As we've seen in the current race for president a very thin line exists between confident arrogance and badly spoken blowhard.
It take a special type of personality to pull off the mix of boxing promoter, over-the-top carnival barker persona that T-Mobile (NASDAQ:TMUS) CEO John Legere uses to push his brand forward. To make it work, you need to not only be able to boast in a credible way, but deliver on those boasts more often than not. It's a very successful character (both in politics and business) but it's a recipe for disaster if a CEO without the right mix of bravado, wit, and likability tries it.
Legere can be boastful and brash in a way that most business executives simply can't get away with. The line is in a different place for him than it is for his rivals. It's similar to the way that Eminem can say things that maybe Josh Groban can't. One has built up a level of credibility that protects even his most outrageous statements while the other simply does not have that.
In the mobile space Legere can attack his rivals, swear, and pretty much use any words he wants. Even if he veers into the offensive, the CEO's personal brand gives him some insulation (like a certain orange presidential candidate). The other CEOs in the sector can't do that and AT&T and Verizon's bosses generally stay above the fray because when you're winning, there's no reason to get down and dirty.
Sprint (NYSE:S) CEO Marcello Claure, however, has sometimes fallen into the trap of thinking that he can act like Legere. It's a bad fit -- like Bernie Sanders quoting N.W.A. lyrics to back up his message on social injustice. The intent might be correct, but the actual results turn out disastrously.
What did Claure do?
In the way that Legere takes the fight directly to his rivals, Sprint's CEO tried to do that to T-Mobile. To make that happen the company ran a now-pulled ad which Claure shared on his Twitter feed which showed the CEO talking to a focus group about their thoughts on the various wireless carriers. Of course, what could have been innocuous went terribly wrong when the spot cut to a woman saying "the first word that came to my head [when thinking of T-Mobile] is 'ghetto.' That sounds, like, terrible."
Ghetto, at least in this implied context delivered by a prim and proper-looking white woman, is not a word people should toss around lightly and it's not one that Claure can get away with being associated with. Legere maybe could have pulled it off, simply because his character comes with an implied level of outrageousness. The Sprint CEO could not and he had to delete both his Tweet promoting the commercial and the ad itself.
The remarks were followed by a lot of giggling and since it was the only comment in the ad, it's hard to see how Claure or his team missed the implication. Instead, it's pretty obvious that they went for outrageous and instead delivered unpleasantly offensive.
What was the fallout?
The good news for Claure and Sprint is that this was really more of an egg on their face moment which showed how tone deaf they are rather than a real scandal. Legere -- who knows how to let his rivals trip over their own feet -- simply let the moment stand for itself.
What's the business impact?
While this has been more embarrassing than damaging for Sprint, it shows the company needs a better strategy than trying to copy what T-Mobile does. Both companies offer lower prices than what Legere calls the Duopoly, but that's where the similarities should end.
Claure is not going to win the attention battle over Legere. It's simply not his personality or his strength. If Sprint wants a piece of the T-Mobile magic, it needs to find its own unique differentiator from its more expensive rivals. Trying to copy T-Mobile and offering a 50% off plan -- which is not actually 50% off -- simply won't work.
Sprint needs an identity beyond being the lesser of the two low-priced carriers. Claure might be able to give it one, but he needs to do it in his own way, not as a bad copy of his much-more-personable rival.
Daniel Kline has no position in any stocks mentioned. He thinks Claure could turn Sprint around, but worries that he is running out of time. The Motley Fool owns shares of and recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.