How Telstra trashed its reputation — a story of butterflies and culture

Telstra, one of whom’s deep brand themes was “the most reliable mobie network in Australia”, has become the most unreliable and trashed its reputation in just a short period of weeks.

Just yesterday I posted on the 3rd major outage of Australia’s dominant telco Telstra which left 8m customers without services. I finished the post with the comment that more would come.

I’m not sure how many butterflies are about the flap their wings and send down the Telstra systems again, but there will be more.

But no one in their wildest dreams would have thought that it would come again within 24 hours, but it did — mobile down in Melbourne CBD again!

Unconnected events, or are they?

This could be seen merely as a series of unrelated technical failures. In fact that’s how the CEO sees it. From my own perspective, from the outside looking in, I see something quite different.

I’ve mentioned in a previous post that I think complexity is one big element — layers of complexity which ultimately exceed human ability to know how things are working. Like the Google RankBrain algorithm, they know what it does but not how it works. The complexity means that butterflies flapping their wings in the Amazonian jungle are going to continue to bring down the systems.

Telstra’s complexity problem is not inherent in the nature of their business as they would no doubt plead. Rather, it is an outcome of their “Not Invented Here” “We are Different” elitist view of themselves. That view demands patches, additions, layers, interfaces, maintenance headaches and upgrade nightmares and supplier hell. Systems that may have been compatible at the start slowly become incompatible. All this is reinforced by the smugness of “power” and no accountability is ensured as it is “a team effort”.

However, the bigger element is not the self-serving complexity but the culture, and that’s why technical fixes will (1) not solve the underlying problems, and (2) it will take a long time to solve.

The connection is culture

The common factor between these so-called “unrelated” failures is a failure of culture. Like many large Australian businesses which operate — I hesitate to use the word compete — in oligopolistic comfort Telstra is a breeding ground for complacency combined with a false sense of elitism.

Add on to that the extreme hierarchy with the internecine turf battles and personal vendettas and you have a nasty environment. This most often emerges from the black caverns of survival in the bullying and cajoling of third parties and contractors — who for economic reasons have to cop it on the chin or face banishment.

And add on to that an environment where middle managers in Telstra must be sick of hearing about digital disruption and what it is going to do to their jobs. No matter what it means or does not mean it creates more and more anxiety, as does the likes of WhatsApp and TPG in their midst.

In absence of clear clues about how to adapt, the real day “job” of middle managers is more and more about just trying to keep things together, in order to keep generating profit for shareholders and bonuses for themselves. Furthermore, the sense of entitlement among the batch of middle managers following the now-retiring baby boomers is palpable. They want at least what the baby boomers got — a ticket to a nice retirement by riding the system. That’s the purpose that drives their day to day actions, which are essentially about corporate survival by avoiding risks and bad news.

It’s said that culture trumps strategy every time, and this plays out in the idea that culture is the only unique thing. The way a company works is hard to copy. Unfortunately, this also means that the way a company dysfunctionally works is hard to change.

Telstra is obviously not going to disappear. But it’s going to have to begin to wake up to the current disastrous run of outages as being more than a series of unrelated technical failures.

Culture change is a long hard circuitous road, which can only start when someone is willing to declare that the emperor has no clothes.

“Change requires one to start now here or nowhere. Both places require one to pass through the same starting point — today, right now” from Cinderella In Focus”
H.L. Balcomb

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Postscript: Telstra suffered yet another outage yesterday, 4 days after this post was written, see Telstra apologises for second outage in less than a week, third in two months. It’s actually the 5th outage in 2 months— the 3 in the blog header image, the one in the main body of this post, and the one yesterday.

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