Zayo’s priority for “integration”, ironically, became “de-integration”. We wanted to retain the concept of Zayo Bandwidth being a tightly-focused entity whose sole purpose is slapping up bandwidth. Therefore we had to split apart the other two entities into their own business units. Both of these had to stand on their own two feet. Both had to have their own tightly-focused business plan.
So de-integration is what we did, and today we have 3 completely independent business units. I want them all to have their own bank accounts, balance sheets and statement of cash flows. Only then will we have true P&L accountability.
Investors liked this. But, then again, they couldn’t help their venture capital bias. “When are we gonna sell these other businesses?” was the knee jerk reaction.
I am not being critical. I understand where this is coming from. It’s like the game of Monopoly. Should we trade Boardwalk for Marvin Gardens + three railroads? The dilemma is that I am at a phase of my career where I want to be involved in multiple businesses.
It is in this context that I came across the Tyco article and the quote, “What weaves them together is the operating culture.”
Arguably, Zayo is more like Nike than Tyco. Zayo is defined around telecom, which is narrow enough so that it wouldn’t be viewed as a conglomerate any more than Level 3 or AT&T. Nonetheless, from a venture capitalist’s perspective, the concern is that we are not sufficiently focused by start-up standards.
As a result of two of our acquisitions, we ended up with two additional business units—Zayo Managed Services and Onvoy Voice. Zayo Group was formed as very small corporate group that brings together the three autonomous business units. Certainly all three entities are telecom/Internet companies—but they are very different from one another. It is my intent to see all three of these units prosper within Zayo Group indefinitely; it is also my goal to see us add additional autonomous units.
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