hroughout the life cycle of the New Economy, perhaps no other segment of the tech industry has walked a more tenuous financial line than Internet service providers. Countless isps have already imploded—victims of fragile business models, crippling network costs and opposition from the Baby Bell local phone companies.
Earthlink, however, has managed to stay in orbit, next to the planetary presence of aol Time Warner's 27 million modem subscribers.
For President Michael McQuary, two things most separate his approach to leading a startup versus a conventional business. For one, the hyper-evolving rate of change in the industry impels Earthlink to condense its strategic planning process. Rather than defining a three-year strategy, McQuary says the company lays out its goals every six months, knowing that current priorities are vulnerable to shifts in the marketplace.
Also, Internet startups do not have the luxury of learning from history. "We certainly have had to be nimble and intuitive in our decision making," says McQuary. "There isn't much of a historical basis to look back on for answers, and it's hard to recognize trends."
Earthlink has always prided itself on a frugal philosophy of foregoing enticing short-term opportunities in order to ensure long-term stability. "I think a lot of companies, in their zeal to grab as much growth as possible, didn't anticipate the consequences of expanding so quickly," says McQuary. "We want to manage for the long term, and if you jerk employees around too much with layoffs, you'll lose trust."
McQuary also realized the importance of staffing senior managers that may not fit the prototypical mold of a "dot-com warrior." In fact, he found that such managers might not be best-equipped to handle a stalled or faltering economy. "As the dot-com thing took off, everyone was looking for the aggressive, swashbuckling management teams that were going to grow recklessly at any cost," says McQuary. "But as things turned around, these companies were left with managers that didn't have the right skill sets to address tough times."
At Earthlink, employees are challenged to stretch their knowledge base and skill sets through training programs. When it comes to promotions, McQuary says, the company looks within its own ranks for someone to groom before it looks outside. It's a policy that has fostered excitement and motivation among Earthlink's workforce, particularly when they see co-workers climb the ladder.
As far as qualities McQuary looks for in his leaders, first and foremost they have to be consensus builders. They must communicate well across the organization, and they have to be able to process a lot of information in a short period of time. But while Earthlink has had exercises in succession planning, McQuary doesn't feel pressed. "I'm only 41 years old, and I don't plan on leaving in the foreseeable future."