Weighing the odds for the new Sol

Weighing the odds for the new Sol

Summary: Telstra changed so much internally under Sol Trujillo's watch that it seems likely the company's next CEO will be drawn from a small pool of executives who are already well practised in the Way of Sol.

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TOPICS: Telcos, Telstra
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Ex-US president George W. Bush was widely lambasted for a variety of reasons during his eight years in the Oval Office, but some historians believe Dubya will be more kindly judged by history after the immediate shock of his transition has well and truly worn off.

Telstra CEO Sol Trujillo
(Credit: Telstra)

Will Australia be so kind to Sol Trujillo — or his successor?

For all the vitriol thrown at Trujillo heaped upon the past few years, he has been very successful at doing the thing he was brought onboard to do: make money for Telstra's shareholders. He confirmed this as his raison d'etre at last week's World Mobile Congress, when he countered attacks from Skype and Google over Telstra's lack of openness by pointing out that "I have a responsibility to make money".

And if that meant stifling the evolution of Australia's telecommunications along the way, so be it; every war has its weapons, and its casualties. Yet while analysts and observers dissect Trujillo's legacy — which, by the way, also included a major structural transformation project and the launch of Telstra's critical Next G mobile network — all eyes will be on his replacement to see whether we can expect more of the same, or a completely new direction.

While the latter might seem appealing as a way of reviving Telstra's flagging and all-important share price, I reckon two things are certain. First, that Telstra will choose to continue the path that Trujillo set it on: consolidating its infrastructure and refocusing its broadband efforts around Next G in the wake of Telstra's NBN embarrassment. Second, that the person to do this will come not from some massive global talent search, but from within its own internal ranks.

Trujillo was imported to bring global perspective to a newly privatised but highly parochial Telstra, presumably to put it in a position to consolidate its chokehold over Australian telecommunications and extend its business across the Asia-Pacific region like its competitors are doing.

It may be persisting with its acrimonious anti-government posturing and its dismissively anti-union stance, but Telstra still changed so much internally under Trujillo's watch — and still has so much of his vision to realise — that it seems unlikely that the company can afford an infusion of fresh blood and ideas right now.

That narrows down the list a fair bit: with most of the executives named in ZDnet's top-10 list currently based overseas, it seems reasonable to assume that the next CEO will be drawn from a small pool of Telstra executives who are already well practised in the Way of Sol.

That would include David Moffatt, currently group managing director for consumer marketing and channels; Kate McKenzie, group managing director of Telstra Wholesale; Michael Rocca, group managing director of Telstra Networks & Services; Deena Shiff, group managing director of Telstra Business; and David Thodey, group managing director for Telstra Enterprise and Government.

While Telstra has 15 key divisional executives, these five stand out because of their relative depth of experience in Telstra's core areas — areas such as mobile and wholesale. Both will be essential to Telstra's business going forward: mobile content and overseas expansion will strengthen Telstra's Next G story, while wholesale expertise will be critical to preserve the role of Telstra's nationwide network and shape its relationship with the NBN as it is eventually built.

Moffatt's involvement with Telstra's large-scale and innovative fixed and mobile content-based business would seem to make him a serious contender for the job, particularly given his previous experience as CFO. Deep financial expertise would give him extra marks in helping Telstra navigate the global financial downturn relatively unscathed.

My money, for what it's worth, is on Deena Shiff, who led Telstra Wholesale through the formative years between 2001 and 2006

McKenzie's legal and regulatory experience, as well as her current role in Telstra Wholesale, give her many of the core skills for the job, but extending this into new growth areas might put her a bit outside of her comfort zone; mobile and content strategy, among other things, will be critical.

Rocca's seniority, expertise, and familiarity with Telstra's most important business would put him in good stead, since he has the technical chops that many of the others lack. However, years spent so close to the coal face may well limit his forward vision.

Thodey has previous experience running Telstra's mobile division, and now has strong big-business credentials as a relationship manager. His previous role as CEO of IBM shows he has the wherewithal to run a large business, and his services expertise would mean he's intimately acquainted with Telstra's capabilities. His weak spot is lack of consumer expertise — and, I presume, familiarity with content and the other things that drive consumers wild — would be a weakness since Telstra's strategy seems heavily built on shock-and-awe tactics.

Thodey and Moffatt seem like standout candidates, but my money, for what it's worth, is on Shiff, who led Telstra Wholesale through the formative years between 2001 and 2006. A Trujillo appointee to her current post, she can be counted on to continue the Way of Sol.

Her 20 years of experience in legal and regulatory issues make her well-prepared to continue Telstra's battle against government regulation; her wholesale expertise will inform infrastructure strategy and flavour Telstra's role with regards to the NBN; and her business experience puts her in touch with the real-world needs of real, paying customers across both fixed and mobile spheres.

US voters re-elected George W. in 2004 despite his flagging popularity, because there was a sense he — like Trujilo — had started something only he could finish. Yet while his successor was clear months before the actual US election, the result of Telstra's executive search is far less certain.

While the NBN decision will be the year's most newsworthy story, expect a level of interest in Trujillo's successor not unlike that afforded to the Oscar race this past weekend, when months of hype about Heath Ledger and 'Slumdog Millionaire' proved right on the money. While they were sure things, however, the race to be Trujillo's successor is still wide open.

Who are you betting on as Sol's successor, and why? Can Telstra afford a change in direction? Does it need even one?

Topics: Telcos, Telstra

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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16 comments
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  • Super Sol.

    Sol will be remembered as one of the greatest (possibly the greatest) businessmen Australia has seen. He has changed the mindset of Telstra and shown that Australian business people should be more positive in their actions.
    When Sol does decide to leave think it is time for an Australian CEO for Telstra.
    anonymous
  • You can't be serious!

    Not sure how you would judge him to be the "greatest" ...... certainly as a shareholder I have seen my value decline greatly since he arrived, as a customer it is still the highest price service in the country, for customer service it has got considerably worse - especially for those of us on the "new" biiling system, as a company they have just announced a profit decline when the 3 competitors have announced increased profit! His biggest noise is all around nextG, a network, not results. And as to the greatest , i think you forget about Kerry Packer, Lowry, Murdoch, and so on
    anonymous
  • Supernumerary more like

    Sydney, you could be taken as being blind, seriously. Sol will become remembered as being the one Telstra CEO who never managed to make his mark. The fact that he will cut and run on the 30th June proves this to be the case. No-one bails out when they are successful at what they are doing.

    Telstra need a leader for the times. Time to cut back on extravagance and time to remember that Telstra is a company that once had a 100% strangehold on telecommunications in Australia and as such they have a responsibility to the community they serve until such times as a competing network can be built.

    Rights come with responsibilities and Telstra is going to have to come to terms with that. It's not all bad but the bottom line is that in the last few years we've seen jobs for the boys, overseas junkets and other corporate extravagance at the same time as seeing network servicemen resorting to using Coke bottles and plastic bags to weather-proof junction boxes and other equipment vital for the integrity of Telstra's network.

    There has been nothing to crow about and Sol's replacement will have it all before him. Catching up won't be easy but with some common sense it is certainly achievable.
    anonymous
  • Magic Mel.

    Mel you seem to have all the answers. You get my vote.
    anonymous
  • Deena

    I used to work at OTC and remember 20 years ago having a couple of meetings with Deena Shiff, who used to run OTC's small regulatory team. I can't say I formed any strong impression of her at the time, but amazing to think she could soon be running Telstra. Makes me wonder what I've done wrong with my careeer.
    anonymous
  • "make money for Telstra's shareholders"

    If that is how he measures his success then

    1. Drove down share price from mid $6 to mid $3
    2. Telstra was pushing out $7bn in free cash when he started, it's close to half that today
    3. Embarked on $25bn transformational program which isn't finished and we are waiting to see what it reaps
    4. Stuffed up NBN bid wiping billions off future revenue prospects

    He clearly hasn't made money for Telstra's shareholders, what he has done well is run a very effective PR campaign convincing journalists that he has done a great job for shareholders.
    anonymous
  • Shareholders' thoughts?

    And yet so many people have kept their money with the company. What do the shareholders here think? Has Telstra been delivering what you expected? Did the loss of the NBN make you sell your shares? Will Trujillo's departure make you sell? Or buy? Have your shares given you the dividends you wanted? Or have you just kept your shares hoping they'll go back up?
    anonymous
  • telstra/pacific brands

    The Sols and sue morpeths of corporate world are raping this planet and should be brought up on charges and jailed
    anonymous
  • Maybe, maybe not

    Sydney, I don't pretend for a second that I'd make a gun CEO but for the jobs I've had, both at management level and in the past at front line level I've done well, and to the best of my ability. I've also been proud of the fact that every time I've received a promotion or a better job I've left my desk clean and not littered with unfinished work for my replacement to worry about. I've also been paid on merit and not for poor performance. Sol won't be able to hold similar to his own credit when he leaves, will he...
    anonymous
  • I can repeat the views of one

    I have a mate who has about $8,000 worth of Telstra shares, or at least that is what he paid for them though I kow they ren't worth $8,000 or anywhere near it at the moment though I am digressing.

    His opinion mirrors Ikka's view pretty much. He is upset with Sol's performance in the role of CEO, upset with Sol's salary given that Telstra's dividends are the only KPI that has either stayed fairly static or improved during Sol's tenure, upset with Telstra's shrinking market share and upset with Telstra's loss of a chance to build the FTTN.

    With all that in mind I think there is little for Telstra shareholders to be impressed with. I am glad I am not one.
    anonymous
  • @ supernumeracy more like

    Hi Mel,

    As you ignored this previously (well apart from a possible childish anonymous swipe), I thought I'd enquire about your thoughts in relation to my previous comments. That is, if you still aren't too afraid to debate me?

    Firstly a quote. ZD Net: ..."The federal coalition, in contrast, paid tribute to Trujillo, saying he had made Telstra one of the world's most successful telecommunications providers... "The opposition's broadband and communications spokesman Nick Minchin said Trujillo provided strong leadership and vision in transforming Telstra"....

    And why wouldn't they love Sol? After all Telstra is a far right company, as witnessed by their current CEO, Chairman, Execs and their right wing anti worker policies.

    So just admit it Mel, *without getting s---tty and starting another flare up* but if it wasn't for your personal situation/grudge with Telstra's IRC, you'd be 100% behind Telstra because really, they stand for all you hold dearly, otherwise. Ultra conservatism, master/servant, anti union, pro Liberal party and the list goes on.

    Although for once I agree with you and I'm yahooing too, seems your Liberal hacks are saying the complete opposite to both you and I and not yahooing, Mel. Curious.

    No comment again Mel? That's not like you.
    anonymous
  • Gun CEO

    Oh I beg to differ Mel.

    You would make the best CEO since, well.....

    Sol Trujillo.
    anonymous
  • Bush committed hate crimes with the stench of terrorism

    Speaking of George W. Bush:

    George W. Bush committed hate crimes of epic proportions and with the stench of terrorism (indicated in my blog).

    George W. Bush did in fact commit innumerable hate crimes.

    And I do solemnly swear by Almighty God that George W. Bush committed other hate crimes of epic proportions and with the stench of terrorism which I am not at liberty to mention.

    Many people know what Bush did.

    And many people will know what Bush didâ??even to the end of the world.

    Bush was absolute evil.

    Bush is now like a fugitive from justice.

    Bush is a psychological prisoner.

    Bush has a lot to worry about.

    Bush can technically be prosecuted for hate crimes at any time.

    In any case, Bush will go down in history in infamy.

    Submitted by Andrew Yu-Jen Wang
    B.S., Summa Cum Laude, 1996
    Messiah College, Grantham, PA
    Lower Merion High School, Ardmore, PA, 1993

    â??GEORGE W. BUSH IS THE WORST PRESIDENT IN U.S. HISTORYâ?? BLOG OF ANDREW YU-JEN WANG
    ______________________
    I am not sure where I had read it before, but anyway, it is a linguistically excellent statement, and it goes kind of like this: â??If only it were possible to ban invention that bottled up memory so it never got stale and faded.â?? Oh waitâ??off the top of my headâ??I think the quotation came from my Lower Merion High School yearbook.
    anonymous
  • Gronk alert

    "And I do solemnly swear by Almighty God that George W. Bush committed other hate crimes of epic proportions and with the stench of terrorism which I am not at liberty to mention."

    Shame that the person who took your 'liberty to mention' didn't do the job of shutting you up properly. You are a bloody idiot.
    anonymous
  • Super Sydney cash in

    Sydney you must get a mint from Sol to spout out such utter rubbish. He was a CRAP CEO utter garbage. He didn't give a flying turd about the Telco sector in Australia all he cared about was milking Australians for what they are worth. Shareholding values plummet, Sub par over priced services, massive lay offs (way before the financial crash), You would probably pat sol on the back if he shot you in the foot. People like you let people like sol to screw the country and the consumers my god get ya head out of his bum mate and look around ya.
    anonymous
  • Check this out

    http://invetrics.com
    anonymous