The COO of a cable company has to be conversant with virtually every aspect of the business but doesn't necessarily have to be great at every job. Just ask Pat Esser to climb a pole. The chief operating officer of Cox Communications started in the cable business fresh out of college in 1977, getting a job at McDonald Group's then-new system in Waterloo, Iowa. Installing a customer meant climbing a utility pole to tap into the main cable and run a "drop" to the home.
Esser had trouble staying on the pole. "I fell an average of once a week," he says. "Usually the last 10 feet."
Was he ever hurt? "Never seriously. When you're 21, you can take it." Once, losing his balance, he had the choice of falling onto a picket fence or into a yard containing two Doberman pinschers. He says he was aiming to land on the Dobermans but managed to hang on.
Esser hung on to cable as well, joining fifth-largest MSO Cox and eventually becoming a senior operations executive of the Atlanta-based company. Then last January, he was tapped to replace his boss, Maggie Belville, a former cellular executive squeezed out because of her grating management style.
Esser won't talk about Belville's exit but will wax enthusiastically about taking on her job.
The excitement of it, he finds, is also his biggest challenge. Cox is the only cable operator successfully selling three new products. Every operator is pushing into digital cable and high-speed Internet service, but only Cox and AT&T are also using the same wires to sell residential telephone service. And since AT&T is making a mess of it—financially speaking—it's Esser job to make it all work.
Mind you, penalties for missteps can be harsh. A year ago, Cox was brutally punished on Wall Street when it missed a quarterly target by just 1 percentage point, a mere $3 million short of the expected $340 million in cash flow: Investors chopped Cox's $25 billion market valuation by $5 billion in a day.
Well aware of how treacherous his position can be, he has two goals: "Growth of new products is one, meeting expectations financial is two." At the same time, he adds, the systems have to meet Cox's high customer-service standards, widely acknowledged as the best in the industry.
Esser's route to the top was an unusual one, through ad sales. Home-grown cable operations executives tend to journey through customer sales and service or plant management. Even today, local ad sales is a small portion of an operator's revenues, just 5% to 6%.
But ad sales taught Esser plenty about programming and sales management and marketing, and forced him to grapple with competition from broadcast TV, radio and newspapers years before DBS would teach those lessons to the rest of the industry.
Esser, who switched from managing Cox's ad-sales effort to operations in 1999, says the overlap is more than he once thought. "The similar part is the culture in a high-growth business," he explains. "Decisions you make often have to be adapted in 30 to 90 days. Things change. The competition side of that business really honed my skills."
Esser stumbled into ad sales. After a few months with a Cox system in Hampton Roads, Va., he went to grad school in 1979 and was recruited to cold-call local businesses to sell ads in Cox's Moline, Ill., system. Cox was years ahead of other operators, establishing ad sales as a separate business line in the early '80s. In 1991, Esser was put in charge of the company's CableRep unit.
The surprise about new-product deployment, he finds, is how well it's going. When Cox rolled out telephone service in its systems three years ago, "15% penetration was our guess. Now it's 30%." Digital cable penetration was expected to top out at 30% after five years or more. "I think people are saying 50% pretty confidently now," Esser says.
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