Transforming how we work: Telstra CEO Andy Penn

Today we have announced fundamental changes to Telstra’s organisational structure and operating model. Part of our T22 strategy, these are about building a company agile and nimble enough to respond quickly to rapidly changing market dynamics and opportunities. To do that we need to change how we work. I wanted to share the note I sent to employees today because I want to keep being as transparent as possible about what we are doing and what that means for our customers and employees.

Good morning,

Today we are announcing a new topline organisational structure and leadership team as well as the first components of a new operating model effective 1 October 2018.

These are important steps to help us deliver our new T22 strategy and incorporate the feedback from many of you about the impediments and pain points which get in the way of us executing.

As I said when we launched the T22 strategy last month, our size and legacy that served us so well in the past are now getting in the way of what we need to be today and in the future, given market dynamics and the rapidly changing needs of our customers.

We must act now to ensure we deliver rapidly and effectively on all of the commitments we made to our customers, the market and to you, our team.

So today we are announcing a simpler, more streamlined structure which will remove duplication, hierarchy and silos across the organisation. This will help us move more quickly and effectively deliver on the T22 strategy.

At the heart of these changes is the simplification of our products and services built on new technology. By mid-next year we will have fully rolled out our market leading products and services. To help deliver these changes, we are announcing a new end-to-end Product & Technology division of Telstra. It means we will significantly increase our technical capabilities around product development and management.

The changes I am announcing today will ensure we continue to deliver market leading innovation in networks and support the build out of 5G and Internet of Things.

From 1 October we will shift to the new structure and operating model, under a single strategy, with our plan on a page and its shared goals for the leadership team.

Today we have also announced changes to the Group Executive team.

Our new structure and Group Executive team enabling our shift

*Product & Technology will drive an integrated product and technology roadmap for all of Telstra to deliver innovative and simple product experiences that lead the market and drive profitable growth. An external appointment has been made for this Group Executive role and the person will be announced shortly.

*Michael Ebeid joins Telstra to run the Enterprise team servicing Australian and international business and government customers with market-leading solutions and services. Michael will start at Telstra on 8 October.

*Vicki Brady will continue to lead Consumer & Small Business designing digitally-led propositions for customers, managing customer relationships with superior sales and services capabilities, to acquire new customers and grow Telstra’s base.

*Nikos Katinakis joins Telstra in mid-October to lead Networks & IT focused on extending the company’s network superiority and enabling digital experiences with world-leading technology execution.

*Brendon Riley will become the CEO of Telstra InfraCo which will efficiently leverage the InfraCo assets and drive growth in the Wholesale market, whilst creating future strategic optionality for these highly valuable assets.

*David Burns, currently with the Enterprise team, will lead Global Business Services (GBS) to bring together and radically simplify customer service operations and internal support services. GBS will drive a consistent approach to customer experience, efficiency and service levels. David’s appointment is effective today.

*Robyn Denholm will move to the role of Chief Financial Officer & Head of Strategy. She will support the CEO to drive the company’s overall strategy, deliver long term shareholder value growth and continue to lead our digitization initiative for FY19.

*Alex Badenoch, Transformation & People will lead the T22 strategy transformation execution as well as drive the way the company works and operates, strengthening employee engagement. A Transformation Delivery Office has also been established to deliver an integrated and disciplined approach to implementation.

*Carmel Mulhern, Legal & Corporate Affairs will continue in her role engaging external stakeholders, including relationships with government, regulators, media and the community. Carmel will also continue to hold the office of Group General Counsel and manage the internal provision of legal advice and employee communications.

I am excited Michael Ebeid and Nikos Katinakis are joining the Telstra team. Both bring with them significant experience across a range of industries, including telecommunications, and will be instrumental in Telstra’s transformation.

Michael was most recently CEO and Managing Director of SBS where he has significantly evolved the public broadcaster’s portfolio and led a continuous focus on driving efficiencies and a high-performance culture. He also spent 10 years at Optus, which included being a senior executive in their Enterprise and Government division.

Nikos was most recently Executive Vice President Networks for Reliance Jio in India, where he was responsible for rolling out the first pan-India 4G LTE Network. Prior to leaving Jio, he led their Wireline/fixed consumer business, and before this held senior leadership positions at Canada’s Rogers Communications and Ericsson.

More detail including the functions that sit within these areas and the type of work they will be responsible for is available on the Strategy Hub.

It is with sadness that I announce Warwick Bray, Stephen Elop, Will Irving and Joe Pollard will leave Telstra.

Warwick has been Chief Financial Officer since 2015 where he brought to the role great insight and support for me. He has also previously led our Corporate Strategy group and our mobiles business successfully where he grew our mobile market share by 10 percentage points, achieved double digit revenue growth and improved margin by over $1 billion pa and more than 10 percentage points, delivering industry leading growth. As CFO, he led the delivery of approximately $700 million pa in core fixed cost reduction, introduction of a new capital management framework and driven insight into Telstra’s financial performance through NBN structural change.

Warwick will leave Telstra on 30 September.

Stephen has been instrumental in guiding our corporate strategy and building our technology credentials since he joined us in April 2016. He played a key role in bringing together our Chief Technology Office and Corporate Strategy groups so we were better placed to begin the significant shift from an incumbent Australian telco to a company able to boldly face global technology disruption.

Stephen will be finishing in his full time executive capacity at Telstra tomorrow but will continue to maintain a close relationship with the business.

Will joined Telstra in 1997 and held a variety of legal roles prior to becoming Group General Counsel in 2005. Following the T3 Telstra privatization he was named the 2006 Australian Corporate Lawyer of the Year. He also played a key role in Telstra’s $11 billion NBN deal in 2011, immediately after which he became the Group Managing Director for Telstra Business. From 2011 to 2016 he grew its market share and its NAS business very significantly. He was appointed as GE Telstra Wholesale in 2016 and has recently led the work developing Telstra InfraCo. Will’s last day at Telstra will be 30 September.

Joe joined Telstra in 2014 initially as Group Managing Director Marketing and Media before becoming Chief Marketing Officer and Group Executive Media the following year. She has been instrumental in evolving our brand and the experience we provide customers including through the Brand 3.0 work she led. Joe has also been responsible for building Telstra’s extensive portfolio of digitally enabled media assets.

Joe will leave Telstra on 30 August. From this time, Jeremy Nicholas will be acting GE until 1 October as we integrate the Media and Marketing teams into the broader end-to-end structure and operating model.

I would like to recognise the significant contributions Warwick, Will, Stephen and Joe have made to Telstra and thank them for their dedication to Telstra collectively over the years. We will arrange appropriate farewells in coming weeks.

Sharing the roadmap for organisational and operating model changes across our multi-year program

Our changes in structure, new ways of working and our operating model will be delivered through a multi-year transformation program with our new structure and operating model to take effect from 1 October.

To drive the execution of T22, a Transformation Delivery Office in Transformation & People will deliver an integrated and disciplined approach to implementation. Our roadmap provides more information on initial timings for T22.

The next phase in our organisational and operating roadmap will be the announcement of the leadership structures and executive appointments under the GEs. This is expected in mid-August.

As this is a multi-year transformation program, teams will be impacted at different times and to varying degrees. As I have previously said, in the first year the majority of reductions will come from our executive, middle management and back of house functions with a view to minimising the impact on our front of house workforce to maintain focus on the customer experience.

Outside of CEOLT, there are no individual role impacts being announced today as part of T22.

Throughout Q1, there will continue to be role reductions proposed in local teams due to business reasons unrelated to the new T22 structure and operating model. These job proposals are part of the net reduction of approximately 8,000 employees and contractors.

I am conscious this is a large amount of change and that can be unsettling for our people.

We will continue to provide ample check-ins and opportunities to provide feedback and I will continue to be available at least once a week including through yam jams, town halls and livestreams. Please also reach out on Yammer if you have queries or comments.

At this time it is important we all remain focused and deliver on our Q1 commitments in our current business units.

In this regard it is very important we respect that the organisational changes are effective from 1 October 2018, unless where otherwise announced.

Current accountabilities and responsibilities including those important to the SSU must be maintained and respected until that date when the planned changes can be properly implemented.

In coming months, we will run a company health survey to get your feedback on how easy it is to get work done at Telstra. This will be our benchmark and help us identify further opportunities to improve and how well we are managing implementing change across the business.

Looking after each other is critical as we all experience change differently and at different times

While I hope this provides some clarity, I understand people will be uncertain about what these changes mean at an individual level. When there are individual impacts, we remain committed to speaking to everybody affected first and supporting them throughout the process. Please know that EAP support is available at all times and more information is available on the transition program.

Fundamentally re-engineering how Telstra operates with our new operating model
With our single strategy and shared goals, the way we operate will be re-engineered to support an end-to-end operating model.

We will only be successful if we collaborate and work together differently and fundamentally change the role of leaders. We will remove complexity and management layers, decrease the focus on hierarchical decision-making, and increase the focus on empowered teams making decisions closer to the customer. The role of the leader will be to enable and empower, rather than direct, their teams.

Initial organisational model initiatives for 1 October

*To support new ways of working, the roll out of methodologies that improve our agility, speed and cross-functionality will be expanded in Product & Technology, Networks & IT, GBS and select parts of our customer segment functions. Some frontrunner teams will shortly start to test, learn and refine how we apply these methodologies as we lead into 1 October.

*To reduce hierarchy and to simplify, as we re-design functions, we will remove between 2 to 4 layers across the company. We will also use consistent job titling regardless of role across the company.

*To support people to work in the new operating model, every employee will attend an onboarding program, which will progressively roll out from October.

Remaining focused on Q1 so we deliver our targets

Our new structure and operating model will take effect from 1 October. Until then it is important we all remain focused and deliver on our Q1 commitments in our current business units.

We are fundamentally transforming Telstra and the experience we provide our customers. I am confident Telstra will be an exciting and very different place to work and do business with in the future and I look forward to sharing more detail with you over the coming months.

There will be plenty of opportunities to ask questions, starting with an employee livestream today at 1pm. It would be great if you could take the time to attend where possible, otherwise the recording will be on Corporate News.

Andy

This post originally appeared on Telstra CEO Andy Penn’s LinkedIn page. You can follow him on LinkedIn here.

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