Why the most innovative Telcos obsess about Culture and Engagement

Many years ago, I had the pleasure of working at Mercury Communications (Cable and Wireless), at a time when big innovations were brewing in telecom. The entire industry paradigm was moving away from POTS (“plain old telephone stuff”) to PANS (“pretty amazing new stuff”). Our CEO (Mike Harris) recognized that this shift would have profound implications for the entire industry – and that Mercury would need to undergo a wrenching strategic pivot.

Way ahead of his time, Mike also recognized that a major internal culture change was critical to capture value from this wave of industry shifts. He personally launched and drove a program called “Imagine” to engage every employee across the business. He ensured that every person had a voice, and everyone was valued. Off-site “Igloo” type buildings were set up, and a short and highly interactive two-day course ensured that all had heard the new gospel. In every office there were new break out rooms with comfy seats; brainstorming and creativity were actively encouraged. Formal meetings were reduced, and a new business language began to pervade.

What an impact it had. Everyone wanted to join our business, entrepreneurship blossomed, and we had incredible employee engagement. As a result, we did come up with some amazing “new stuff.” This was innovation at its best, and way ahead of the norm in those days. During Mike’s three years as CEO, profits doubled.

Fast-forward to 2015. The telecom sector is once again under siege, faced with a major industry transition. Telco companies today cover a range of services, from cloud offerings to high availability hosting to a host of global network services.
This vertically integrated telecoms business model is under an increasing attack from all sides: tougher regulation, new technology, disintermediation from new entrants, and heightened customer expectations.

These various challenges demand innovation along multiple fronts, ranging from globalized operational models, to the swift uptake of new technology, to new approaches to ecosystem competition and collaboration.

Yet, as I learned from Mike Harris, if you get the culture right, the other issues will fall into place. In today’s environment, culture change at telcos centres on people and market issues.

a. Executives at telcos know they know they need to innovate. Incremental operational improvements are not enough; the imperative is to find that breakthrough new service to unlock high-velocity growth.

b. Employees have plenty of ideas about how to improve customer satisfaction, how to cut costs, and what the market really needs. But how do they get heard and recognized for their contribution? If senior management doesn’t give them a voice, even the best top-down innovation strategies fall flat when it comes to execution.

c. Middle management is caught in the middle. The imperative for change and innovation is driven by the senior ranks, yet most managers still have KPIs and bonuses linked to the mainline business. They understand the excitement of new offerings, but are leery of failing in their “day jobs”.

d. Customers want a great experience, flawless service, and a winning offering. Big telco firms are wedged in the middle of the value chain. They buy content, and then deliver that content to consumers. The challenge is hearing the “voice of the customer” and then orchestrating the best solution across a complex ecosystem.

Finally, finding that new unique service – and, importantly, making it succeed in the marketplace – will take the collective brainpower not just of a telco’s workforce, but will entail deeper engagement with the customer base as well.

Success in the telecom sector takes a strong focus around innovation. This starts by defining what “innovation” means, charting an innovation trajectory and/or roadmap, and establishing process and KPIs. Then, it’s critical to mobilize everyone, throughout the organization, towards turning the vision into reality. This doesn’t mean copying exactly what Mike Harris did at Mercury Communications; rooms with bean-bag chairs do not necessarily make a company more innovative. It’s the underlying intent that matters most: turning innovation into a scalable, repeatable process embedded deeply in the company’s DNA.

Many years after Mike Harris changed Mercury Communications, the mantra still holds true: “ Competitors may copy a product, but they cannot copy a culture.”

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