Executive Insights Q&A With Bill McKell, CEO, Horizon

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Meet the CEO of an Ohio LEC who believes in investing for the future in fiber AND the company’s team members.

Horizon, with headquarters in Columbus and Chillicothe, Ohio, is a premier provider of advanced broadband services throughout much of Ohio and into surrounding states. Utilizing its extensive network of fiber optic cable, Horizon delivers advanced high-speed data services, Internet, voice, digital video, and security and monitoring services. Horizon’s entrepreneurial heritage and long-standing commitment to remarkable customer care ensures a partnering relationship with its customers using cutting-edge technology.

Watch Horizon CEO, Bill McKell, discuss the myths of being a CEO, what is needed for fiber to meet the needs of 5G sooner than later, and much more. Then be sure to check back on December 1st to read Sharon Vollman’s exclusive Executive Insights interview with Bill discussing the future of the ICT industry and how to remain agile among today’s network challenges.

Topic: The Future
Sharon Vollman / ISE: How do you see the ICT industry changing in the next 2-5 years?

Bill McKell / Horizon: I believe in the next 2-5 years we will see significant investment in extending fiber services to both commercial and residential customers, followed almost immediately by more consolidation. Several years ago, everyone in the industry was predicting that significant consolidation among fiber providers would be occurring now as larger operators bought up smaller regional operators. We’ve seen a little bit of that, but not what the metro fiber industry expected.

What the market failed to fully understand was that the need for fiber bandwidth was still exploding. This explosive need caused two things to change the market. First, the large operators were overwhelmed with their own efforts to meet demand in the markets they already served and to integrate the acquisitions they had already made. Second, private equity investors recognized the growth opportunity this demand created for regional providers. This meant that more regional providers were acquired by equity providers than by larger operators. Now, those regional providers have the opportunity to meet bandwidth demand by extending their own networks deeper into their own regions both by growth and by consolidating isolated local assets and operations. The industry consolidation of larger operators buying smaller operators will still come, but not until the regional providers have filled in the “holes” in their regions where fiber-based bandwidth is still in demand.

Topic: Change
For the last 123 years, Horizon has been providing telecom services to Southern Ohio. Founded in 1895 as the Home Telephone Company, the organization has grown to deliver voice, video, security and broadband to its 14,000 residential and business customers. Recently, Horizon has been acquired by the Canadian private equity firm Novacap.

ISE: How will that change things for you, your team, and also create network transformation opportunities?

B. McKell: Our mission is clear: partner with our customers to provide them a high-reliability network for their data transport needs that offers peace of mind and reflects our Good Neighbor core values.

In some cases, that may mean bringing fiber to customers who don’t have access to it today. In other cases, that may mean providing fiber-based alternatives to customers who have a need that can’t be met by existing providers. For example, those of us building networks from scratch have the opportunity to make sure fiber counts meet the bandwidth needs of a 5G-and-beyond world, and to make sure the necessary redundancy is in place for the essential services of today and tomorrow.

Topic: Network Challenges
ISE: What is the greatest challenge Horizon faces in terms of its network and the people making it work effectively?

B. McKell: How to grow prudently. We have so many opportunities in front of us, that we have to decide wisely which to pursue first and then how to implement as many of them as possible simultaneously. This is going to require the greatest team effort possible. We need to build fiber in new markets and continue to serve current customers, all while connecting acquired assets and maximizing merged operations. This can happen only with the right teams and team members in place.

Topic: Agility
ISE: A business needs to run two models simultaneously. One optimized for today, and one optimized for tomorrow. How do you do that well without neglecting one or the other?

B. McKell: Fortunately, the most important component of each model is the same: people. If you have the right people in place to maximize the operations of today, then you have the right people to also be optimizing it for tomorrow. The key is making sure that everyone shares the same vision. Some employees will be working on accomplishing current goals, others will be focused on future opportunities, and many will be dabbling in a bit of each. As long as they all know today’s needs and tomorrow’s vision, they can be supportive of one another and of the company’s efforts.

Topic: Change
ISE: How do you embrace change?

B. McKell: Embracing change requires vision and the means to convey that vision. I am a storyteller by avocation. Storytelling involves using words to create images. A good storyteller inspires audience members to visualize the story as it unfolds. Each audience member becomes a part of the story. Likewise, a good leader is able to convey a vision in such a way that the employees see themselves as parts of that vision. If the leader can effectively convey the reasons for the change, can meaningfully evoke enthusiasm for the organization’s opportunity and can sell the viability of the goals, change will be embraced.

ISE: If you could change one thing about Horizon, what would it be?

B. McKell: The thing I would like to change most about Horizon, is to find a cost-effective way to deliver fiber-to-the-home in our legacy service area. We’ve been able to do a little bit of fiber-to-the-home service, but we continue to have difficulty justifying the cost to, in essence, overbuild ourselves. I’d like to find a way to make the economics work so we can provide our residential customers with the same premium service we are able to provide our enterprise customers.

Topic: Accomplishments and Mistakes
ISE: What is the most stellar accomplishment in your career?

B. McKell: Selling the company to Novacap. Our shareholders were faced with the difficult dilemma of having an investment that had gained much value but having no way to realize that value. As a growth company, it no longer made sense to pay a dividend. As a private shareholder company, there was no way to trade those shares without a significant reduction of value. The company needed growth capital but had a shareholder base unable to add equity to the business.

We were able to run a process that resolved those challenges in the best way possible. The shareholders were able to receive far greater value than they had expected. The company now has the capital it needs to effectively grow the business in a very exciting sector. Our customers, employees, vendors, and communities, face no negative disruption. And our new owners have an attractive growth platform. It truly is a transaction in which all parties win.

I wish I could take the credit for it. Our team — the leaders who helped create the vision and those who executed it — built a company of significant value. The credit also goes to Novacap for having the vision to position Horizon for an exciting future and for acting on that vision.

ISE: What is a mistake you learned the most from during your many years of experience in this industry?

B. McKell: Horizon began as a local telephone company. We still provide residential voice, video, and data services, in and around our hometown of Chillicothe, Ohio. When I stepped into my current role 13 years ago, we held a board retreat to determine the direction for the company. We recognized that the future of our legacy business was challenged. When you have 100% market share, there’s nowhere to go but down. We also recognized that universal service revenues were at risk.

We decided at that time to use our fiber optic expertise to extend our network into surrounding counties. After several projects successfully stretching the network into 12 additional counties, we ended up with a BTOP grant to extend the network into 21 more. It was a very large project, with a number of unexpected requirements.

Unfortunately, we found ourselves over budget at precisely the same time we experienced a significant reduction in our universal service funding. Together, this created a perfect storm scenario for us. We were within sight of the goal line, but unable to make the yardage.

Fortunately, our lender, CoBank, recognized the potential in what we were doing and worked with us to find a solution. Our employees, vendors, and even some of our key customers, worked with us to find creative solutions as well.

Through this, we learned the importance of partnering with the right people and organizations, we brought in valuable industry expertise, we refined our risk management process, and established better project management procedures. Interestingly, many of the weaknesses that “storm” exposed have now become some of our greatest strengths.

Topic: Balance
ISE: How does Horizon encourage its employees to find work/life balance?

B. McKell: We are a family business. While we may no longer be family-owned, we are still a business that is family-focused. First, we employ a number of families who take pride in multiple family members working for the company. Second, we care about our employees’ families.

Our salaried employees have the flexibility to modify their work schedules and locations to better accommodate their families’ needs. Parents have flexibility to attend their children’s academic and athletic events during work hours and make up the time in other ways. Employees are able to work from home or on the road if that helps them better support other family members.

Hourly employees are unable to have the same flexibility due to the scheduling nature of our business, but we work to be accommodating by creating and modifying schedules to meet their needs.

 

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About Author

Sharon Vollman is Senior Vice President, Editorial Director of ISE magazine. She oversees all editorial processes and staff for ISE magazine, the ISE e-newsletter,www.isemag.com, and leads the educational content development for ISE EXPO and several events. Vollman has created educational partnerships with the major communications and entertainment providers including AT&T, Verizon, CenturyLink, Frontier Communications and Cincinnati Bell. She has covered the telecom industry since 1996, when she joined OSP magazine as editor. Prior to that she worked in advertising with Ogilvy & Mather and CME. Vollman has a bachelor’s degree in journalism/advertising from the University of Iowa.

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