like to talk about above the network. What are the products and services that happen above the network? I think there you have to start with MEC (mobile edge compute). There we've recently launched a partnership with Amazon
Web Services where we are creating these outposts (along with our network) that are pushed out further into the network that enable developers, to use a platform that they're used to, to now develop services that could take advantage of 5G and those currencies of 5G that I talked about. We've launched – oh, goodness – I think over ten cities now with our mobile edge compute platform (along with AWS). We've announced a partnership with Microsoft for a private MEC. These partnerships are all part of the platform. Then, on top of that, you can think of different
types of services that can get access to that network and take advantage of those currencies. One I really love, because we also have just such a wonderful strength in it, is computer vision. Computer vision applies to facial recognition when you're walking into a stadium and people want to identify you. It applies to a manufacturing floor where we can look at products and services and do defect identification better than a human can, maybe. And so many other things. Computer vision requires what? It requires an awful lot of bandwidth. You don't want to be
transmitting that amount of data too far back into the core of the network. That's where the mobile edge comes in and applications like computer vision, for example, can sit on top of that. We're developing easy ways for applications to get access to the network. How do you onboard devices? How do you diagnose devices? All of those services are all part of the platform that we're building for enterprises in our mobile edge compute world. But also, over time,
you'll see consumers and some B2B2C applications coming out of those platforms as well. Where do the 5G labs fit into this? You've mentioned 5G labs several times. The 5G labs are instrumental to all this because, again, these are the places where we cannot just think big—along with our customers and our partners—but we can actually try things.
We have really developed a very rapid kind of rinse and repeat cycle on innovation. You've got an idea. Boom. Let's prototype it. Let's do that in an inexpensive way. By the way, all of that network technology that I talked about and, frankly, our network evolution to much more heavily software (as opposed to hardware) is a piece of what drives that agility. We're able to, in these labs, prototype very, very quickly. That's part of the magic there. I'll tell you. During the pandemic, guess what. No one is in the labs, right? The first thing that we did—after ensuring the health and safety of our employees—was to say, how do we continue? We love these places. Customers love these places. How do we keep that going?
Our team was able to rapidly go virtual. We have a 5G virtual lab, which is very interesting and engaging. We can meet there and take customers through the journey online. We're able to still maintain our innovation and also maintain our programming, if you will, that we've done in these 5G labs. For example, we'll set up a retail summit and we'll invite large retailers across the board. We'll invite some academics.
We'll have an in-depth discussion about our new technologies, what's happening in the industry, and how they can really aid retailers in some of the pain points that they have during the pandemic and ongoing. That's the type of programming and innovation that is really fueling much of what we're seeing now with 5G. It's very exciting. The labs then is almost a kind of bridge to help you at Verizon understand the real market needs from your customers and where they want to see all this go. Yeah, absolutely. I love to say innovation is not any one person's job. It's all of our jobs to think big. Innovation comes from a variety of places.
I would say my team is accountable for technological innovation, so it's amazing sometimes how, in the mobile world, maybe you change a bit or a byte or a tiny little setting and it changes the whole landscape. Not everybody is going to understand that, so we're accountable for that, pushing the technology to the limits, trying things, failing, and moving fast. Innovation also comes from our customers. There we have wonderful marketing and customer experience teams that work hand-in-hand with customers in all the traditional and nontraditional ways. Hearing from them is very, very important. Of course, innovation comes also from strategy
and really taking a step back and saying, "Here's a market maybe we're not in. Should we be in? What do we think the future really looks like?" I've got to tell you. I don't think Verizon is much different than many other companies. Over this last year, we've spent a lot of time thinking about those things because the world has changed so much. I mentioned digital transformation earlier. We estimate that most enterprises' digital
transformation journey has been accelerated by about five to seven years. I can say that I see that with customers. I also see it internally. I'll tell you that some of the solutions that we brought to bear very early in the pandemic were not new, per se. They were sort of in the pipeline. But what the pandemic did and what this dramatic work from home and all the societal change and unrest that we saw, the value of our connectivity and our services, it just demanded that we not wait. I think, more often than not, we found that we could go even faster. Sometimes I feel like we're going super-fast, but I know that
there is always a higher gear. I think it did push us into saying, "Wow! I've got the solution that was on the shelf," and, boom, we just did it. The same is true with our own operations. For example, when all the retail stores were closed, what do we do? Well, we didn't lay off. We didn't furlough. We accelerated our capital deployment and we leaned into deploying the latest network.
We also took those retail employees and retrained a number of them, the vast majority of them, to take calls in a call center. Now, it's just that agility. We've been doing, for example, work from home or home-based agent for a long time in our call centers, but it wasn't 100%. Now, all of a sudden, boom, we're 100%. Guess what; we found ways to make it work. The necessity being the mother of invention, I do subscribe to that as well. I think the pandemic and the learn from home, work from home, this environment just catapulted us all. There are a lot of learnings from that,
there are a lot of positives that we can take even more risk maybe than we thought, and there's always a higher gear to go faster. How did you drive innovation during a period of time when there was, number one, so much change taking place and then, number two, people were not physically together, and so they had to relearn how to work together in different ways? In that kind of situation, how did you drive innovation? Innovation wasn't my first concern (a year ago). It really goes back to, all right, well, even your family and then your employees. Are you safe? Are you healthy? What do we need to do to secure that? I already talked about what Verizon did and how we really rose to the challenge there. Then I'll tell you that when it comes to product development and innovation, we took our 5G labs and quickly turned them virtual, so that worked.
We took our product development process, the details of requirements, agile development, scrum teams, and all of that. We had already experience in doing that remotely, so we do development around the world. We follow the sun. We've got big teams in India and around the world, so we're used to doing bits of code, handing that off, and handing it back. So, a lot of it wasn't new. It just sort of put it on steroids.
The development process, I'm pleased to say that throughout 2020 and through the first quarter of 2021, we were able to meet all of our product objectives. I was (I don't want to say) surprised—I never bet against the team—but, boy, what a big accomplishment in the midst of all that was going on, to meet those objectives, which we did. Now, we look at, "Well, how do you continue in this mode?" until we get sort of a hybrid mode established, which of course we're looking at (like other companies). I think one of the big things is, we bought a company about a year ago, BlueJeans, that does video conferencing. That has really transformed the way that we think about integrating a fantastic video conferencing solution with other platforms that we have: our messaging platform, our computer vision expertise, our XR type of services.
How do we pull those all together to really take an excellent platform and make it that much better? We're all using BlueJeans inside Verizon. It's great, the way that we release code so quickly on that platform and the voice of the customer comes through. We're leveraging that internally and also for our customers. That innovation continues.
I think the theme here, Michael, is that I don't know that there were a lot of brand new things. It was about how do you take what you had a good hunch was going to work and just do it. Again, the lesson is about, maybe in a more stable environment, risk-taking and just always the pressure to move faster and be more agile in this world with technology moving so quickly. Again, it's not only 5G. We couldn't be any more bullish about 5G and how it will usher in,
literally, the 4th Industrial Revolution. We believe it's a general-purpose technology that is going to affect the way we live, work, and play – consumers and businesses alike. You think about that with everything else that's happening, with AIML, with microbiology, robotics, so many changes in the technical landscape. When they come all together, you can't sit still. If you sit still, you're losing ground. You've got to keep pushing. You're seeing so many different kinds of applications, whether it's 5G or these other technologies. What are some of the things that excite you that you see coming down the road?
Sports and entertainment. People are dying to get back. We're doing a number of things there. We're testing and actually using something called ShotTracker that uses sensor-based technology to transform the game of basketball and bring the in-person, in-stadium, in-venue experience to consumers at home, and fans on their device. That's one thing. Also in sports, we introduced the first 5G and MEC application at the last Super Bowl, which was this mobile game called the NFL Ultra Toss where you could sit on your device and virtually toss a football into a virtual truck that sat in the middle of the field, so multiplayer, in-person game, which would have been very hard to do on any other technology. That's done. Sports will be transformed. The fan experience will be transformed by these technologies. Let's go to education, so something a little less entertainment-focused. Healthcare and education are two big areas where this technology will make meaningful inroads for society, I believe.
In healthcare, for example, we're using 5G to take a virtual image of a patient's CAT scan of their brain, overlay it in augmented reality during surgery, and it leads to better outcomes. We have a lot of companies and doctors that are looking at this, so take it from them, not so much from me. When you're doing brain surgery, I've learned it's a little bit more art than science. There are ways that we can use the low latency and high bandwidth of 5G technology during surgery—and even leading up to the during surgery just during training of surgeons—to lead to better outcomes. That's absolutely happening. In education, we're looking at how 5G can transform this work and learn from a home environment. We're taking content. We have a great partnership with the Smithsonian where we're taking their existing artifacts and content, fully digitizing them, turning them into 3D artifacts so that you can access them in a very engaging way. Those are just a few examples. I love what it's going to do for education and healthcare.
Excited about every other industry too. Let me jump to another question very quickly from Twitter. How do you work with your customers' IT departments, especially in areas like cybersecurity? I'll ask you to keep it really brief. You don't ever want to really tout cybersecurity. I think it's one of those "knock on wood" things.
We pride ourselves on a secure and reliable network. Customers come to us because of that. We form deep partnerships. We just issued a cyber report, in fact, that our enterprise customers like to look at to help inform some of their decision-making.
Cyber is core to who we are. It's not new news that breaches and scams have accelerated during the pandemic, so it's even more important to be thinking about cyber. We have to be partners with our enterprise customers. Oftentimes, yes, that is with the CIOs and their IT departments. But sometimes it's even at the CEO level or even at the frontline level. Just like no one is accountable for innovation—everybody is—the same thing with cyber. Let's shift gears very much and talk about diverse teams, diversity in the workplace, and in STEM. You have a really interesting background in, obviously, your work. You're a woman in such a
heavily dominated male field. Tell us about that. For a woman in tech, Verizon has been a very good place to work. I believe it's because diversity is in our credo. We embrace it, along with personal development, not only because it's the right thing to do but because it's smart business. It's crucial to our success. Our customer base is diverse and we have to reflect diversity in order for the business to succeed. That being said, we know that there's always a higher gear. We've worked hard to improve the representation of women and minorities
in our workforce, especially in tech. We're not where we want to be, but we've been very open and transparent. We've issued publicly our diversity statistics and encourage other companies to do so because we also believe that you don't usually improve what you don't measure and take seriously, so it's very important. Now, I will tell you that, with Verizon, but also personally, I'm extremely passionate about getting more women represented in STEM.
There are a number of things that we do corporately and that we do in our day-to-day to encourage women to stay in the workforce. During the pandemic, we know that women left the workforce at higher rates than men and they were underrepresented to begin with. Now, instead of going forward, we've taken a few steps back. That's a very, very big problem and it's going to take a lot of us to fix that over time. We know we don't just support women through their journeys and through their careers. We have to go deeper. Deeper, to me, starts very young.
We have to get young girls understanding that technology and science is part of their everyday life. When we're cooking in the kitchen, when we're out gardening, the technology is a piece of that, so opening their eyes to the wonders of science. When girls get in middle school, we know that is the time that they deflect at a high number if something becomes uncool about being into science and math. We've got to stop that. There are a lot of programs that are aimed to do that but, at that point, it is extremely critical.
Verizon has what's called the Innovative Learning School, Verizon Innovative Learning Schools, where we're dedicating – oh, goodness. I wish I knew the number off the top of my head. I believe it's hundreds of millions of dollars in order to ensure that we have technology infused in curriculums in underserved areas and that women, young girls in tech is a key part of that. Then as these girls get into high school, they need role models. They need to be shown paths. What can you do with an interest in science and math? I tell my story often. I kind of looked into it. My father was an engineer.
I had a mother that said you could do anything that you put your mind to and try hard enough. I followed his footsteps and went to Penn State just like he did and got an engineering degree just like he did. So many women in my generation that had technical degrees have a similar story because I believe the statistic is about almost two-thirds of the practicing female engineers have a father or brother that's a practicing engineer. What does that tell you? That tells you you're out of luck if you don't have someone close to you that can sort of show you what to do with your interest and your abilities. One thing I'd like to say and to your audience
also is that you don't have to be an engineer. You don't have to be a woman in order to encourage this. We can all do more throughout that path with our children, with our neighbors' children, with our schools in order to encourage that type of growth participation because it will be a shame. We cannot look at this 4th Industrial Revolution and only have half the population participating in its development, its execution, and how it grows. We need everybody. We need a
full, diverse set of views on this. We're already seeing different types of bias erupting in algorithms. That's also a well-known phenomenon when it comes to AI. We need everybody's brainpower on this and we need diversity in order to really be successful and reach the full potential of everything that this technology promises in the future.
On that topic, we have one last question from Twitter, a great question from Constance Woodson who asks, "Will Verizon 5G's partnership with the new infrastructure plan in any way help bridge the digital divide in underserved communities?" Verizon has been committed to this for a long time, and we've just renewed our commitment. When you look at our social responsibility goals, bridging the digital divide is top of the list. That is because it's what we do. We feel that connectivity should be affordable and it should be accessible. That's why we are building the network as broadly as we can, as quickly as we can. That's why we have initiatives like Verizon Innovative Learning Schools that provide the latest technology to underserved schools. That's why we are frankly the largest rural
provider of mobile services right now. I think a lot of people don't know that. But when you think of rural America, Verizon is the largest provider of service in rural America. I didn't mention the C-band auction, but if you follow us at all, you just know that we were very successful in securing wonderful C-band spectrum that will serve this company and consumers and businesses for years to come. Long after I'm gone from Verizon, you will see that investment paying dividends because spectrum is the basic building block of wireless service and we've always been great stewards of spectrum. This was a big moment for Verizon and it's part of how we will provide service and continue to provide the best service to inner cities and to rural America alike. We are very committed to this. Thank you for the question, Constance. All right. Nicki Palmer, Chief Product Development
Officer at Verizon, thank you so much for taking the time to talk with us and share your thoughts and your views with us today. It's really been a pleasure. Thank you so much, Michael. Everybody, thank you for watching. Before you go, please subscribe to our YouTube channel and hit the subscribe button at the top of our website. A huge thanks to Nicki Palmer of Verizon and especially to all the people who contributed and asked such excellent questions today. Check out CXOTalk.com. We have great shows
coming up, and we'll see you again next week. Thanks so much, everybody. Take care. Bye-bye.