The recent announcement, of a new management team by Telstra CEO David Thodey, appears to be more a case of Thodey stamping his brand of management on Telstra in an effort to build revenue for the future, than him responding to recent resignations.
Thodey is a tough canny executive who after taking on the role of CEO of Telstra has set about restructuring the Company based on a new set of values. He is one of those people who while still smiling, has that ability to still put the boot in, to get what he wants. He is a seasoned operator who learnt his trade with Companies like IBM, who discovered years ago that good systems and good customer service last longer than most products.
Thodey knows that the future is all about retaining customers, and not pissing them off. He also knows that he only has one shot at getting his strategy right and that the Telstra brand needs a major overall which is why he has appointed Kate McKenzie, formerly GMD of Strategic Marketing, to the newly created position of Chief Marketing Officer.
This could lead to a major shakeup of Telstra marketing partners with advertising agencies now on notice that Telstra is ready to change direction. The brand needs a new personality, it needs to appeal to people who are prepared to buy content and a data service as well as a device that lets them get access to content.
As the former Managing Director of IBM Thodey is well aware of the importance of good customer service. In recent months he has been quite vocal on the issue with internal management, analysts and the media told bluntly that Telstra’s current level of customer service is in need of open heart surgery which is why he is now focusing on a total restructure.
Thodey’s predecessor Sol Trujillo, left behind a mountain of customer service problems, which Thodey is now trying to fix. During his time with the Telstra, Trujillo, develop an excellent Next G wireless network he also spent billions on developing a new billing system which Thodey knows will give Telstra an edge when the company starts billing content used on set top boxes, touch screen notebooks, mobile phones and TV’s.
Thodey also knows that one way or the other he is going to have to ramp up Telstra’s retail marketing either as a partner in the National Broadband Network or as a competitor. To do this he needs to have in place a management team that can take Telstra to a new level.
His decision last week, to relegate Justin Milne the former head of BigPond to being an indirect report was a tough decision. Not for Thodey but for Milne who saw the move as a demotion.
What Thodey is doing is putting together a management team that can reengineer the existing assets of Telstra into a new structure that can compete, not only against his traditional competitors like Vodafone and Optus and a host of local ISP’s but the likes of Google, Apple and Microsoft all global Companies that are looking to strip content revenue from the likes of Telstra.
Telstra’s future hinges on the sex appeal that Thodey can generate for the brand. While several competitors will have access to infrastructure Thodey has to get consumers to spend on speed, content, data packages and devices that can deliver for his customers a great technology experience.
He also recognises that when things do go wrong which they do with technology, that there is a friendly Telstra person there to help customers, because holding onto an existing customer is significantly cheaper than having to go shopping for a new one.
If Thodey succeeds with his vision, Telstra could become a local powerhouse that generates click revenue from millions of content and application downloads. Not just in the consumer space but in the SMB and enterprise markets, with organisations taking advantage of services like video conferencing or application downloads or cloud computing.
At the end of the day Telstra already has a giant customer base, they also have in place the infrastructure and the billing system needed to handle the millions of transactions that future revenues will be based on.
What is missing is customer service, trust and a brand that has sex appeal to both business and consumers.
This is fixable with the new management team that has been put in place today.