31 May - 6 June 2001

Let’s have a ‘frank’ talk

Melita Cable’s CEO (and self-confessed “company cheerleader”) FRANK LEITER has now been in Malta for the best part of six years. In this week’s “frank” exchange (pardon the pun), KEVIN DRAKE talks to The Cable Guy about success, opportunities, competition, the drawbacks of small refrigerators and the non-existence of Santa Claus.

Frank, for those of us NOT that familiar with you. Who is Frank Leiter?
Frank Leiter is a normal, down-to-earth kind of guy who grew up in the middle of Maryland in the USA. It was mostly farming country but the place where I grew up was for all intents and purposes an industrial town. My grandfather was in the retail business and he owned three large department stores. You could say that I was brought up in a family of entrepreneurs – a fact which probably gave me the drive and the desire to do things with my life that did not include staying in my home town for the rest of my life. I attended college in Washington D.C. for four years and once I’d tasted life in the big city I realised that I never wanted to go back and settle down in my home town.

What profession or direction did you decide to pursue at College?
At college I studied electronic engineering and was gearing myself for a probable future in the computers industry. Half way through the course though, a friend of mine advised me to take a closer look at what was happening in the telecommunications sector. This was in 1968. PCs weren’t even born then while the large mainframe computers were becoming obsolete. My friend began to tell me all about the cable television industry which was all the rage at the time. He was already working with a Cable TV company and promised me a job, once I’d graduated, if I were to specialise in that field for the remaining two years at university. I did just that and when I eventually graduated in 1970 I took him up on his offer. My first physical “move” was to Georgia where I went to be trained in the field and then on to Wisconsin where, within the first year that I was hired, I built my first cable system. There I was, out in the town, stringing cables, building the system. I was the engineer on the job and you could say that it was “Hands On” from day one. I suppose you could say that it’s been like that for the past 31 years too! (Smiles)

Was there any pressure from your family to stay on in the family business?
Actually my father had already taken a decision before me in that regard. His older brother was already in the family business so he preferred to persue other career opportunities rather than be in situations where eventual frictions were inevitable. Apart from that, large suburban shopping centres became the fad in the early sixties, taking a lot of the business away from the inner-town department stores. When the business began to slow down my grandfather decided to sell the stores.

Back to the Cables then. How long did you stay on “stringing” the cables yourself?
After a year or two out in the field I came back to the lab as an engineer with the main company. But I found that to be too claustrophobic for my liking. At the ripe old age of 22-23 I decided that the next step for me was to go into management. I was pretty lucky in that I found a small company just starting out in the Washington area. I was hired to put it together and to run it. Engineering-wise there was no problem whatsoever. The real challenge for me was looking after the office administration, setting up the billing system (which was all manual at the time). Learning all that on my own. I’ve done a lot of self-learning in my 31 years. I suppose its partly because I’m a very curious person. When I was younger I used to build a lot of things, or tear stuff apart and then put it together again. I once tore an engine apart to see how it worked! (Laughs) That was when my dad imparted words of great wisdom to me for the first time: “If it ain’t broke, don’t fix it!” I’ve always been mechanically inclined and I’ve always been curious.

Isn’t engineering, as a profession, extremely far removed from the management and administration functions?
That’s where I’m different. There are some great engineers out there but a number of them can’t function well at all if you take them out of the engineering context. I am engineering-inclined but at the same time I have a broader outlook on what’s going on around me. I like to look at the “whole picture”. When I was in the lab, when I was in the field, it was as if I was only looking at pieces of this “big picture”. I did get the feel of working with the people and working with the company, but rather than being one of the workers I wanted to be the manager – The guy running the show. I guess I’ve always been a “number One” kind of person, getting out in front. This was true of me even in my school days.

How does being a “Number One” person relate to also being a team player, or otherwise?
I’m very much a team player. I came to know very quickly, and at an early age, that I couldn’t do everything on my own. Obviously, in my twenties, I did try and, in the circumstances, I think I did very well. When you’re younger you have much more energy, lesser family restraints, you’re able to work seven days a week and basically you do whatever is necessary. I’m very much a hands-on person so I know my business very well thanks to what I have already (physically) done. I’ve even climbed telegraph poles with spiked shoes! I was one of very few engineers who would be willing to do that. It was also very scary! (smiles).

Are you a sort of person who feels that you have to be able to do everything yourself, at any level?
No. While growing up through the industry for over 30 years I’ve learnt how to do almost every job on my own. But then I also learnt very quickly that you have to have other people who are able to do the various jobs because you can’t possibly do everything on your own. This is especially true in bigger companies. In the short space of three years (four years since I’d graduated) I moved across jobs and across the country, ending up as Vice-President Operations of a large Cable TV company based in Miami. Here I learnt that “The bigger the company, the greater the responsibilities”. You learn very quickly how important it is to have capable people doing the various jobs. When I was just involved in engineering the equipment meant everything to me. It was the most important (and perhaps the only) consideration. As I grew up through two or three different management jobs I then began to learn that although the equipment was important, it needed people to run it. When you’re learning the different management skills you also learn that you need people and that you need good people. A particular management flaw that comes to my mind is the fact of not putting enough emphasis on the hiring of people.

In what way?
Too much importance is placed solely on a person’s qualifications. Different companies have different attitudes and different cultures. Melita Cable, for example, has an open, almost American culture built within it. If you cannot understand the inherent freedoms found within that kind of corporate culture, if you’re not comfortable with the lack of rigidity (a rigidity that you might have experienced with other companies), then you’ll be having problems. Some people do well in that sort of environment because they have the space to grow, others don’t. It is precisely because of these different cultures that you have to be very aware of the company’s attitudes and therefore hire people with those same attitudes. Although the hiring practice is immensely important, you also need to focus extensively upon the development role for the people you do hire. You must give people the opportunity to grow, otherwise they stagnate.
Were you given these opportunities for growth, or did you just up and take them?
I took! (Smiles) I was curious enough to ask all the right questions, I was entrepreneurial enough. I suppose that this was something I inherited from my grandfather. That, and a mentality I had with regards to him which was, basically: If he could do it then so could I.

What was it that drove you on mostly? Motivation or ambition?
A combination of many things I suppose. The right word I guess is entrepreneurship. I found myself, for the most part, going out for “young” jobs – In most cases fledgling industries and businesses where they were developing systems. I got into the right industry and I grew up within that industry. I also learnt most things on my own: Management, Finance, Marketing, Administration. All by just “doing”, asking questions, listening and learning over a period of 31 years. You asked me if I feel the need to do everything myself. Not now I don’t. Back in the first 10 years I did feel that way, because I was still learning. The last 20 years have changed me considerably.

Are you restless, in that you have a tendency to move around a lot? I see that this is particularly so in new areas.
The “new areas” are where the best opportunities are. In more recent years, apart from my jobs, there was a time when I was running my own companies. But when these weren’t making as much money as I would have liked, I felt that my efforts were being wasted. I decided to get back into the Cable industry and rebuild my reputation. As soon as I got in again I began looking for opportunities overseas. The cable system was more or less fully developed in the US. There were very few new opportunities left at home so I wanted to check out what opportunities existed in other countries.

How did you end up in Malta?
I was working with a placement firm and I interviewed three different locations, including Malta. Prior to that I also had some experience with the cable systems of Bermuda, Barbados and the UK, all of which were (including the UK to a certain extent) islands. Malta’s sun, sea and general environment, however, intrigued me. The English language factor was a big help too. I also looked at where Malta was vis-à-vis the development of its cable system. When I decided to move to Malta six years ago, it was obvious at the time that Melita Cable was having some difficulties from a marketing and sales perspective. The figures and the results were not as forthcoming as was anticipated earlier. I brought in a sales and marketing expert from the States and within that first year Melita grew 30 per cent to 40 per cent. 1995 to 1997 were tremendous growth years for Melita. Being fully developed we then started looking at the next business move which was going into cable data transmission and cable internet. We worked on that for about three years before launching it.

Were there any culture shocks involved when you came over?
Actually no. Although the one thing that affected me most dramatically was the business of small refrigerators! (Smiles). Most of the food you get here from the grocery stores is non-preservative (which I like) and only has a two to three day lifespan. But working most days from 8am to 8pm. I had to adjust my working schedules just to get food in the house! (Laughs). In the States with very large fridges and freezers you’d go to the store once a week or once a fortnight and stock up. But I guess I made a game out of it, looking for American products (and there are quite a few available) all over Malta, making mental lists of which stores stocked what and every Saturday morning doing the rounds. There are many great advantages living in Malta though. Malta feels and is very safe, especially for children. My own daughter joined me a year after I came over so that she could attend University here. She’s doing her second Masters in Maritime Law right now and is thinking about a Ph.D too. (Swelling with pride). Malta has the added advantage of being able to walk to places instead of driving. This has helped me also in a physical sense. Learning to drive here was interesting! (smiles) Especially so for a “Pro-Active, Aggressive-Defensive” driver. Malta is good place to live because it has a very friendly atmosphere. The slowing down of the pace I had to face in the US was very comfortable for me. I can go home and relax here, which is great. Living by the water is in itself very relaxing too.

How important is it to learn how to relax?
This is a very high pressure job so you have to learn how to pace yourself while still maintaining a high level of performance. What I learnt in my 20s, when I was not pacing myself, was that it is very easy to burn yourself out. What I learnt in my 30s was how to pace myself, how to take time off and relax. I now take time off to enjoy golf, scuba diving, flying (I’m a registered pilot), boating, sailing... Good stuff! (smiles).

Frank, you run what is considered to be a large company on a small island. Are there any particular advantages or disadvantages in that?
There’s a bit of both. I try to look at the positive side of things though. For the past 10 or 15 years the Maltese community has been experiencing what other places have been experiencing for 30 years. The growth in the cable TV sector shows just that. From 24,000 subscribers five years ago we’re up to 84,000 and still growing. Maltese society is experiencing, is learning, is discovering things at a very fast pace and it’s a really exciting time to be here. On the down-side I would have to include some of the business attitudes and corporate cultures which are not conducive to growth and innovation. In many cases, for example, “competition” actually means “I’m gonna kill you!” In our kind of business, bigger is in fact better because of the technology involved which costs millions and millions of Liri. You have to be big enough to afford it. The Maltese corporate community however, and to some extent the public, feel that Big is Bad and that if you get too big you’re a “Baruni”, you’re making too much money.

So what is that then? Institutionalised jealousy?
I think its just a lack of understanding the economics of business. As a company we’ve invested Lm30 million to date, and looking to invest at least that much more in our new projects. People have to understand that our business involves a long-term payback process and you need to invest a lot of money to get there. This means that there are also many risks involved for the shareholders. I come from a background where the culture is significantly different in that if someone becomes immensely successful or “big”, everyone else feels positive about it and hopes to do the same. Here I come across a bit of a negative attitude at times in the sense that Big is not good or that Big should share all that wealth out. It should be clear enough to everyone that big business creates jobs. Big business puts money back into the economy, it promotes the economy through chain reactions. If more people understood this better then they would look at the bigger companies far more favourably. On the other hand I’ve noticed that things are definitely changing. There’s a much better disposition towards the bigger companies. I suppose that this is because of the jobs that they’ve created and also because of the big companies’ image-consciousness and the “branding” exercises that they’ve undertaken.

You’ve given a pretty bleak view of competitive practices here. Why is that?
There seems to be a gross misconception regarding what competition is all about. I guess that over-protectionism has been partly to blame for that. Take this business of Sunday Trading, for example. In America this was never even a consideration. If you can you can, if you can’t, that’s your business. The more you work the more you earn. Getting back to telecoms and particularly Melita. This business involves the provision of low cost, high volume services. Our perception as a company has been to get the service out to as many people as possible even if that means lowering the income per capita. That’s the “setting”, so to say. Right now we’re in the thick of the telecommunications liberalisation process, which is OK, it’s fine. Thanks to this, we too are looking at opportunities in other business lines. What some companies don’t understand though is that there is the ability to share markets. When two or three competitors are operating within the same market, more often than not, many more resources are allocated towards marketing. When a great effort is made by all concerned in marketing and promotion, a greater demand is created. A bigger market can be created this way and there is definitely room for growth notwithstanding the competition. The mobile phone sector here is a clear case in point. There is a way you can share but you have to stop being over-protective and start being creative. Promote your business don’t protect it. Look for the opportunities. When I first came to Malta in December 1994 and saw thousands of aerials on the rooftops all over the place, my first reaction was: “Uh-oh!”. When the marketing consultant came over 6 months later and saw the same thing, his reaction was: “Great! People watch TV!”. A small shift in the way you look at things can make a big difference.

Do you think that there still are opportunities to be had in Malta?
Yes. People just have to expand their horizons. Business here may be tougher because it’s a finite market. But there are opportunities, especially for young people. When we started working on our data services no IT engineers were available. We took a conscious decision to start training people rather than importing the “know-how” and within two years we had 30 IT engineers of our own. In the process we’ve also lost four of them to big overseas companies such as AOL, Nortel and Cisco. This only goes to show that in Malta we have great people, great human resources. The work ethic here is very good. The Maltese want to work and are not afraid of working. This is very good and it is definitely an asset for the country when it comes to promoting Malta with potential overseas investors and businesses.

Back to you again. Are you an impulsive person or do you think things out carefully before deciding?
Using a Chess analogy. To do well I think you need to learn how to plan or move three, four moves in advance. It takes time to learn how to do that. In business I learnt that you cannot be impulsive. If, after a short period of time, you change a decision that you had taken impulsively, you lose credibility. People need stability, consistency and they need to be constantly motivated.

How good are your motivational skills?
I always like to look at myself as the coach and the cheerleader of Melita. (smiles). I like to think of myself as being the guy out in front doing the forward thinking.

Do you prefer having people who you can motivate around you, or do you prefer to have people that are self-motivated?
I prefer to have people who are self-motivated, and most of them are. Then again, everyone needs a kick in the “derriere” once in a while, including me. I am my own harshest critic so I will apply that principle to myself as well.

Do you think that it is important to take risks?
Here at Melita we widely promote the concept of accountability, especially with the managers and department heads. Part of this accountability “package” includes accepting certain mistakes as being part of the learning process. We encourage our people to move forward, to take acceptable risks, and, more importantly, to recognise their mistakes, learn from them, and move ahead. I suppose that I take risks all the time. Mind you, risks based on 30 years’ experience, intuition and “gut feelings”. Obviously, you can test things and ideas beforehand. That’s very important in that it reduces the risk factor as much as possible. You shouldn’t ever stop testing ideas – and then re-testing them again after some time. Circumstances change and so do the conditions governing them.

What do you think have been the main characteristics contributing to your success and, perhaps, success in general?
Many elements. I can start listing them. First of all you need to keep your feet on the ground. Keep the reality aspect always present because its all too easy to find yourself out of your league. Always ask questions, follow them up and then continue asking questions. Attention to detail is extremely critical. Too few people pay proper attention to detail and details. Be aggressive in promoting new ideas and moving your company forward. Never be content with achieving a little when you have the potential to achieve a lot. You definitely need a lot of common sense too. If I had to look at myself in this regard I think that I would use the word “hungry”. I was always hungry for opportunities. Hungry to do the right thing, hungry to have my companies become the leaders in their field.

What about luck and how this relates (if at all) to hard work?
I’ve always been blessed with good health so that’s luck as well I suppose. As for hard work, I’ve always wanted to work. Even at school, I never once played “hookie” (truant). You have to want to work and you have to feel that you are in control of your situations. You have to go out there and pro-actively seek the answers you need to run your area.

But what about the luck element?
There is luck, I guess, of the “right place, right time” variety. A lot of what passes for success cannot be attributed to luck though. It’s a matter of keeping your mind and eyes open and recognising potential opportunities. You have to look out for, and create opportunities.

What satisfaction does success bring? What regrets?
In my case the main satisfaction has been that the financial rewards have been good. It’s good to be successful and to be compensated appropriately for your success. The pitfalls that success brings are mostly related to one’s personal life. If you focus too much on your business and spend too much time working, it’s a great burden on your family and so the family suffers. That’s why I said it’s so important to pace yourself and to balance things out. Part of the “balancing act” is spending time with your family and kids, being aware of what is happening around the house and so on.

What’s the best piece of advice you’ve ever been given
One that sticks to mind from my youth was: “There’s only one thing we give out free and that’s our breath... And we pull that one right back in again too!” (laughs). That hit the right spot in a lot of ways. It made me think about prioritising, about giving away time, giving away services. Basically I suppose it tells you that there’s a price tag to everything. But, at the end of the day, if you work hard you’ll be rewarded. One of my all-time favourites though definitely has to be “There is no Santa Clause”. What does that one mean? Lots. There’s no free ride. Keep your feet on the ground. Always stay within the realms of reality.

And then, of course, there’s the “If it ain’t broke don’t fix it!”
(Laughs) You got that one right!