FEATURE STORY — Winter 2011

Wired-In

Mary Dillon is no stranger to executive row. She’s headed global marketing for McDonald’s and been president of Quaker Oats. Now U.S. Cellular has tapped her as president and CEO to strengthen its brand loyalty in the wireless market

By Jonathan Black
Photography by Callie Lipkin

Phones are the ultimate consumer product. What other thing would you forget at home and go back for, except one of your kids?” says Mary Dillon, president and CEO, U.S. Cellular.

Mary Dillon ’83 cba looks both sharp and comfortable. She’s wearing a smartly tailored suit this morning, her straight brown hair framing a ready smile on her face. She has every reason to smile. This is the top executive suite of U.S. Cellular, the office of the president and CEO. Out the window behind her, big jets with gear extended drop silently to land at O’Hare. Dillon used to spend a lot of time on those jets, flying around the world as the head of global marketing for Mc­Donald’s. Now she’s running a wireless company.

“It’s been an amazing journey,” Dillon says. “I couldn’t have picked a more dynamic industry, I can tell you that. I love it. This company is wonderful; it’s really cool to be the CEO of a company in my hometown Chicago.”

U.S. Cellular is what’s known as a “tier two” wireless company, well behind the industry giants—AT&T, Verizon, T-Mobile and Sprint. Nevertheless, Dillon’s company is a major player. Some 9,000 employees work at its headquarters here and in its field offices. At last count, the company boasted close to 5 million subscribers, a figure that Dillon says is on the rise. U.S. Cellular lacks the lock on popular smart phones, such as AT&T’s iPhone agreement; it can’t boast the brand identity of Verizon’s “Droid shop” or the price-cutting tactics of Sprint. What it’s settled on as a marketing strategy is improving consumer satisfaction—getting customers what they want and expect.

“We’re number one in terms of network quality,” says Dillon. “You [also] have to treat people really well from a customer service point of view. We’re the best at that; you can check any of the rankings, from Consumer Reports to Nielsen.”

Dillon has plenty of statistics at the ready. She’s well-versed in the details of wireless. She’s the first to admit she knew nothing about the technology or engineering of mobile devices when she got the job just over a year ago. But she’s a quick study.

“It’s a great leadership and personal challenge to learn about a new industry,” she admits and laughs. “Of course, just when I think I’ve learned a lot and figured out all those acronyms, I’ll be in a meeting with engineers…and I have to learn again. But the good thing is I’ve got a great team of real experts, so I’m working in conjunction with terrific people in technology and collaborative work.”

If there sometimes seems a note of canned corporate-speak to her responses, it’s understandable. Since graduating from UIC 20 years ago with a bachelor’s degree in marketing, Dillon has spent her entire career in the business world. She knows where the questions are coming from. She knows how to respond to courteous skepticism.

“I’m a big fan of what’s called the art and science of marketing, understanding the numbers behind it—consumer insights and modeling and research. I rely on that every single day.”

Wasn’t it a big transition to go from fast food to wireless?

“In some ways, in some ways not. Food and cell phones are two of the most important things to people—well, maybe families are first,” Dillon says. “But phones are the ultimate consumer product. What other thing would you forget at home and go back for, except one of your kids? [A phone] is such an important part of people’s lives. When I think about what I can bring to the company, it’s developing a brand loyalty over time.”

Boosting sales for Snapple
Dillon can also bring a career spent addressing consumer needs. When telecom veteran and longtime U.S. Cellular CEO John “Jack” Rooney retired in 2010, the company took the unusual step of going outside the technology sector. Marketing expertise, it was thought, could count big in the tough competitive world of wireless carriers, and Dillon had blue-chip credentials. Prior to McDonald’s, she’d spent a decade as president of Quaker Oats, a division of PepsiCo Corp., overseeing Propel and Snapple. She knew the ins and outs of tracking buyer needs and expectations; she knew what drove sales.

“Consumer behavior is a fascinating thing, it changes all the time,” Dillon explains. “Kids were at the forefront of texting versus calling. Now I find—and numbers support this—that adults are texting a lot. The average age on Facebook is 35 [studies confirm that, and some put the figure much higher—anywhere from 38 to 44]. It’s moving from a youth phenomenon to mainstream. For instance, my mother-in-law, whose hearing isn’t great, finds it a great way to communicate with the grandkids.”

Dillon discusses strategy with her U.S. Cellular colleagues David Polmer, associate communications manager, and Molly McCabe, director of government relations.

Whatever the demographic, Dillon believes that many cell phone customers share a common beef: they feel handcuffed by inflexible plans. When she arrived in June 2010, the company was already committed to addressing that complaint with its new (if curiously named) campaign, “The Belief Project.”

Built on the slogan, “Service you can believe in,” the idea was to do away with burdensome contracts and penalties for switching carriers, enticing customers with reward (“Belief”) points—the staple of industries such as airlines. The company has since discarded the actual tagline. “We don’t actually use that phrase in our advertising,” Dillon acknowledges. “It’s a little hard to interpret. But its underpinnings are absolutely spot-on. The idea is to believe in something better—‘Switch to U.S. Cellular and be with the happiest customers in wireless.’”

Those customers have not always delivered sales. The year Dillon arrived, U.S. Cellular profits were down 43 percent. Furthermore, it had reported 39,000 fewer subscribers in the first quarter of 2010. But there have been hopeful signs under Dillon’s leadership; 2.3 million customers are now signed onto Belief Plans. And few doubt that Dillon is a dynamic choice to lead the company forward.

“She’s a very smart person; she knows how to make an impact and get things done,” says William (Bill) Lamar Jr. ’73 las, who worked with Dillon at McDonald’s as its chief U.S. marketing officer. “She understands how to reach new customers and she combines that with marketing skills. She brings the best of both possible worlds.”

First-generation college student
Dillon brings another distinction to the job; she is the only woman to head a major wireless company. She is often, she notes, “the only woman in the room at industry meetings.” Despite that accomplishment, she prefers to give a politic nod to other “senior women” at U.S. Cellular and to stress her own more general interest in policies of “inclusion [and] diversity, whether it’s gender or race.” But the feat is not lost on business colleagues.

“She’s one of the top female executives in the city,” says Christie Hefner, former CEO of Playboy Enterprises and a personal friend of Dillon since they met at a business luncheon six years ago. “She’s an extremely good communicator. She’s smart and relaxed with a warm personal style. She does an amazing job balancing a high-powered executive job with family.”

Dillon, who has four children ranging in age from eight to 21, does allow that she brings certain insights from “being a woman and a mom.” Women, she points out, make 80 percent of the household spending decisions, whether it’s buying food or selecting a cell phone. In her case, she quickly adds, it’s her husband Terry ’81 las, mas ’84 las, who makes most of those decisions. For close to a decade, he’s been the parent who stays home with the kids.

Dillon met her husband at UIC. She was an undergraduate, he was a graduate student in bio-chemistry. After finishing school, they both went to work; he took a job in the drug industry, Dillon went into consumer packaged goods. They married in 1984 and had their first child. With their second, says Mary, “we decided to try out him staying at home.” Two more children and many years after, she says cheerfully, “it’s worked out great for us.”

Dillon credits UIC with a lot besides it being the place she met her husband. She looks back at her years on campus with singular affection. No one in her family had gone to college before. Dillon grew up on Chicago’s South Side, where her dad worked in manufacturing at Inland Steel. She put herself through college with several loans and a waitress job at R.J. Grunt’s, where her picture still hangs across from the bar. (“That’s me, with very long hair!”)

“No one in my family had gone to college, so we pretty much had to figure it out on our own,” says Dillon. “Like most college kids, I wasn’t sure what I wanted to do...so I took a bunch of classes in business and one that I loved was marketing.”

Dillon also minored in Asian studies, taking courses in Chinese and Japanese literature, and spent her junior year as an exchange student in Japan. She speaks Japanese, handy during her years at McDonald’s, which has a major presence there, though not so useful now “given how often I get there.” She credits UIC with giving her a solid background in business, and especially values her course in statistics.

“I’m a big fan of what’s called the art and science of marketing, and understanding the numbers behind it—consumer insights and modeling and research,” says Dillon. “I rely on that every single day.”

Does she still keep an eye on the fast food industry?

“Oh, absolutely—as a hobby, as an investor, too! I was excited about [McDonald’s’] announcement that they were putting fruit in Happy Meals,” she says. “Any time you can add something to make an easier choice for parents, that’s an easy decision.”

Parenting is tough, Dillon acknowledges, and she’s not about to hand out advice from afar; how to bring up children is each family’s individual decision. Plus, the world is changing too rapidly to stick to old rules. When her kids were little, she says with a smile, the big decision was whether or not to allow a TV in their room.
“One thing I do say to people is that technology is here to stay,” Dillon relates. “When friends ask if they should do X or Y or Z, I tell them, ‘Guess what, there’s no going back; you don’t have control of that. The ship has sailed. Just make sure you’re on top of it and paying attention.’”

Anticipating the next big thing
At U.S. Cellular, Dillon pays close attention to what’s coming next—by reading, talking to colleagues and attending conferences, such as a recent global gathering in Barcelona. Wireless, she’s discovered, can be very different from other industries, where companies figure out what a consumer wants and design a product to fit it. “Wireless is an industry that’s pretty far ahead of what consumers think they’ll need,” Dillon says.

Data, she says, is the biggest area of growth for wireless. People are very “attached to mobility. Smart phones are going like crazy. Last quarter, they made up 40 percent of the sales—soon it will be more like 50 to 55 percent. The ability to have everything in one place is exciting and cool, [and] there are so many neat things you can say and do—texting or surfing the Internet or getting reviews of movies and restaurants. Mobile entertainment is very popular.”

The company has turned its attention as well to tablets, and plans to soon unveil the latest Galaxy by Samsung. Dillon sees tablets as “incremental” to smart phones—best for mobile entertainment, movies, gaming, “because it’s fun to have a really nice screen. PCs and laptops remain a better choice for creating work documents, though if you want to bring that document someplace, you can put it on a tablet.”

Just past her one-year anniversary, Dillon has a simple mission: “Our goal is to serve people, to give them what they expect…that’s what we’re focused on.”

From her CEO office at U.S. Cellular, Dillon’s horizon encompasses more than just bottom-line dollars; she’d like to inspire others to follow her leadership path. She’s especially keen on mentoring and helping people, especially women, grow in their careers. Her own trajectory is a likely boon to the company that hired her, and it’s provided the bonus of great personal satisfaction.

“At this stage in my career,” she says with pride, “I can be who I am.”