Is Telstra simply unmanageable right now?

By LAURIE PATTON | 21 June 2018

What happens when you take a dysfunctional government corporation, privatise it, and then allow it to pretty much do as it likes? The answer to that question is at the heart of what is no doubt keeping Telstra boss Andrew Penn awake at night.

Former CEO David Thodey did his best to imbue a creaking bureaucratic structure with a vision for a better way of working. His frequent speeches to huge gatherings of Telstra staff were at times simply inspirational. Almost evangelical. And he meant it! David knew what was wrong because he’d worked his way up from senior middle management. And senior middle management is where the problem largely lies.

Telstra relies on the same management principles as the public service from whence it came – one of these is that people work their way up the ‘greasy pole’ by constantly moving around. You seek promotion to the next level by looking for vacant roles wherever they may be, irrespective of the policy area or your previous experience. This leads to a prevalence of generalists at the expense of subject matter experts. When I worked in the public service shortly after leaving university the first piece of career advice I received was never stay in the same place too long – even if you love the job and you are very good at it. Moving quickly has the added advantage that if you make a seriously bad call you’ll hopefully have left it for someone else to handle.

Telstra’s senior management is too full of generalists. Many have worked across the organisation so, in theory, they understand the entire business. Sounds good, up to a point. But in today’s fast moving communications landscape, with competition from numerous ‘lean and agile’ start-ups, this is just a recipe for disaster.

I’ve often bemoaned the fact that personnel officers are now called human resource directors, as though somehow they bring special insight into how to manage people. No, they still basically make sure everyone gets paid and they’re on hand when people arrive and when they are shown the door.

At Telstra, the HR department reflects the organisation – a bunch of people who think they know more than they do. Those that do know something seldom stay long, or they just stay quiet. When things go wrong, as they are bound to in such a big organisation, HR is sent in to sort things out. This means that executives who are paid to manage their staff are given a ‘get out of gaol free’ card. In the end, more often than not, nobody is held responsible.

My ‘separation agreement’ prevents me from saying too much, but if Andy wants to know what to do about all this then I, and a number of other former Telstra employees I could recommend, would happily give him the good oil.

In my case, after having spent more than two decades in commercial television – including stints running the biggest TV station in the country and a highly successful and profitable regional network – Telstra head-hunted me to fill one of a number of roles designated as being for ‘subject matter experts’.

Most of my SME colleagues have, like me, departed after finding that in a company full of generalists who think they know all they need to know actually having industry knowledge and outside experience is not highly prized.

So, what now for Telstra? Mr Penn has embarked on a major restructure. Good on him I say, and good luck. Telstra needs a monumental shake-up with no rocks unturned. It has to make people in high places more accountable – and it should bring in more people from outside with experience in the new world it must conquer to survive.

In an earlier role, I played a part in Kerry Stokes’ necessary, but painful, re-structure of the Seven Network. Telstra needs to remember that if it has to lose a lot of staff (which is regrettable) it won’t be their fault in most cases. A large swag of the redundancies will need to come from middle to upper management if it’s to have any real impact.

And one last thing for Andy Penn to think about, and which brings me back to David Thodey. Thodey’s mantra was all about customer service. Which of course is Telstra’s Achilles Heel. I’m sorry to have to say this, but those well-meaning service centre people with their broken English and limited technical knowledge, talking over dodgy phone lines in far flung places, also need to be at the head of the exit queue.

Come 2020, the NBN rollout will theoretically be completed. It won’t be, of course, for reasons I’ve previously written. All those dud FTTN connections, ironically using Telstra’s old copper wires, will need to be replaced before everyone has fast, reliable broadband access.

However, what will change dramatically over the next few years is that Telstra’s market dominance will continue to be tested. So fixing its appalling image in dealing with customers will need to be a top priority.

(Laurie Patton once accepted a job at Telstra against the advice of industry friends and colleagues. He was disappointed by what he experienced.)