Qwest's new CEO Edward Mueller said today that Dick Notebaert first called him informally about a potential job last winter, then stayed behind the scenes while a search firm handled the recruiting process in June.

Mueller said he was attracted to the fact Qwest was able to improve its cash flow and customer service despite keeping a tight rein on expenses. He said he, too, likes a disciplined approach.

In an interview with the Rocky Mountain News at Qwest's corporate headquarters, Mueller also talked about how his retail experience with Williams-Sonoma may be applicable to his new job at Qwest.

He also talked about the service problems he inherited at Ameritech in 2000, and how he and Notebaert became close friends.

Mueller wore dress slacks, a white dress shirt and yellow-patterned tie, in contrast to Notebaert's typical attire of Qwest-branded clothing. He quipped he might not know how often he will be donning Qwest-logo shirts until he gets out of the "interview process."

Excerpts of the interview follow:

Q: Why are you getting six weeks of vacation?

Actually, I'll never take that much vacation — it's just part of the contract. That's the truth. I think it would be a real stretch to think you'd come onto one of these jobs and then you'd go take vacation. It just doesn't work that way.

Q: Why did you come on this job, anyway?

You sound like I'm not too bright.

You were kicked back, you were retired for a year.

First, I love business — the honest truth. Secondly, I had no plans to come back. I was on (company) boards, I was helping some small companies (run) by some friends of mine. We'd just finished our house in Scottsdale, Ariz. We had one more year to get my stepdaughter out of school (in Marin County, Calif.). So things were going good. I was playing golf, having a fun time, traveling, doing things with my family, fishing. Out of the clear blue, Dick had called me back in February or March and asked if I would be interested in going back to work. Dick and I are friends. (I said at the time), "Dick are you nuts? I'm having a good time. Is it a good job?" (He said), "Well I think it is." He said, "Send me your bio," and I sent the bio.

I don't hear from Dick. Until June, I hear from a search firm and they say, "Would you be interested in Qwest?" Dick had never revealed anything. We hadn't even had a chat after that. It had been more friendship with Dick, and he had tried to recruit my business (when Mueller was CEO of the specialty retailer Williams-Sonoma).

Q: Did he succeed (in getting the Williams-Sonoma contract)?

No, he didn't. MCI was in bankruptcy and we had a relationship with them. And they were actually giving the business away because they didn't care about the profit. They cared about retaining the revenue.

Q: He just wanted to hang out with you for a few days? (Notebaert stayed with Mueller at his home in the San Francisco Bay area).

No he really thought he could get it, but he didn't. He had the best real bid and best creative bid actually, but that was three or four years ago.

So fast-forward to today and I said, "Wow this (possible job at Qwest) is interesting." I had all the public data at my fingertips. The first thing that tripped me in a good way was, "These guys have come from nowhere to a lot of great cash flow."

And, secondly, I liked their position of not overspending. They had some reductions in cost, obviously, but they didn't go, "What's the next greatest technology? We have this extra cash. Let's now get nuts." They were really, really disciplined, which I am.

Then the third thing was that the service was not only OK, but it had gotten better.

Those are not combos that generally come together: free cash flow, improved service and disciplined capital. That spoke volumes. They had to have built down to the grassroots to get this done. And that was exciting to me because I like teams, big organizations, I like service-oriented things. I learned a lot in retail (with Williams-Sonoma). The business felt like coming home.

Q: Did the current Qwest feel as much like Williams-Sonoma as the old Ameritech?

I can't tell yet, but I could tell by being with the employees yesterday (Monday), you could see heads nodding. I could feel the energy, that this made sense to them (the combination of telecommunications and retail experience). I think that's the kind of service we have to do if we're going to win in the marketplace. And I like there's way less regulatory overhang today in the telephone market than there was even five years ago when I left. I like that now the best marketer, the best service provider has a shot at winning without spending a lot of resources.

Q; What did you learn at Williams-Sonoma in terms of Internet strategies that might be applicable here?

They were very careful to adopt the Internet. The last four or five years, the Internet always was growing faster than the direct mail. And it's got to be marketed. It's not just Google Williams-Sonoma. So as a user, it's going to be very helpful for me here. Call centers, how you would place an order, and then how you would service that (order). I think that's very applicable from a consumer standpoint.

Q: And someday the Internet will be applicable to a video strategy?

That's exactly right. I think we all know it's going to play. We just haven't quite figured out how we're going to get there.

Q: Do you anticipate bringing in a lot of your own people?

No. This would be a natural assessing, as any boss would do, even if Dick were here. We're not in a crisis. The fun thing here is they've done a really good job.

Q: You said Dick had done a lot of the heavy lifting. What's the biggest obstacle for you right now?

We have to build revenue. I want to be disciplined on capital (spending). We have some of our revenue streams going down, some going up. (The challenge) is to get it moving faster than it's moving today. And that combination will be very rewarding to our shareholders if we do it all.

Q: One of the first times your name really started showing up in the papers was with the Ameritech service issue (Mueller, who was with SBC, became Ameritech CEO in 2000, soon after the two companies merged). Talk about what that was like for you.

I'm not necessarily wanting to be Googled and found, if you get my drift there. I like the anonymity if you can keep it there. I spent all of my career in operations, growing up in the Bell system. And I had a lot of tough service problems, like we all did, because there was so much growth from the late '60s to the late '90s until the bubble broke. It was a good run for the telephone business. So I had had plenty of service problems, but nothing of the magnitude I had faced in Chicago. Our company had made an acquisition, so there were a lot of promises, a lot of government oversight. You had a lot of expectations, and then our service became very poor. I had a pretty nice job at the time. I was doing international work (for SBC), and for a kid who grew up in Missouri and really didn't get on an airplane until I was 18, it was, "Now I'm in Europe. Isn't America great?" And then my chairman called me and said, "You're going to go to Chicago." Because it was so public and we were so bad that customers were jumping up and down, you can imagine the first interview wasn't as pleasant as this one. And then regulatory commissions, all five states (Illinois, Indiana, Michigan, Ohio and Wisconsin), all came to Chicago and we had to stand for a day, the chairman and myself, taking their questions: "What are you really going to do to fix this?"

Some SBC executives had ill feelings toward Dick (Notebaert, a former Ameritech CEO who some blamed for neglecting the infrastructure before the completion of the merger. A large number of retirements also took its toll.)

I had no ill feelings toward Dick. Dick (who had left Ameritech by then) was very engaging when I got there. Dick was very open to whatever it takes. "I'm here to help you," which I thought was extraordinary admirable character. He didn't have to do that. He even said one day, "Honestly, if you want to blame me, just put it out there." I said, "That doesn't do us any good." We had a lot of work to do. I appreciated him helping me out in the community. Dick would introduce me to customers, to business leaders, to the political scene, mainly so I could get our story out, to pledge and get things done. I knew Dick for some time before that, but then you really get to know somebody. I couldn't talk highly enough about Dick.

So this (opportunity) had a big draw for me with Dick being a supporter, which I didn't know until I got with the (Qwest) board. Dick saying this is a good job. This had a great deal of weight on my decision (to become Qwest CEO).

Q: What about civic involvement?

I personally love education. That's just a passion of mine. My wife and I will be empty nesters. I want to be involved in Denver. I think this is a neat community, because it's small and big enough to bring resources to help things. Everybody has counseled me that it's an extraordinarily friendly town, and I found that to be just in my four days here.

-- Jeff Smith, David Milstead and Rob Reuteman

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