Why Verizon is investing in philanthropy, even during the pandemic

Hans Vestberg, the CEO of Verizon, doesn’t believe in philanthropy without a strategic purpose.

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Instead, he thinks of issues like climate change, the digital divide, and diversity in tech as part of Verizon’s strategy. Tackling those challenges will ultimately benefit Verizon’s business in the long run, which incentivizes the company to keep investing in them as philanthropic efforts.

“We love philanthropy, we think it’s great and all of that,” Vestberg said at the Fast Company Innovation Festival this week. “But . . . giving away money that is not connected to our overall purpose is not working. Because the first thing you do when it’s tough times, you cut everything that’s not part of the core strategy.”

Tying apparent acts of benevolence back into Verizon’s overall strategy was a recurring theme during the conversation between Vestberg and Fast Company Editor-in-Chief Stephanie Mehta. And it’s a mindset that’s guided Verizon through the coronavirus pandemic, which has forced the company to adapt in several ways.

Vestberg points out, for instance, that Verizon didn’t lay off any of its employees during the pandemic, even as the company closed retail stores around the country. Instead, Verizon retrained 20,000 employees in other areas like customer care and technical support. Verizon also set up an internal staff marketplace of sorts, where if one part of the organization needs support, it can draw on employees from other areas. The plan benefited both the company and its workers.

“That means today, I have multi-capable employees that I didn’t have before because they were trained to be in the store,” Vestberg said. “We also broadened the opportunity for our employees.”

The same mentality applies to how Verizon approaches its own philanthropic efforts. Over the past five years, Verizon has invested $500 million in underserved schools through its Innovative Learning initiative, which helps schools with STEM education and connects them with 5G technologies. The initiative, while beneficial to society, isn’t purely altruistic.

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“That’s part of my strategy, because first of all, broadband is my strategy. Secondly, more children studying STEM is also part of my strategy because I need them to come to our company, and even more importantly I need females to do it as well,” Vestberg said. “So all in all it has been core to our strategy rather than giving it away.”

Verizon is looping its own employees in on these efforts as well. Last November, the company set a goal of having its employees dedicate 2.5 million volunteer hours by 2025, and it funnels that work into three areas: Digital inclusion (which involves helping disadvantaged groups learn technology), human prosperity (which tackles issues of gender and race equality, particularly in tech), and climate change. Verizon then partners with various nonprofit groups in these areas and helps connect employees with them. In the same way that Verizon’s investments in schools might help the company in the long run, so too might these volunteer efforts.

“That’s how we need to see the nonprofits moving forward to work with corporations, in order for them to get the maximum out of the stakeholders to solve the largest problems,” Vestberg said.

Even Vestberg’s emotional message to to employees in June after the police killing of George Floyd ties back to the theme of fitting Verizon’s overall mission. Vestberg was visibly shaken during the prepared remarks, in which he assured Verizon’s Black employees that they mattered and that he wanted to listen to their concerns, while also directing $10 million to racial justice charities. To Vestberg, it was just an extension of the company’s goals around race equality.

“It wasn’t a big thing that I had to ask for permission to say it,” he said. “It was just absolutely part of the strategy, and absolutely part of my background and where I come from and the values I have.”

All of this fits together, in a sense, with the company’s “Verizon 2.0” restructure that it announced last year. The company is now refashioning itself as a platform for connectivity, not just for consumers, but for mobile virtual network operators like Comcast, which buys wholesale access to Verizon’s network for its own wireless service, and for enterprises that might want to build applications around 5G.

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Everything Verizon does has to fit into that strategy, whether it’s retraining employees post-COVID, increasing its level of network investment during the pandemic, or rallying workers behind good causes so that Verizon becomes a more interesting place to work.

“If you make one bad decision, it’s going to be remembered,” Vestberg said. “And if you do things great in these times, you’re going to be rewarded over many years.”