AOL Insider

Seated casually in the Wyndham Hotel lobby, Mary Foley doesn’t look like a high profile corporate executive. Instead, she looks more like a casual afternoon shopper. Of course, Foley can look any way she wants. As an insider who experienced the wild ride of America Online’s explosive growth from a humble start-up venture to a giant Internet Service Provider with more than 12,000 employees, she has that luxury. Especially since when she left in 1999, she took millions of dollars in stock options with her.

Fresh out of college with an industrial engineering degree in hand, Foley joined Quantum Computer Services as a customer service representative. The little-known ISP evolved into the World Wide Web giant, AOL. Foley grew with it, rising through the ranks to call center manager, then corporate trainer.

After she left the company, Foley spent two years chronicling her roles and experiences with AOL. She was in Cleveland last month as part of a 16-city tour promoting her book, “Bodacious: An AOL Insider Cracks the Code to Outrageous Success for Women.”

SBN Magazine sat down with Foley to learn, among other things, whether AOL was the result of innovation or was innovation a product of AOL.

What attracted you to Quantum Computer Services?

I had a driving factor – pay the bills. But once I was in, there was a certain kind of contagious enthusiasm. I noticed people really jived, so to speak. They were casually dressed and there seemed to be something more there – it was an intuitive, gut feeling.

Steve Case let us in on his vision, which was, let’s bring on line services to the masses, make it easy to use, graphical, affordable and useful. In 1995 the idea got on the map. People started using e-mail and then the World Wide Web. It was exciting and nerve racking at the same time.

Was Quantum’s evolution into AOL a progression or a leap?

It was a leap. In 1988, we had one online service, Quantum Link – a joint venture with Commodore Business Machines. We were about to launch two more, one with Apple Computer and one with Tandy from Radio Shack. [At that time] Internet service was linked to the type of computer you had. But the partnership with Apple was very restraining. We wanted to do things much faster.
In 1989, Apple got out and we launched a new service called Apple Link Personal Edition. It was our first online service without a partner. This is what became America Online.

Why did you limit yourself to partnerships initially?

Personal computer hardware had to get to the point of having enough horsepower. Processor speeds were very slow at the time. Prior to 1993 when Windows 3.0 came out, computers weren’t easy to use for people who didn’t quite understand MS DOS, root directory and all those commands you had to type in.

It wasn’t until 1993 that the vast majority of home computer users had something to work. We knew Windows 3.0 was going to be coming out and Microsoft asked us if we wanted to write software for the operating system. We wrote software to be compatible and when Windows 3.0 came out, we were ready. That’s when the volume of member users skyrocketed. You see, Steve Case had a vision and we just had to wait for the hardware to catch up.

Did the price still prohibit massive use?

Modems at that time were considered peripherals. People would pay $200 to $300 for a modem in addition to buying the computer. On top of that, there were monthly charges and hourly rates. If you just wanted to try this new concept – going online – it wasn’t cheap. It took time for that barrier price to come down.

What was AOL’s biggest challenge after Windows 3.0 was introduced?

Aside from the hardware issue, we needed content that was engaging. It had to be stuff we could use and it had to make sense. We questioned, why would people look up the weather or sports or buy tickets on line? So our goal was to find out how we were being used and what was driving the market.

We determined the top two things people did and both centered on communication – that very human component of wanting to talk.

The number one thing was chat, what we now use as instant messages or conference rooms. The second thing was to transfer files and e-mail. All that other content was used but those were the two driving factors to why people wanted to use AOL.

When I look at it from a historical perspective, we went from being driven by technology – computer hardware, modems, graphical user interface stuff – to what can I do with the online service? What am I going to use it for every month? And that’s really where the power is.

We had to create a lot of the platform, grease the skids, lay the railroad tracks for the other stuff to happen.

When did AOL jump from being a player to a leader?

In January 1993, when the AOL version came out and we saw the reception, we were thrilled. We were about 300,000 members. In August of 1994, we hit a million. It was definitely a switch in speed. We were already on the fast track in terms of how we operated. Between 1994 and 1995 we had hyper growth – a whole other definition of growth.

What was your role during this growth period?

I started in customer service, getting people connect to on line services. Then I moved to training people to do that kind of job. In 1994 I took the newly created position of call center manager, a time I call my crash-course in leadership.

In 14 months, the call center grew from 70 to 250 reps working seven days a week, 24 hours a day. I wasn’t a high-level executive but I was solidly edging towards the top of middle management.

In June of 1995 I went into human resources and started a corporate training group. We had grown from 120 employees to 1,200. When I left in 1999, we were at 12,000.

When you go from 1,200 to 12,000, it’s a different type of growth, a different magnitude in terms of impact on the company. It was a new industry, new type of speed, and we didn’t have a lot of the things you would think a company our size would have – policies, structure. It was a very skeleton operation in human resources. We didn’t even have an overall compensation plan or a full-blown orientation for new employees.

Were you preparing AOL for the rapid growth or trailing the growth with training programs?

I wanted to influence the culture so I focused on manager training. The tricky thing was trying to influence the infrastructure, processes, procedures and policies without trying to impede the organization’s growth. We used to joke that we were trying to build an airplane while it was flying at 30,000 feet.

One of the first things I did was create a really robust orientation program. People could come in on the first day and be told who we were as a company, how we were organized, what our goals were. New employees didn’t have to go to their managers on the second day and ask those questions. They already knew. And we needed them to jump in and get going as soon as possible.

My next focus was training the managers.

What was more difficult – 120 to 1,200 employees or 1,200 to 12,000 employees?

They were difficult and exciting in different ways. Growing from 120 to 1,200 employees was a hard, slower growth. Money was much more precarious in that way. We were trying to create the market place. We didn’t have as many people in the market place, consumers as well companies that really got what we were talking about. So we had to really believe in our vision.

The 1,200 to 12,000 growth, in my mind, was the most satisfying, the most fulfilling and the most exciting. I was at a point where I could contribute in more significant ways and see what I did influence the company.

Was there any time that the rapid growth hurt AOL?

In late 1996, AOL, along with the Microsoft Network and Prodigy, went to flat-rate pricing rather than an hourly rate. That brought AOL to its knees. We did the marketing and the forecasting. We knew about how many new people would like to come on. We considered existing members that would want to stay on longer because the clock’s not ticking, and new people trying AOL because the cost of trying it was a lot less. Then, in early December, six weeks after going flat rate, we had 37 attorneys general suing the company on behalf of people in their state who could not get online. So many people wanted to try it out that the system got over loaded.

What was AOL’s action plan at that point?

We stopped all promotional marketing. We did TV spots telling people what we were doing – trying to get new modems added, leasing lines, enhancing our capacity. There was no historical precedence for this type of growth and we really didn’t know how big the untapped potential was because there was no online service at this level before us.

Critics of the company said AOL was done. They said the company would never be able to recover from this. We said, “No.” We didn’t get this far to let this stop us. The fact that we had 37 attorneys general suing us meant that we had gotten to the point that people were thinking of us like a utility, something they had to have.

How did AOL stay afloat when public criticism was weighing it down?

It was a very big rallying time, a focusing time. Everything we did, even in human resources, was directed at supporting the effort, getting us back to where we needed to be. We had about 6,000 employees at that time. A lot of time was spent ordering hardware, installing it, and making sure we had people to do the technical work. We also increased our hiring efforts on the customer support side.

In a growth environment, how did you keep people calm, motivated and moving in the right direction?

The fact is, you can’t control when people call, what they ask or how often they call. It feels like you have no control over the situation. Customer service reps just kept picking up the phone, call after call. People had the attitude that, we can’t control anything so we’re not going to even try.

But you can’t control a department like that. What I did was a bit against the tide at the time. I said no, there are things we can control. And the things we can control, we will. I needed to add some structure so the reps could be the best equipped they could possibly be when the customers called. Then we adjusted and responded as needed.

To start with, I put stakes in the ground. I made sure people got their breaks so they didn’t get burned out. We had team meetings every week, no matter what. People needed to find out the latest news, have time off the phones, share ideas on dealing with customer problems and just refuel.

What HR problems resulted from AOL’s initial growth?

Attendance and tardiness was a problem and both are a high priority in a call center. You’ve got to be there on time because everything is measured in 15-minute intervals. We tracked many customer service aspects and if someone walked in 15 minutes late, that mean that three or four customers had to wait in the phone queue for service.

At first there was some push back because people were being held accountable. And customer service reps were not the only ones. Supervisors were also held accountable for making sure people had breaks and attended team meetings.

We did increased supervisors role in coaching too. They listened in on a certain number of calls, brought the reps in and gave them feedback.

Did coaching and training ease AOL’s growing pains?

Over time the mood changed. People realized what we had to do and listened. People started carrying their weight. They were much more proactive, sharing solutions with each other.

Fourteen months later, I moved to human resources. It was announced in a meeting and there was a standing ovation. I had to choke down a few tears. What it said to me was, we liked you as a leader, in some ways you gave us our respect back and we made huge accomplishments because of that. When I left the department, it was more organized, more structured. My focus was, we have a responsibility to this company.

I was 29 at the time and most of the staff were men. Half of them were older than me. To get that recognition just overwhelmed me.

What are some of the lessons you share in your book?

I targeted the book to women but have been told most of it pertains to men too. One thing I talk about in it is the good girl coding we get. We’ve all been raised with the focus on pleasing others like be nice to everyone all the time.

Taking over as call center manager, being a good girl wasn’t going to be effective. Your goal can’t be to be liked by everyone. You’ve got to take the risk that some people are going to think you’re a real jerk. But you have to stay on course anyway.

Anytime you put a stake in the ground, you’re going to get a reaction from people. Particularly if you’re holding them accountable for some kind of behavior. You’ve got to be comfortable with making other people uncomfortable.

There’s a big aspect to being bodacious – you’ve got to look within, look at the good girl and challenge some of those assumptions. I like to be personable but I don’t’ take things personally. I’m willing to say this is what I want, this is how I want it and if you don’t’ agree with that, that’s OK. What we can’t do is violate the sense of who we are just so everything stays smooth.

Were you surprised at the dot-coms crash in 2000 or did you see it coming?

It seemed to me, people were just throwing money at ideas. It was so contrary to my experience at AOL. We had a good idea, but we had a business plan and we flushed it out. With AOL, it wasn’t like we had an idea, added some money and puff, you got something. It was a lot of tenacity, a lot of thoughtfulness, continually watching the environment, the market, the competitors.

At AOL, we weren’t in the green until 92. Quantum started in 88. That was seven years to green. Even after it went to the stock market, there wasn’t a guarantee.

What did AOL do differently than the faltering dot-coms?

It was a combination of running less like an Internet company and more like a business. It was definitely entrepreneurial in that the whole concept was new. Even the way we operated as a business wasn’t typical.

We didn’t look like an IBM, not only from the way we dressed but the way we operated. We didn’t assume things had to be done in a certain way. But we dreamed big.

We got funding. And we had to go back and get more funding. We had to prove what we had done so far and show why people should invest in us. The venture capitalists back then were much more thorough, more realistic. When you look at the whole dot-com craze you realize it was a craze. We knew we had to show what we were worth along the way.

What do you see as the next technology wave to crash into industry?

I think it’s somewhere in the biotech and pharmaceutical industries. The whole human genome project, making drugs that are specific to you, customized to you, that’s where I see a lot of focus and research. I see some of the same vision in this area that I experienced at AOL. People are saying, what can this do for human kind rather than let’s get rich quick.

What drives Steve Case?

He’s very laid back, kind of a quiet guy, friendly to talk to. But when you talk to him, you get the impression there’s a lot going on inside his head.

It’s not natural for Steve to be in the public spotlight. He did a khaki commercial once, a print ad. That’s kind of what he’s like, khakis and rolled up shirtsleeves. He does like to talk about the industry, but when he talks, it’s not as Mr. Salesmen.

Steve is very well read and very much a thinker. He was a huge e-mail fan. He’s also really good at synergies, how things come together. When he started in the business, he started from the marketing point of view.

When you left AOL in 1999, what was its biggest weakness?

When you get to a physical size of thousands of people, you can lose the entrepreneurial aspect that made you so great in the first place. I don’t think there’s any expectation within the company that it’s going to be the same environment as it was in the ’80s and early ’90s. But what you don’t want to lose is some of the risk taking, the new idea generation, innovation and the focus on what the customer experience is.

When you get to the size that AOL is now, things like politics can start becoming really huge. Even to the extent that you can squash some of the things that made you a success. People are not willing to be innovative because the risk is too high. I think this is the company’s biggest weakness and the thing they’ve got to struggle against. Its weakness, in some ways, is also its strength – it makes it hard to have a culture of innovation at every level.

?Did innovation drive the culture or did the culture drive innovation?

Growing the business, growing the market, getting more customers and keeping them on line longer drove people and decisions. If people stayed on longer, they saw more advertisements or maybe shopped more on line. It was really about how do we grow this thing.

By having that mentality, everyone really benefited. We really kept the main thing, the main thing. I think I enjoyed it because there really wasn’t a lot of muck.

Like any other start up, when you don’t have a lot of money you use stock options. AOL did stock options based on performance and everybody was literally an owner in the company. Everybody wanted it to work and did their part to make it work.

When I left, there were more layers, a greater distance from what you do to the bottom line. That made it harder.

Why title your book Bodacious?

Bodacious means bold, gutsy, remarkable, outstanding, audacious, not afraid to put stakes in the ground and say, this is how it’s going to be. For me, it became this positive spirit of not being afraid to make choices to achieve success, whether in my personal life or my career.

When I started realizing the good girl was holding me back, I knew if I wanted to have success in my career I was going to have to get comfortable with taking chances. And I did.