Telstra and management

A great article in the AFR today by Bill Scales. Unfortunately it is behind the paywall. Bill was the former head regulatory honcho at Telstra and in this piece he speculates on what the assessment of Telstra's experiment of "outsourcing management" will be.

In large measure this is a critique of the Telstra Board because ultimately it doesn't appear that this was what the Telstra Board thought they were doing. More interestingly is the question of whether there has been any enduring change. I guess the answer is we will see.

But in the context of writing a review of Paul Fletcher's new book I was noting that in the "great man" approach to history it is often forgotten that it is the events that make the man as much as the man makes the events. How much of the last 4 years were really the culmination of events, the reaction of a fully privatised Telstra to a regulatory regime that's intent remains to confiscate rents?

I ell recall that during the benign Ziggy years the management team at Telecom New Zealand regularly told me that the fully privatised Telstra would not be as compliant. They were right. I'd argued that no sensible management team would behave the way the Telecom team said they expected Telstra to do, because it wouldn't work against Government. I was right about its futility, but not about whether it would be attempted or not.

The approach that Telecom New Zealand favoured cost them their own jobs too. They have been under new management being trying to fix the relationship with Government.

Now we see reports that Telstra is strategising on how to mend its own fractured relationship. The report also highlights just how extensive the risk to Telstra now is. Reports in the press noted that Telstra Chair Donald McGauchie was briefed on the NBN proposals and regulatory paper by Treasury secretary Ken Henry, but this was because they were together at the RBA Board meeting.

The press reported that the rest of the directors were briefed by PM&C head Terry Moran, but it appears he was joined by two other Secretaries, Patricia Scott (DBCDE) and Ian Watt (Finance). It appears the message has sunk through.

I do recall under the last Government one Minister saying to me "how many inister's does it take to counsel the chair of Telstra" as the stinging attacks mounted. It appears the answer is 4, it can be their officials, but it has to be together.