Wednesday, July 06, 2011

More changes at Telstra

It has been 15 years since I worked for Telstra and so I can't claim any insights into its workings.

However, it does seem to maintain its world leading ability to subject itself to re-organisations.

CEO David Thodey has today announced the latest changes. I confess to not being able to fully understand them.

These changes follow those from earlier this year that occured with the hiring of Brendon Riley (from 1 March) as Chief Operations Officer and Paul Fegan as GMD Strategy and Corporate Services. There was marginal reorganisation with these appointments.

These followed the appointments in June 2010 of Gordon Ballantyne and Robert Nason in February 2010.

The biggest part of the latest decision is the creation of a "Chief Customer Officer" in the person of Gordon Ballantyne. The GMDs of both Business (with Deena Shiff replaced by Will Irving) and Government and Enterprise report to him - but it is assumed the existing consumer and country wide substructures report to him.

The centralisation of marketing functions is reported as supporting this customer focus but it is understood the CMO role still reports to the GMD of Innovation, Products and Marketing Kate McKenzie.

The appointment of Deena Shiff as GMD Applications and Ventures adds another element of confusion. I've attempted to draw up an org chart and found the easiest way to do so was to group Ackhurst, Shiff, Robbiati and Nason together under the heading "New and other ventures".

That leaves the support functions - most of which have been previously swept into the orbit of Paul Fegan previously. The release said;

Telstra will centralise key internal business support functions with improved accountabilities, eliminating duplication.

This is just the latest in what I call the Hookes Law of organisation design, and is best viewed from the perspective of the HR function. Centralised HR is very effective at creating standardised practices and efficiencies of scale, but it isn't very good at meeting the needs of the business. Decentralised HR is very responsive to business needs but leads to inefficiencies, difficulties in workforce planning and even internal competition for personnel. Neither is perfect and the best solution is to keep alternating between the two, bouncing like an undamped spring around the ideal but unachievable mid point.

Thodey's decision today ends a journey commenced in 1987 of creating customer facing divisions under the advice of McKinsey and Co. One of these days I'll write more about this.

The changes today were described by Thodey as;

part of his long-term strategy to build a stronger sales- and marketing-led culture.

I have three issues with this. The first is that I have been hearing this description since 1989 at least as outlined by Luke Bozza's presentation of that time.

The second is that a simple head count of the senior team and what their responsibilities are still has the people with actual customer responsibility in the great minority.

The third is the interesting set of backgrounds of these executives. Four of them - Shiff, Ackhurst, Irving and Geason - have made their way via the Telstra legal function. Not one of them has been grown internally through a career with customer responsibility. That says more about the culture of the organisation than anything else.

Novae Meridianae Demetae Dexter delenda est

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