Having established one of the world’s most successful brands, the famously hippyish Hans Snook is leaving Orange to concentrate on businesses of a more bohemian nature: alternative medicine and new age therapy.
Can the visionary Orange chief executive Snook do for these industries what he did for mobile telephony? He turned a brand in what is essentially a nerdy, technology-based and complicated business, into a sexy, emotional and easily understandable offering.
But some industry insiders believe Snook is a master self-publicist who is wrongly credited with creating the Orange brand, a misconception that has arisen from the close association between Snook’s personality and the Orange brand. Like Branson and Virgin, Snook’s personality and Orange seem one and the same.
Now, at 52, Snook is a multi-millionaire and has recently split from his wife of 22 years. He pocketed an estimated £45m when Germany’s Mannesmann acquired Orange a year ago. Vodafone subsequently acquired Mannesmann and sold Orange to its present owner France Telecom.
No one would expect Snook to do anything conventional with his cash; he wears a trademark leather jacket to black tie events and City meetings, and talks openly about colonic irrigation.
The German-born, Canadian-educated Snook left his hotel management career at the age of 35 to go backpacking with his Chinese/Canadian wife. After six months of travelling he stumbled into telecoms via a Hong Kong company which was subsequently acquired by Asian conglomerate Hutchison Whampoa.
Details of Snook’s plans after Orange are sketchy, but he says: “I have always had wide interests but have never had enough time to focus on them.
“Now Orange is with France Telecom, it has the resources and international footprint it needs to fulfil its potential. It also has the team and momentum to do so. I therefore feel able to make a change, without losing touch with what interests me most in Orange.”
His “wide interests” include Feng Shui – the Chinese art of arranging your environment to release energy – developmental psychology; philosophy; alternative therapies such as homeopathy, colonic irrigation; and nutritional theories such as fasting.
Aside from being free to develop personal projects, his new role as special adviser to the Orange board will allow him to create Orange-branded ways of turning mobile phones into personal assistants that can provide services for many aspects of life.
An Orange spokeswoman says: “Most of his [Snook’s] other interests relate to or potentially can relate to wirefree, for example alternative medicine, remote health monitoring and holograms. Some of these may tie in with Orange.”
Snook believes the brand has the potential to become a major Internet player. Orange World, its global Internet strategy announced in July, created a range of web-based services including banking, health, travel and entertainment, giving a glimpse of Orange’s bright future.
If Snook does launch his own pet project – as long as it’s not opening a colonic irrigation farm, according to one analyst – he can be confident of City backing. The analyst says Snook would have no problem raising £50m of venture capital, even in this subdued market.
While some City analysts say the loss of Snook is disappointing for Orange, others claim it will not necessarily damage the company, because its success was not down to him in the first place.
WestLB Panmure analyst Benedict Evans says: “Not a great deal of Orange’s success is attributable to Snook – it is down to Hutchison and Snook’s subordinates. For example, the brilliant marketing was not necessarily his brainchild.
“Snook is a very good self-publicist within the business pages – wearing leather jackets, boot string ties and talking about colonic irrigation makes us public school boys in the City giggle a lot. But it hasn’t got a great deal to do with Orange being successful,” adds Evans.
But an Orange spokeswoman says: “Hans’ contribution was enormous, but behind his skill and expertise there are a great many creative people who also have their contribution to make.”
Snook is widely – and wrongly – credited with creating the Orange brand, according to the man who claims to be its creator. Doug Hamilton, executive creative director of brand consultancy Wolff Olins, who now works exclusively for one of Olins’ biggest clients, Hutchison Whampoa, says: “History is written by the winners: the people most associated with its successes are its authors. By the time he [Snook] turned up we had already created the Orange brand and worked out its positioning.”
Hamilton credits Chris Moss, the then marketing director of Orange; and Rob Furness, then head of communications for the brand’s creation and values. He also credits the contributions made by WCRS chairman Robin Wight and Nigel Long, who was at WCRS at the time and is now chief executive of Partners BDDH.
According to Hamilton, the Orange positioning, name and visual identity were created by himself around the idea of “future positive”. At that time an emotionally appealing brand was a radical move for the telecoms sector.
Hamilton says when Snook came on board in 1994, he contributed a different skill: “Hans saw what no one did. We were struggling to get people to say Orange was not a daft thing to do but a really sensible thing. Hans said it was wonderful and brought the rest of the team along.”
Snook’s enthusiasm helped secure the backing of Hutchison group marketing director Canning Fok. “Hutchison was the real progenitor: once it said yes it backed Orange 150 per cent.”
According to Hamilton, Snook’s personality and the Orange brand “grew together” with the emphasis on emotion rather than technology: “Hans was into that even then. He became visionary and messianic about it.”
Hamilton, for one, has no doubt Snook can do it again: “He’s discovered himself and discovered ambition in Orange – he needs to make a contribution.
“There is a terrific side to him, he has a curiosity, self-enlightenment and self-awareness which people parody and laugh at, which he ignores. I wish more chief executives had his ability to lead.”
That ability to lead may have accounted for his reputed frustration at Orange having had four owners over the past year.
It took Snook just six years to turn Orange into a $50bn (£35.7bn) brand. In May 2000 France Telecom acquired it for £25bn. By contrast, in August 1999, Deutsche Telekom purchased One 2 One in for £8.4bn. At launch in April 1994, Orange was the fourth and final entrant into the UK’s mobile phone market. Today it is challenging BTCellnet for second place.
Orange has 8.3 million customers; BTCellnet has 8.7 million; Vodafone has 10.2 million and One 2 One 7.1 million customers. But of the four players, Orange is increasing its customer base the fastest. It doubled its customers in the nine months to June and it is successful at keeping customers: it has the lowest churn rate – 15.8 per cent – in the industry.
But rumours of tensions between the French and British management are rife, and Snook is not the only Orange senior executive to leave. Chief operating officer Bob Fuller quit in October to head Telewest’s cable division. Fuller has been commercial director since 1994, heading marketing, customer service, sales and logistics. Group director Colin Tucker joined Hutchison 3G as managing director.
Orange is also experiencing change in its ad agency set-up. WCRS, its incumbent for the past six years, was ditched in August for Lowe Lintas, allegedly because of its global reach. It was a move which Snook was reluctant to make. He even asked WCRS chairman Robin Wight to remain as a consultant for the brand, though he refused.
WCRS’ cinematic ads for Orange – including the use of directors such as Alien director Ridley Scott – conveyed the company’s focus on customer service, and Snook used “The future’s bright. The future’s Orange” advertising slogan in conversation so often it sounded like his mantra.
Loss of confidence
News of Snook’s departure wiped four per cent off France Telecom’s share price, which had already fallen sharply on rumours of a reshuffle. Snook will stay until the company floats, which is expected to happen before the end of March. Sceptics say this is a ploy to safeguard the flotation, which will offer about 15 per cent of Orange, raising between £6bn and £9bn.
The company will have a primary offering on the French Bourse but will also be listed in London. This reneges on France Telecom’s acquisition promise of a full London float. However, Orange’s headquarters will remain in London for tax reasons.
France Telecom cannot afford to falter in the fast-moving and cut-throat race to build the biggest and most technically advanced global telecoms brand. But the fact that France Telecom is without much of Orange’s senior management means the telecoms company has its work cut out. Not only that, the French government remains its controlling shareholder, and as former UK state-owned BT knows only too well, customer service – on which Orange’s reputation is built – does not sit naturally with bureaucrats.
The men who have been given the task of marrying the two cultures are Orange deputy chief executive and chief financial officer Graham Howe and group executive vice-president of France Telecom’s mass market and services division Jean-FranÃÂ§ois Pontal.
Howe will become deputy chief executive and chief financial officer of the floated group, and Pontal will step into Snook’s shoes as chief executive.
Howe has been the man in Snook’s shadow but now has overall responsibility for the development and expansion of the business.
Pontal has worked at France Telecom since 1996 after 17 years at French supermarket Carrefour, which France Telecom chairman Michel Bon used to run. Bon is former chairman of France Telecom’s Internet service provider Wanadoo.
Bon is confident of Orange’s positioning: “Orange, with the combination of France Telecom’s mobile interests, is now one of the world’s top mobile groups – and it has the best brand. Orange has shown the world that vision combined with innovation and swift execution can change the market and create a brand that can travel the world.
“All of us at Orange are committed to continuing its vision, building on its brand and driving the wirefree future in Europe and beyond,” he says.
The company will place its mobile brands, including Itineris, under the Orange banner. Deutsche Telekom, owner of One 2 One is taking the opposite strategy, by planning to rebrand its UK mobile company under its German “T” brand name.
Whether Snook was the architect of the Orange brand is uncertain, but Orange owes much of its success to Snook’s unconventionality and vision. Can he transfer his success to other areas?
Other trail-blazing executives have failed to recreate success in new fields. Kelvin MacKenzie, the archetypal editor of The Sun, has failed to make the same seminal impact on the radio industry as chairman and chief executive of The Wireless Group. Even Microsoft chairman Bill Gates has stumbled after moving out of his original area of competence – after all, he was slow to realise the potential of the Internet.
But perhaps Snook’s unconventionality, often sniggered at, may yet prove a blueprint for chief executives the world over, just as Orange’s radical positioning is now a classroom case study on brand development.