Leveraging Tech to Drive Growth in an Evolving Industry

Burton M. Goldfield: Hello, PeopleForce attendees! Please join me in welcoming Dave Watson, president and chief executive officer of Comcast Cable to PeopleForce 2022.

Dave Watson: Thank you.

Burton: Good to see you.

Dave: Good to see you.

Burton: So I am thrilled to have you here today. Under Dave’s direction, Comcast Cable has experienced incredible growth. In fact, today Comcast is the largest internet service provider in the country. Dave is an amazing leader who I’ve gotten to know and his unique perspective on how technology helps companies accelerate their growth and transformation is extremely relevant to all of the SMBs we’re talking to today. First, I want to make sure that our audience is represented in this discussion, so if you have a question for Dave, please feel free to submit it online. Dave, thank you for joining us.

Dave: You got it, Burton. Great to be here.

Burton: So let’s talk about change. You have presided over incredible change—technological change, social change within Comcast. How have you navigated that change?

Dave: Well, I think the starting point for us has always been we’re going to participate in a market where we can do well. We feel we had a real chance to be unique and compete fiercely in. It started for us in really the late 1990s, early 2000s with little bit of M&A with AT&T’s cable systems. That gave us a chance to cluster really the DMAs that we serve, many of the top DMAs in the country. But from there it was really the point of focus, prioritizing the things that we know we can do well, where we felt we had a chance to be successful. And we knew even way back then that we needed to rebuild. It was for the cable industry, an enormously important, the capital investment cycle. Our products were not... So even video at that point was not sufficient even to satellite. So we really needed to change what the products look like, their experience, their capabilities.

So started with digital video and the big investment quite frankly was, if you’re going to build that, when we got San Francisco... You’re talking about San Francisco, it was I think maybe 40% rebuilt. And so you needed to build two-way capability and we weren’t quite sure just how amazing broadband could be, but we knew it could be a lot better than a 100 kilobit DSL. So we invested for the future and that has been the growth opportunity for us is how do you continue to leverage a network in product innovation. And that’s been what we’ve tried to do in a very fluid environment ever since.

Burton: So talk about growth. How do you balance the growth and the profitability and how would you advise small businesses to look at some of those dynamics?

Dave: Well, it is there for us. We’re in the recurring revenue business for the most part. And you look at opportunities that you have to grow off the network. And we had lines of business. Video is changing rapidly. Business services was a natural extension for us. And it started 15 years ago, believe it or not, that we got going. And it was all because we could do facilities end-to-end capability. So we had success and residential broadband, but we knew we could go up against the telephone companies. And they’re very powerful, very strong, good at what they did, but it was just them. And we had a shot at pulling it off and we felt the starting point was small business. That was really the foundation. If you’re going to build a house of growth in the business services area, it really was small business.

And that was the very starting point. And our belief was we can deliver localized, better service, better products that were maybe meant for larger businesses at some point. Let’s get ‘em to the SMBs. And so that was the whole focus. And hired a great executive. His name is Bill Stemper. And Bill hired a whole bunch of people and we figured out how to provide local sales, local service delivery, fully integrated the cable business. So that was one really important... It’s still the fastest growth area for us is Comcast Business. But it is a balancing act. Your point is right between how you’re going to grow, how you’re going to invest, especially when it is billions of dollars of capital investment every year. You have to have a pretty clear idea of where those returns will come from. And we’re fortunate that there are products that are important to people. We recognize that. And for us, you got to stay ahead of where the customer is as much as you can in terms of capabilities.

Burton: I think that’s great advice. You have to stay ahead of where your customer is. So was there a large investment in core technology or was it more infrastructure? You mentioned AT&T. Old Bell Labs did a lot of amazing research and development back in the days. How were those early days in terms of balancing the technological and what I would call the infrastructure part?

Dave: It started it off with the software protocol that only great engineers can do. They’re horrible at naming things, but they’re really good at developing good products. It was called DOCSIS. But it started with that and it was the notion of how to over the same infrastructure deliver IP capability. That’s what delivered two-way. And so, the two-way investment cycle, because we needed to deliver more bandwidth for video, but then layer in IP capability, that’s what brought in broadband. And from our standpoint, if you’re competing, I imagine this is relevant for every small business owner, how are you going to stand out? And so, what is going to be our point? When we did video on demand, it wasn’t just to deliver a little bit better pay per view. It was to provide every season that we could if we make it available through a set-top box and make it easy for a consumer. And the same thing went with broadband. It wasn’t just to do a little bit better than DSL, it was to totally change the category and it meant maybe even changing video, which it ultimately has and then some.

Burton: That’s fantastic. And it goes to the heart of the issue of how can small businesses leverage technology, your technology, other companies’ technology to make themselves better ultimately to make their customers more successful.

Dave: It is such a profound thing for what is possible. For us, a big part of what we do is improving service. And we had to. It was just a vital moment. And one of the core pillars of that transformation was digital and digital tools and capabilities. And I know that’s enormously important for small business, medium-size businesses. And so it starts, our belief is you need great connectivity. And certainly everyone has mobile, but there’s two kinds. There’s fixed capabilities that can do everything and hopefully it’s connected to Wi-Fi and you can give some of that Wi-Fi capability to, depending on your business line, if you’re running retail or hospitality or something like that, then you’re sharing Wi-Fi and making that available to your customers. So there’s connectivity wired and wireless. Then there’s a whole suite of products that are important for small business to think about.

And a decade ago, the cybersecurity needs, it was there, but not like this. It’s right up there, I imagine with cloud software spending and great partnerships with TriNet. But you have to think through how do you protect your business as much as you do? How am I going to grow my business? And so those are all the technical solutions that we’ve gotten into to make sure we’re going to be partners with small business, medium-sized businesses. So there are cameras, there’s mobility solutions, gotten into the mobile business—so there’s a suite of things we’ve tried to really... From the moment we started with small business, we wanted to consult, we wanted to provide the right connectivity solution and we were going to be one of the only ones that were going to do it end to end from a facilities perspective. But it was really important to help grow, understand how you’re going to grow your business and what can we do to partner with you to help.

Burton: So has work from home and COVID helped your business or hurt your business?

Dave: From the cable side, it has been... What I think COVID has done has been one of the great accelerators of any time that I’ve witnessed. It’s changed a lot of things, but it has accelerated everything. And what I mean by that is from the moment it happened, everyone went home, school shut down. And from that moment in March of 20 to this point right now, we added, and we talked about this in earnings, three million broadband subscriptions. We just went through the roof. Now what’s going on is things have leveled off. Some people as schools opened up, people are going back to work. So people are making some tradeoffs and so things have leveled off. But it has been a positive. And one of the great positives has been this acceleration of digital capability. We knew it was important, but things like a self-install kit that we would do in the mid 60% range where we would take a modem, a gateway device and a couple of outlets and we’d show up and let the customer set it up and do okay in the mid 60% range.

Now we’re flirting with close to 90%. And it was a lot of behind-the-scenes platform improvements on our end and some consumers’ willingness to dive in and do a good job with that. But it’s apps that have gotten better. So it has accelerated the digital service capabilities that we deliver. So net-net I think that’s an improvement. And by the way, I think that’s something that’s going to stay with us forever. There’s certain things that have happened during the pandemic that it’s hybrid. Hybrid work is going to be with us for a very, very long time.

Burton: So I was one of the early users of the bring the box home and set it up yourself. And that was fun because I loved being a pioneer.

Dave: Did you do it?

Burton: I did it.

Dave: There you go.

Burton: I did have some help over the phone by somebody wonderful but we fully set up the house without anybody coming into the house. And I remember when the trucks had to roll up and do the work, and this was done fully remote.

Dave: We had stories of... A quick one was our technicians would deliver the self-install kit. Number one, the moment that it happened, I did hold my breath for a little bit, but the network needed to meet the moment it did. And then some in Europe, not to pick on anybody, any country over there, but they actually had to down-res streaming applications like Netflix.

Burton: Oh, interesting.

Dave: ... because they couldn’t handle it.

Burton: Too much bandwidth?

Dave: It was just, yeah, they didn’t have the same robust capabilities. But our technicians in some cases would drop the self-install kits, sit in the driveway and then walk the customer through.

Burton: Through what?

Dave: Just in case, because our commitment was protocols change. But if they’re going to have real trouble, we would go in there and make sure the core connectivity was set up.

Burton: So I had somebody on the phone the whole time walking... I was walking around and I got it done. I felt good about it.

Dave: Good.

Burton: How do you look at staying ahead of the competition and do you see that changing over the next five years?

Dave: It’s a massively fluid environment competitively. So you have... It used to be, there are a couple, the big telcos we go up against and satellite we go up against and now could be a dozen in any... It could be a host of apartment buildings. So you do have to anticipate, you have to stay focused though on who you are as a business, what your strengths are and be nimble enough to react. So we have a situation now that’s pretty aggressive with fixed wireless between T-Mobile and the Verizon Wireless. Very competitive. We talked about it, but it doesn’t mean... and you have to put things in perspective. Our churn is at an all-time low in a very good way.

People are not leaving, but we do need to adjust. We do need to make improvements. But you focus on your strengths, great broadband, great mobile, pulling them together, making it easy, talking about why that combination’s better. Business service is doing the same thing. And so you have to stay on it. And for us, you have to be very granular, meaning you can’t look at competitive activity at the ZIP code level that if you’re looking at a ZIP code level, then you’ve lost. You have to get down to a very granular block by block perspective.

Burton: So let’s talk for a minute about culture. I know you spend a lot of time communicating with your team. How do you define the culture within your organization? And specifically, how does it apply to the service model, which I know you’ve done a lot of work on in the last five years?

Dave: Culture is unbelievably important. I think it requires a level of honest awareness of who you are and the company and the kind of people you’d like to join the company and the values that you have. When people talk about mission statements and values and stuff, sometimes their eyes roll back. But what really matters, I think if you spend most of the time working with each other, and that’s a small business, medium-sized business, large business, you want to work with people that respect each other, that are going to be accountable, that can balance taking on aggressive goals, help each other out when things don’t go so well. I had the great fortune, Burton of spending time with Ralph Roberts, our founder, and now Brian runs the overall company. But Ralph was a classic entrepreneur. Comcast started as a smaller business and just grew.

But Ralph would talk about how is the team doing? If you’re running up against something, what are you doing about it? And you have a choice to make, do you help a teammate out? You pick them up or you know, could handle it a bunch of different ways. We want to be the kind of place that you have each others’ backs, but doesn’t mean you don’t be focused on what the objective is. And so, I hope our culture is one where we stay very aligned on what we’re doing. And it did come back to the service issue. And the service issue I think we focus very much on building out these cities, rolling out a bunch of new products, investing in IP and broadband, but our service delivery was too inconsistent. It really was. And we needed to change. So culturally, if you don’t get that right, if people think what you’re doing is a press release, it’s not going to work.

Burton: It’s not going to work.

Dave: It has to be connected to how you’re going to run the business and how does it fit to outcomes, business outcomes, whether it’s customer relationship growth or EBITDA growth. But if it’s not connected, it’s just not going to work. So we had to make sure everyone understood that it’s part of what we’re going to do. And the system that we picked was net promoter score. And you could have picked a handful of things, but it was important to have something that was a customer listening device. And it really has helped. So, it’s a multi-year effort. We started off in the negative terrain and now comfortably positive. But more importantly than anything, I think people feel they can do something about it. Everyone in the company can play a role. Things like first contact resolution, that is something that really matters. And we’re not perfect. We’re really not perfect, but it is an opportunity. Every day you can get better and everyone can play a role in that. So culturally, I think it has been really helpful and it moved the ball forward.

Burton: And internal communications and collaboration around these ideas, how do you do that? Do you do that in meetings? Do you do that in videos? Do you send out emails? Because that’s so tied to the culture and the overall mission.

Dave: A big part of the system if you’re really going to do it, is a lot of listening. Listening is enormously important. In two forms of listening, you listen to customers. So I will do listening and they accuse me of giving away too much when there’s a customer problem. But we do listen and everyone takes calls and then you huddle. They’re called huddles around how did it go? What did you hear? What did we learn? What can we get better at? And then you have a prioritized list of things you’re going to do about it. The second form of listening is with teammates. And that to me is unbelievably important. I was just with a small business owner that had some fast food franchises.

From his perspective, it’s that listening to his team that means everything to him and how they run the business. Anything that’s going to change is from his teammates in terms of what’s working, what isn’t, what can we change? Not doing everything, but then focusing on what you can do better. So the NPS system for us, customer listening, a lot of teammate listening and then making sure you’re not going to boil the ocean. You are going to pick the top 20 things and then do them. Worst thing you can do if you’re trying to change the culture is to talk about it a lot and not do something. So you got to deliver.

Burton: And that’s what you were saying earlier, just being true to yourself, being true to the goals that you set and make those goals.

Dave: Right. That’s exactly right.

Burton: Right. And how important is the hiring and the process around the people that are coming to Comcast today? My guess is you’re hiring a tremendous amount of people. How do you attract, retain and give them the tools to work with, to align with where you guys are going?

Dave: Well, it’s interesting and it depends on what part of the business we’re talking about. But I think everyone wants an opportunity to grow. It varies by area. They want a chance to do that. So we talk about that a lot as to what their ambitions are. And if you’re a technician is, we’ll talk about their career map. The call center representative of a teammate, what is their career map? And we want somebody that’s interested in that. If they’re not asking about, well, what’s possible? And then I think if it’s engineering, if it’s the product innovation team, then we’re talking to them about significant changes. I think people, the difference between us, what happened post-AT&T is the ability to truly change a marketplace. That is unbelievably different. Right after we got AT&T, I went to, and I had to do a little bit of a tour through the tech community in the West Coast and promising them we would rebuild San Francisco and get them two-way capability, but they didn’t believe me.

They didn’t believe us that we were going to transform and really deliver the capabilities that we have. But I think that’s pretty exciting. If you’re someone that wants to do that, the ability to work on the next generation, a broadband 10 gig is what is possible. What can you do with that? And there’s an inkling of what’s possible. But VR, AR, 8K gaming, the hospital applications, the medical applications that are possible, hybrid work. So people, I think, they come to work for a company maybe for that immediate opportunity; they stay because they can make a difference.

Burton: Potential. Right, right. So you may have seen the question that popped up from the audience. They’re talking about 10 gigs. Is that really coming? When will something like that be available to the general public?

Dave: This next week. I have a great teammate with me that’s working on communication, planning around, and he’ll kill me. But we do have a session group of engineers that are showing up in Philadelphia all week and we’ll talk a lot about this. But what we’ve talked about so far with 10 gig, we call it 10G and it’s really the next generation of DOCSIS, that original name that no one can recall. But 10G is multiple gigabits symmetrical. And so today, what we’ve just announced a week ago is multi-gig downstream and then 10, 15 times upstream increases that are happening city by city.

It’s going to keep going through next year. And so that already is changing quite a bit the applications, what’s possible. So if you have... Today’s average household has 20 plus connected IoT devices and about five of them are workhorses, your smart TV, your laptop, your iPad, your phone and then maybe some cameras and then it just goes. So you need all of those things to work simultaneously. And that’s not even talking about a gaming console. So we’re going to be talking about next week is that next generation of what’s possible. So it is going to be... It is very real. So multi gig is happening right now and symmetrical multi gig is very real and will be happening over the next several years.

Burton: I happen to notice over the weekend that I have 34 devices connected to my little network.

Dave: That’s amazing.

Burton: So I guess I’m one of the hogs of bandwidth because it seems like everything from the Ring doorbell to the cameras, pretty much every device you buy these days is connected to your wireless service.

Dave: And the good part about that is that it can be so seamless. And it was on the verge of, and it still is, can be cumbersome between the different devices. But I think the device manufacturers are working hard at it. Everyone’s working on trying to simplify that as much as possible. But we do have an app that... and everyone should have it, but the service providers that helps you download, simplifies using it. So if you want the kids to stop doing whatever they’re doing so they can do some homework, parents can shut things off and its becoming much simpler to be able to control all this activity.

Burton: Yeah. And while you’re talking about that, can you talk a little bit about security? It seems to be playing a bigger and bigger role in our business and I’m sure it’s a big role in your business as well.

Dave: It is one of the most important services that we talk to partners about and of any size. It’s small business, mid-, right on up to enterprise customers. And so it’s enormously important. And in some cases, it’s built right into packages. It’s included depending on the package that you select. But it is vital. Everyone I think does understand it with how clear it can be. But I’m not sure people understand just the amount behind the scenes that goes on.

Burton: Has to do.

Dave: The number of attacks that do happen and the level of protection that’s required. So it’s actually become core connectivity is number one. This is either wireless is the current one that people are talking about a lot with us in cyber securities, neck and neck with that.

Burton: Right, right. So last time I was at your office, I couldn’t help to notice how many young people now work at Comcast. What is your advice? And it may be because I’m getting old, I don’t know, but they looked very young. What is your advice for a young person starting out, graduating college, coming into the workforce in this new realm, however you want to define the realm of radical change over the last couple years?

Dave: Well, I think you’ve got still a ton of choices to make. I think clearly, if there’s a product category that excites you that you’re connected with somehow, that’s great. But doesn’t always translate to growth. So, it’d be nice if there’s a growth opportunity. The industry itself has growth potential. Can you grow the business that you’re in? Can you play a role in that? If the industry is growing, this company’s shown its historical growth trajectory, then you’re going to have a shot to do a bunch of different things. The odds increase. So I think that’s something that we talk about with the folks that are thinking about starting off their career. And I think that you ought to pay close attention to the fundamentals though. You really should be thinking about how do they do things a little bit. If you’re talking through an interview process, then talk about the whole notion of teamwork. Does it ever come up? And how does a team work?

And once you start with the, I don’t know, whoever it is, a small business to larger enterprise businesses, the whole notion of teamwork is just so incredibly important. You have to focus on what you can do to help that team be successful. And to me, to your earlier question, the kind of people that we’re looking for will be those kind of people wherever their educational background comes from, whatever their track record is, are they focused on how to help that team become successful? It may be their individual contribution and it depends on the role. You’re terrific in sales, that’ll speak for itself. But there may be moments there too where you can help out a teammate that is having some difficulty getting over that hump. And what can you do to help that team? That will be noticed, that’ll translate to you becoming a leader. And so, we will always be open to looking for people that would be more successful in a team environment than not.

Burton: Excellent advice. So I consider you somewhat unique. You’re an entrepreneurial CEO of a massive company and you have that entrepreneurial spirit. So I wanted to talk to you and share your wisdom with us today. I appreciate it. I appreciate you and I learn something every time we talk.

Dave: Thank you for having me.

Burton: Thank you so much.