Former Vodafone executive Paul Donovan (Credit: Vodafone)
commentary It is not a foregone conclusion that the successor to
outgoing Telstra CEO Sol Trujillo will come from within the company.
Trujillo seemed to hope it would yesterday, spruiking his team
mercilessly and giving David Moffatt golden child-type praise for
his success rolling out the premium T-Life stores.
Some say that if the board felt there was an internal candidate
who really shone they would have announced the successor yesterday.
"My belief is that we've seen a lot of talent inside the
company," Trujillo said, adding that he thought the board
recognised that. But of course he would want it to be that way — it
would be a massive feather in his cap if it could be said that he
moulded his successor. I can see his resume now: Trujillo, founder
of Next G, succession-planner extraordinaire.
Yet as he himself said, the decision doesn't rest with him. It
will ultimately rest with the board, which will do due diligence
and choose a candidate on their merits, not on the outgoing CEO's
wishes, such that overseas candidates such as former Vodafone executive Paul Donovan (pictured
above) could be a strong chance.
Some say that if the board felt there was an internal candidate
who really shone they would have announced the successor yesterday.
I believe they might be right.
The problem I see with an internal candidate is McGauchie's
avowal that the board would look for an "outstanding leader".
McGauchie gushed about Trujillo yesterday, sounding like a young
bride talking about her husband: The first time she saw him she
just 'knew'.
"I was frankly overwhelmed by what I saw when I met Sol the
first time in Palo Alto a bit over four years ago and the vision
that he showed, the strategic thinking that he showed about this
industry," he said. "Indeed he has delivered above and beyond
anything that I think we could have reasonably expected."
If McGauchie is going to remain chair, I can't see him choosing
a candidate that doesn't give him this gut feeling. Moffatt might
have a hope, but Stanhope certainly doesn't.
The crisis which is currently occurring is a global financial crisis. It's going to take globally savvy executives to ride it out.
This is where people would argue that we don't want another
Sol. But the board doesn't care about how the competitive market
is doing, or what the public thinks about the CEO. All they care is
about the share price, which although it took a dive after Telstra
was thrown out of the National Broadband Network, hasn't fared as
badly as many others.
And the argument about having an internal candidate who has
a good relationship with the government doesn't really cut it
with me either. Sol didn't act out his antagonistic strategy
around the NBN alone; the board was behind him making decisions
too. Trujillo is going, but is the rest of the contingent who
decided on that brinkmanship? And will they have changed their minds?
McGauchie puts down the NBN at every step. It's unviable, he says,and
Telstra could do lots of other things. He told the media yesterday to get over its
NBN obsession. I just don't think he'd choose someone on the strength
of getting back in the government's process.
So if not internal, perhaps an Australian at least? Well the
problem is the sheer size of Telstra. It's a behemoth. Which means
that if you want to have someone who's got telco experience instead of choosing
the CEO of a supermarket chain or an energy utility company. There are
few in Australia who have had experience of large enough divisions or companies
which would have them comfortably stepping into Trujillo's shoes.
As mentioned in our
top ten list of candidates, Optus CEO Paul O'Sullivan
would be a prime candidate and right for a move, but his company is
in the middle of a bid for the largest infrastructure build to be
seen in decades. I don't think he'd leave the ship for the
company that lost the deal. I have also been assured by insiders
that they would be excessively surprised if O'Sullivan would take
up the position.
Paul Broad from AAPT? Doubtful. The Telecom NZ subsidiary
hasn't been a top performer and has been weathering a storm of
speculation about possible takeovers. 3 CEO Nigel Dews will be too
happy with the prospect of running VHA to think about it. Vodafone
CEO Russell Hewitt would be a possibility if the board was willing
to run a blind eye over his unconventional qualifications.
Who does that leave us with? Small fry.
Consequently, my eyes have turned overseas, which to me makes almost more sense in
any case, as the crisis which is currently occurring is a global
financial crisis. It's going to take globally savvy executives to ride it
out.
There are any number of candidates which could be picked up. Of
course the head of BT Retail, Gavin Patterson, has to be
considered, but he hasn't even been in that position for a year.
Telstra would have to poach him with the requisite pay packet. Although I
would love it if he did become CEO of course, he's quite a
looker.
Paul Donovan, on the other hand, has just finished his stint as
the head of Eastern Europe, Middle East, Africa, Asia-Pacific and
affiliates at Vodafone. He was a contender for the top job, but
missed out when Vittorio Colao, who had been heading up the
European division, won the role.
Weeks after Colao grabbed the reins, he split Donovan's role
into two, reportedly to strengthen his leadership position. Unsurprisingly, Donovan resigned.
There are a few things which make my ears prick up about
Donovan. The first was that rather than accept a lesser position
and be ruled over by a man who was once his peer, he left Vodafone.
There were rumours that he would be the CEO of Arsenal of all
things, but it seems that was not to be. He will now be looking for
a challenge, something to prove he had what it would have taken to
have been the top dog.
Coming from Vodafone, he will understand the mobile and consumer
space, which will be a large part of Telstra's strategy going
forward. He has held many roles within the company, including CEO of
its Irish division.
The clincher for me is his directorship in China Mobile. Donovan has, like Sol, long seen the potential in China and was Vodafone's face in the region.
Yet he won't neglect the other areas. He has fifteen years of
telco experience, including at British Telecom. He has spent time
in the hyped company of the decade, Apple, as well as
filling positions within marketing at brand powerhouses Coca Cola
and Mars.
Having tackled the role of global director of business
integration, leading One Vodafone, the group's business
transformation program, he will understand what Sol has been trying
to do with Telstra's own transformation program.
He has also
worked within Optus Communications as commercial director, giving
him an Australian perspective. He wouldn't be coming blind to the
role.
But the clincher for me is his directorship in China Mobile.
Donovan has, like Sol, long seen the potential in China and was
Vodafone's face in the region. He could nurture Telstra's
investments there. Perhaps he could even send tendrils into India
where he has had experience on the board of Bharti Airtel.
Despite having no idea what he is doing now, apart from sitting
on the board of China's Mobile, or whether he would be willing to
move somewhere he couldn't use his season tickets for Arsenal, I
think he has something to prove, and perhaps the board might let him do it.
