When Larissa Herda became CEO and president of tw telecom inc (formerly Time Warner Telecom Inc.) in 1998, only one year after joining the company, she had never taken a finance class or examined a balance sheet. Though she was not a traditional choice and she questioned her own qualifications, she decided to take the job, relying on her intellect, work ethic, sales skills, and compassion for the employees to move the company forward.
At the second annual Daniels Fund Ethics Initiative at Colorado Law Lecture on September 3, 2015, Herda expounded upon her leadership style as one of humility and humanity. Throughout her career, she has always prioritized building relationships with employees, an attribute to which she credits much of her success in business. A graduate of the University of Colorado Boulder (Political Science ’80), Herda oversaw the expansion of tw telecom’s broadband network footprint from 17 U.S. markets to 80 and drove company growth from $26 million in revenue to nearly $1.6 billion.
Throughout her career in the telecom industry, Herda witnessed many unethical practices and instances of corporate dishonesty. She spoke about the accounting fraud, and ultimate bankruptcy and imprisonment of the CEO of WorldCom in the early 2000s. Throughout her tenure, Herda remained committed to doing things the right way and tuning out the dishonesty occurring around her. She emphasized the importance of making ethical business decisions, noting that the long-term rewards of ethical behavior vastly outweighed any short-term gains from partaking in questionable practices.
As a new CEO, she recalled the company culture as one of anger, stress, and disrespect. “I didn’t like what I saw,” she said. By building relationships with employees, “we went from a culture that was abrasive to one of the most loved cultures,” she said. She attributed this shift to her willingness to talk to employees “like people,” even when there was bad news to share, and not being afraid to be vulnerable in front of staff.
“Knowing how to connect with people is the single most important factor for success in business,” she said, recounting the many emails she sent employees addressing company concerns, personal anecdotes, and requests for feedback. “I wanted the employees to know what we were going through—the good, the bad, and the ugly.”
In the wake of the 2001 telecom bust, Herda had to lay off 3,000 employees, a decision she did not take lightly. She recalls crying on the conference call when telling employees the news. Convinced that showing emotion would be perceived that she was not strong enough to be CEO, her worries were subdued after receiving emails from staff reassuring her they would be okay and thanking her for her genuine concern.
“People just need to know how you feel. That is the core of authenticity,” she said.
She recalled how feeling demoralized by her previous bosses propelled her to build a company culture based on kindness, transparency, and trust. However, this did not always mean she presented herself how others expected a CEO to behave.
“I was not a polished CEO,” she said with a laugh. “I told it like it is, and developed a relationship with employees where they trusted me.”
The most important factor to success in business, she said, is to lead with your heart and genuinely care about your employees.
The lecture was moderated by Colorado Law Dean Phil Weiser and Brad Feld, managing director at Foundry Group.
About Larissa Herda
Larissa Herda took the helm of tw telecom inc., formerly Time Warner Telecom Inc., as CEO and president, on June 19, 1998. She was elected chair of the tw telecom inc. Board of Directors effective June 2001, and held the title of chair and CEO until November 2014. Herda served as the company's senior vice president of sales and marketing from March 1997 until her appointment as chief executive.
Herda led tw telecom to grow from $26 million in revenue to nearly $1.6 billion. Under her leadership, the company expanded its broadband network footprint from 17 U.S. markets to 80; built a national IP backbone recognized as one of the top 10 most connected IP networks in the world; introduced comprehensive data, voice, Internet and national Ethernet products; and made three acquisitions totaling over $1.2B. Since becoming chair and CEO, Herda raised more than $8.5 billion in the public and private debt markets, including a $290 million IPO. Herda completed the sale of tw telecom to Level 3 Communications for $7.6 billion in November 2014.
Daniels Fund Ethics Initiative Principles
Integrity Act with honesty in all situations
Trust Build trust in all stakeholder relationships
Accountability Accept responsibility for all decisions
Transparency Maintain open and truthful communications
Fairness Engage in fair competition and create equitable and just relationships
Respect Honor the rights, freedoms, view, and property of others
Rule of Law Comply with the spirit and intent of laws and regulations
Viability Create long-term value for all relevant stakeholders