Exclusive: New CEO Kate Johnson talks what it’ll take to turn Lumen around

For someone who just took the helm of a massive communications company, Lumen Technologies CEO Kate Johnson sure seems to appreciate opportunities to disconnect.

Johnson grew up on the East Coast and since moving first to the Pacific Northwest several years ago to take a job with Microsoft and later to Colorado, she’s leaned into her love of the outdoors. Married to her college sweetheart with two children, Johnson said she and her husband have recently taken up cross country skiing in the area around their home in Denver.

“You’ll find me outside all the time,” she said. Of skiing in particular, she added “It’s about fitness and disconnection. You know, my phone doesn’t work when I go to Eldora Mountain on Saturday mornings for a couple hours. And there’s something very special about that time.”

It could be that Johnson relishes those moments of rest because she’s just begun climbing a massive hill, endeavoring to drastically overhaul Lumen’s company culture, pare down its product focus and spin up execution engines in time to deliver revenue and EBITDA stability by the end of 2024. It was exhausting just to type her goals, let alone achieve them.

The aforementioned culture shift is perhaps the biggest task ahead and one that will impact Lumen’s ability to meet its financial and product objectives. After all, as Johnson explained, happy, empowered employees deliver better customer service, which in turn leads to growth, which makes shareholders happy. So, while it might sound like some buzzword from the big tech world, culture is going to Lumen’s beating heart going forward.

As Johnson recently explained at an investor conference, the culture shift involves changing Lumen’s mindset from an internal focus on driving integration and efficiency across disparate assets to an externally-oriented obsession with solving customer problems. The idea is Lumen will do fewer things, do them better and do them specifically to address the needs of its clients.

She told Fierce the change will also include creating an environment in which employees feel “it’s safe to speak truth to power” when initiatives don’t appear to line up with Lumen’s new "North Star" mission or things aren’t working as planned. And to get there, Lumen is leaning “aggressively” into building employee communication skills through training programs such as Brené Brown’s Dare To Lead.

Winning them over

Johnson, however, knows there are skeptics within Lumen. That’s just science, she said.

“When you’re driving a massive transformation the law of thirds applies,” she explained, noting there are more than 29,000 employees at Lumen. “A third are all in, a third are saying ‘I don’t think I want to do this,’ and then the middle third is the one that’s watching the two groups and trying to figure it all out. And when you’re a changemaker, a change leader, you go hard to the hoop and try to get that 67%, that two-thirds, that critical mass to be all in. And if you can, a lot of times you’ll see people in the third that wasn’t so excited about the change start to migrate over and you can build from 67[%] up to the 80s.”

This kind of challenge is something she’s tackled before. In her previous role as President of Microsoft US, she worked to drive digital transformation both internally and with clients.

But change is hard – it’s not just a science but also an art. The latter involves mission clarity and clear, empathetic communication. It requires leadership to push employees out of their comfort zone without alienating them completely. And, with a bit of a grimace, Johnson admitted she hasn’t always gotten that balance right.

She pointed to one specific example from her time at Microsoft. In her role as a changemaker there, she noted she had a tendency to “push the envelope as much as possible.” And delivering an update for her division in one quarterly meeting she “pushed too hard” and “talked about all the things that were going wrong. It was just too much, it was just too hard for everybody to process and internalize. They sort of took it as me sort of being very critical of the company.”

Though perhaps a hard lesson, Johnson said it was a valuable learning experience and strong reminder to “stay on the curve.” When you push too hard, she said, you can end up becoming an outsider on the inside. Instead, it’s best to “meet the organization and the people where they are.”

Johnson stressed she alone cannot transform Lumen. Her job, she said, is to “lead the people who run the company.” That’s why one of her existential problems was getting the right people in the right roles from the start. Since taking the reins in November, Johnson has made three major hires, bringing in new executives to oversee the company’s product and enterprise sales divisions as well as customer experience.

With the team now in place, her job is about constantly supporting them as they execute on the plan.

‘Proudest moment’

Looking back on her career, Johnson said she was fortunate to have “amazing bosses” at every step along her path from UBS and Oracle to GE and Microsoft, each of whom taught her something different. She credited two strong female colleagues at UBS with taking her under their wing and teaching her not just about technology and banking but also about how to operate as an executive. That experience, she said, was “formative.”

Then there was Beth Comstock, who served as SVP and Vice Chair at GE during Johnson’s time there. Comstock had a “tremendous influence” on Johnson, helping her learn how to think about driving scale. At Oracle and Microsoft, too, there were male leaders who showed Johnson how to execute at scale and build engines for sales and support.

All these experiences culminated in Johnson’s appointment as Lumen’s CEO, which she called the “proudest moment in my career.”

Before her arrival, Johnson said she thinks Lumen made the right strategic moves in shedding non-core assets, such as its 20-state ILEC footprint and Latin American holdings.

“I think shaping the company to lean into our strengths is what the job is. And that’s what’s been happening with the divestitures, is making sure we’re positioning ourselves for growth,” she said. “The network of partnerships that we now have at a global level optimize our ability to deliver what customers need in an efficient way.”

Johnson knows investors have heard the transformation story before and are wary. But she said the goal she’s laid out of achieving revenue and EBITDA stability by the end of 2024 is absolutely “doable.” Every change Lumen has made thus far, from capital allocation to new hires to culture, is geared toward that target.

“There’s always going to be pressure to show progress between now and then – and I think we’re going to be able to – but no one can expect a complete turnaround of a giant company overnight,” she concluded. “These things take time.”


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