The hardest thing we’ve done…changing our culture

This is my last blog as part of the LinkedIn Influencer program. I announced my retirement earlier this year and Telstra’s new CEO Andrew Penn will be picking up the baton and offering his own Influencer views on key issues going forward.This month, as part of a long—standing commitment, I spoke on leadership at the Queensland University of Technology. Here are some of the ideas I shared:

The hardest thing we’ve ever done…

What an amazing time in human history, with so much change in the world. The digital revolution is all the time creating so much that is new - networked citizens, new paradigms for value creation, new ways to solve problems and learn, work, govern and lead.

The extraordinary growth, both in the capability of new technologies and the creativity of new business models, are at the heart of much of it. There is such a huge appetite for connectivity, both by people and, increasingly machines. All of this change has implications for leaders (and companies and countries) because the rate of change is accelerating. Telecommunication providers (including Telstra) are the enablers of so much of this digital-driven change, as well as having to change themselves as business models are challenged. In that context I want to share five key lessons we’ve observed in this digital age, and use Telstra as an example:

#1 PROVIDING GREAT CUSTOMER SERVICE IS NO LONGER OPTIONAL

There’s no doubt this is the century of the consumer. Customers are better informed, more demanding, discerning, and ready, willing and able to broadcast their views on poor products and service. Bad service, never acceptable in the past, is even less so now. The power of connectivity and social media has changed the way people consider and buy. Our focus has been on creating customer advocates. We are not perfect, in fact we fail every day, but we are committed to customer service excellence. A strategy focused on building customer advocacy is one of the hardest strategies to follow because you have to believe improved customer service will deliver better financial results. Customer advocacy is a multi-faceted strategy, it has to be authentic and it must involve both behavioral and deep process improvements.

#2  REINVENTION IS ESSENTIAL IN ORDER TO REMAIN RELEVANT

In a world changing quickly no business can rely on old business models to drive value - we have to challenge the status quo. Business disruption driven by technological change is challenging every industry, business, the way we deliver education, even govern; it is driving fundamental change. The challenge for us was to learn to grow and restructure at the same time, so we could reinvest. We invested to drive growth at the same time as we started to take cost out of the business. We restructured existing businesses while we invested in new businesses. We drove process improvement, digital enablement, restructured channels, reviewed every business process to reduce our cost structures. The result is that Telstra will be a fundamentally different company in five years as we restructure our business.

#3 CULTURE BEATS STRATEGY EVERY TIME - but you still need a strategy

Building a customer service culture was the most important challenge we faced in the last five years. It was also probably the hardest thing we have ever tried to do.  Our cultural change journey took the company at least part of the way from a compliant culture to one where we trust each other to deliver outcomes. The leadership challenge was getting the customer to be the centre of everyone’s agenda and thinking more broadly than just ‘What is my contribution?’ If you make the customer the final arbiter in everything it actually makes you more responsive to the market, stops internal factionalism and rallies everyone to something that is bigger than any individual. Customer service is really about culture and values and getting there must be a ‘whole’ of company initiative – everybody, not just those in customer facing roles must be actively involved.

Leaders have to focus on helping their people believe that this is real and that you really mean it. Get it wrong and they can be your biggest critics. All of this will depend on your personal commitment and mean you have to model the right behaviours. Staff will look to their leaders for behavioural cues – lead it!

#4 INNOVATION AND CREATIVITY IS ESSENTIAL

One of the biggest challenges for leaders is how to embed innovation and create new value for employees, customers and shareholders. Innovation is not just about science, engineering, mathematics, it is a way of thinking and acting. I believe all of us can be innovators, and creativity is an inherent human trait. The problem is that we stamp it out, particularly in large organisations where we are often value compliance over creativity. The question for leaders is how do we create an environment that allows people to innovate within certain structures? Part of the answer is the need for innovation to be encouraged and applauded. That explains so much of the world; the places that celebrate innovation are famous for it.

Embedding innovation starts with culture; you need an insatiable appetite to learn, to put yourself at risk, to be curious. Using Telstra as an example, we do lots of little things. We run hack-a-thons, technology leadership days, reverse mentoring, running an Innovation Hub. But we also do lots of big things. We run a start-up incubator, have a ventures team, a technology and innovation office, a software company in Silicon Valley. The result has been a whole suite of new customer products and services. The learning for us was the need to disrupt ourselves from within by enabling the creative talent of our people. We have much more to do but we have started the journey.

#5 A NEW LEADERSHIP PARADIGM IS NEEDED

The world is changing quickly and the era of the all-knowing CEO or leader has gone. But while the world has changed the theories of management and leadership have not. The future is not just about charismatic leaders and rock-star CEO’s - it is about authentic leadership and transparent management. The shift is already happening in many great companies; from hierarchical to thought based leadership; from rules based companies to values based companies; from compliance to trust and enablement. This is a fundamental change in the way we lead. A new leadership paradigm is essential if we are to lead in this connected world.

The world is changing quickly and leadership has to change too. The old truism that we can’t presume what we did in the past will work in the future has never been more appropriate. That’s what makes leadership so challenging, and so rewarding. I hope these thoughts will help you all on your own leadership journey.