McCaw organization

"To further sweeten the picture, Lumry and Hooper did everything they could to shift costs from daily expenses to capital accounts, where spending would not count against cash flow (that is, revenue left after operating expenses). Nearly everyone in the organization focused on CFAM, cash flow after marketing. Was that dollar spent on just main- taining something—an operating expense—or on extending its useful life—a capital expense? If a plausible case could be made for the latter, then that's where the money would be slotted. For example: Didn't Cal Cannon spend a lot of his time overseeing construction of that new plant? Sure. So 30 percent of his salary became a capital expense, and CFAM looked rosier. How about Cal's staff and their expenses? Same thing. Independent auditors accepted the shifts. "We got to know the accounting rules very well. We really stretched the definition of 'expanding the useful life of an asset,' " Hooper says with a laugh. Moreover, as the McCaw organization did more borrowing, Wayne Perry, Rufus Lumry, Steve Hooper, and others carefully worked over the loan agreements to give the company wiggle room. The McCaw team fogged definitions of debt or capital expenses, built "back doors," and otherwise structured agreements to follow Craig McCaw's oft-repeated dictum, "Flexibility is heaven.""

"To Craig McCaw, going public in 1987 did not mean he had to go public. The plan was to raise $2.3 billion from a stock offering, plus another $400 million from bonds sold to investors—giant gulps of gas to help the McCaw organization move faster, pay off some debt, and grab still more cellular territories. It would have helped for McCaw to wave the company flag in public at such a crucial time. But he chose not to make the traditional appearances before analysts and other Wall Street groups, claiming he wasn't good at orchestrated events. Instead, Wayne Perry led the McCaw team on the road show to London, Boston, New York, and elsewhere. What might have seemed a liability—a chief executive seemingly missing in action—ultimately proved an advantage. McCaw in person was certainly a business vision- ary. But McCaw as the mysterious figure whose absence embodied his unusual style, whose thinking was so lofty that doing a road show would be a needless distraction . . . now, that was a real visionary."