Stewart Sherriff: Death in the family the biggest challenge
Phone boss thrown into the job after plane crash killed former CEO, writes Matthew Theunissen
Walking into the office as the new boss of 2degrees, after the death of his friend and predecessor Eric Hertz, was the probably the toughest thing Stewart Sherriff has ever done.
How would the young telecommunications company and its staff cope after the death of its founder and his wife Kathy in a plane crash?
“We brought in counselling services for the staff but within about three or four days the lady that was in charge of it said, ‘ Stewart, we’re wasting our time here, nobody’s coming to see us. Just look out there’.”
Employees were hugging one another, placing photographs of Eric and Kathy on their desks and the atmosphere was less like an office and more like a family home, Sherriff says today.
Eric Hertz and Kathy Picone Hertz died when the plane he was piloting crashed into the ocean off Raglan in 2013.
“It’s probably the toughest thing I’ve done in my life to be perfectly honest with you, but what it did do is it solidified the family environment within 2degrees,” says Sherriff.
During his four years as chief executive of the country’s thirdlargest telco, Sherriff has seen it grow from a company offering just pre- paid mobile services to a full telecommunications provider with a market share of about 24 per cent.
“Our largest customer at the moment is the Ministry for Primary Industries,” he says. “It’s 2800 people, it’s got 120 locations, so I guess what I’m trying to describe is, we can serve a kid with pre- paid right up to one of the largest ministries in New Zealand.”
Sherriff ’ s start in life couldn’t have been further from the corporate world. He was born in the rural village of Letham, central Scotland, population about 1000 at the time.
His parents worked on a farm and Sherriff could drive a tractor when he was 11.
“I always had a slant towards mechanical things . . . I loved the old phone dials, thinking how does that work?” he says.
“[ I was] forever doing things like taking clocks apart and not being able to get them back together again.”
His Scoutmaster, Ernie, was a technical officer for Britain’s Post Office, which was also the only phone company in Britain.
It was on his suggestion that Sherriff completed a Post Office technical apprenticeship, while also taking night classes to become an engineer.
With only one telco in town — as in most countries, including New Zealand — the Post Office it was.
“When I was about 24 I started getting a wee bit bored with the same sort of daily routine so I thought I’d look for another job . . . but there was nowhere else to go.”
So he looked beyond the United Kingdom and landed a job in Australia, working for its only phone company, Telecom Australia ( now Telstra), in Perth.
“You know when the first phone call was ever made? It was 1875 by a Scotsman, Alexander Graham Bell.
“I started 100 years after the first phone call, in 1975, and the technology had hardly changed — it was almost exactly the same. It was still a piece of copper wire, it was still a transmitter and it was still a receiver. And why was there no innovation? Because there was no competition.”
That changed in the 1980s, sparked by Margaret Thatcher’s privatisation of the British Post Office telecommunications arm.
Australia followed suit and in the early ‘ 90s, when its Government i ssued a second telco licence for a company called Optus, Sherriff jumped ship.
Optus had a keen focus on mobile technology and committed some A$ 6 billion ($ 6.4b) to build a GSM network, which Sherriff became heavily involved with.
“Nobody had ever done it before because we were still using the 100- year- old copper wire and all of a sudden we’ve got this blank canvas and they say, ‘ Build the network, we’ve got A$ 6b’,” he says.
“Us engineers were thinking, this is the chance of a lifetime.”
They were right. The expertise he gained constructing the network meant he was in hot demand at a time when the world was vying to get in on the mobile revolution.
“I was getting calls every week, ‘ Do you want to come and join this project in France?’ ‘ Do you want to join this one in Italy?’ Do you want to join this one, wherever it was. So consequently I left Optus and took a job in Saudi Arabia as a technical specialist.”
Next, it was on to Hong Kong in 1995 to take up a similar two- year contract.
It was there that he met long- term business partners Brad Horwitz and John Stanton, and the trio saw an opportunity to bring mobile to emerging markets.
They started a company called Western Wireless International and Sherriff travelled the world setting up mobile networks and companies.
The first was in Latvia, then Georgia, Ghana, Ivory Coast, Bolivia, Haiti, the Dominican Republic, Croatia, Slovenia, Iceland, Ireland, Austria, Papua New Guinea and the Solomon Islands.
“The places we were operating in generally had very little infrastructure, so by deploying a mobile network — in some places we were the first mobile network — that gave a quantum leap for those developing markets,” he says.
“I spent 75 per cent of my time on an aeroplane, effectively, travelling the world.”
After Western Wireless merged with Alltel Corporation in August 2005 and sold its international assets, Sherriff and his partners bought back the Haiti and Bolivia operations and formed Trilogy International, which now owns 2degrees.
One of 2degrees’ founders, Tex Edwards, heard of Sherriff ’ s exploits and asked him to come down to New Zealand, luring him with the offer of a seat next to rugby great Bill Osborne — another founder — at a British & Irish Lions game.
“Brad and I came down to have a look and said, ‘ You know what, this does actually make sense’. If you think about it, in 2006, you know what you were paying for a pre- paid minute in New Zealand? Eighty- nine cents. And it was 44c to send a text.
“People were frightened to call, so the average usage in New Zealand was 50 minutes per person per month. In the USA it was around about 600 so we saw a huge opportunity.”
As well, New Zealand was one of only a handful of countries to have just two mobile providers.
“So we said, ‘ Yes, we’ll come and invest,’ and so we built the network and launched it in 2009.
“We only had 50 per cent population coverage at that time with cell sites in Auckland, Wellington, Christchurch and Queenstown . . . now we cover about 97 per cent.”
He says Vodafone and Telecom — now Spark — may have underestimated 2degrees.
“I think we may have surprised them a wee bit,” he says. “I believe we invented competition in New Zealand.”
Sherriff describes himself as a very hands- on boss, listening to customer care calls for half an hour every day and going on sales visits every month.
He has also made a point of getting to know his new home, and he and his wife have a campervan in which they spent 115 nights last year, travelling the country almost every weekend and every holiday.
He says he i s fascinated by the burgeoning “internet of things” and sees huge opportunity for 2degrees in what he believes will be the next big thing for telcos.
Despite the tragic circumstances in which he started the job, Sherriff says he is proud of what the company has achieved in these past four years.
“We’ve grown from 700 employees to nearly 1200; we’ve pretty much doubled the size of the network; we’ve acquired a fixed operator; our subscriber base has grown considerably and we were profitable last year — that was a huge milestone.
“It’s just that team spirit that developed within the organisation after Eric’s death that helped everyone weather that storm and will continue to stay with us.”
I think we may have surprised [ Telecom and Vodafone] a wee bit ... I believe we invented competition in New Zealand. Stewart Sherriff, 2degrees