A View from the Top – David Thodey Interview Part 3 – Reflections, On-going Challenges and Lessons Learned.

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We are sharing the experiences of David Thodey, the former CEO of Australia’s largest Telecommunication company and strong Enterprise Social Networking advocate. In part 1 we looked at the key business issues Thodey faced in his six year tenure as CEO, and how he came to discover the ESN solution Yammer. In part 2 we traced his challenges, experiences and activities in formally adopting the platform as a key communication vehicle for the organisation. In this final part we bring it all together to provide reflections, challenges and lessons learned to those embarking on a similar path to Thodey’s.

For the major part, these reflections come from Thodey directly. However, at SWOOP we have had the opportunity to apply our online social networking analytics to several organisations around the world, including Telstra. We think there is much to be learnt from each others’ experiences. The analytics can provide a sharp focus to areas of need. We therefore take the liberty of weaving in additional insights gained from these comparative analyses, to provide you the reader, with as greater insights and support for your ESN implementation use as possible.

About using Yammer Thodey reflects: “It changed me personally. Conversations with people were real and authentic. I learned things“.  Often in the corporate world we find ourselves playing the ‘role’, rather than who we really are. Harking back to Thodey’s initial statement about ineffective communications, one could now appreciate this. Crafted messages from the CEO’s office. Equally crafted messages back up to the CEO’s office. Often the only authentic conversations happen in localised horizontal layers in lunchrooms and cafes. ESN’s and Yammer have the potential to change all of this. Authentic conversations across the whole organisation? We think it’s entirely possible, based on Thodey’s experiences.

On managing change Thodey is just as forthcoming. “The nature of work has changed. Collaboration is a necessity, not a nice-to-have. We had to change….and Yammer is a tool for facilitating significant change” .  Thodey is not alone here. A recent article from McKinsey entitled “Changing Change Management” identifies how traditional organisational change management must be disrupted by applying digital toolsets. Introducing change through stage-managed line management pronouncements and a plethora of focus group discussions does not scale and lacks an effective feedback loop. When you apply ESNs, discussions can be had in real-time and are accessible to all. Miscommunications or misunderstandings can be addressed and nipped in the bud. As Thodey enthused “Things that staff really cared about didn’t have to wait until the annual staff engagement survey to be aired”. As with all other digital disruption case studies, the traditional time honored way of doing things has been “blown out of the water”. Organisational change is always hardest in long established heritage style organisations like Telstra. But as time moves on the reports of a new way of working are now becoming commonplace. Author, futurist and commentator Jacob Morgan in his most recent book  “The Future of Work”, cleverly articulates what the (near) future world of work will look like. He provides many examples of organisations working more as a network, some with no managers and all largely digitally enabled. Typically, today’s examples are for smaller organisations of less than 10,000 employees. Morgan acknowledges that the majority of today’s larger organisations have grown up still under the influence of Henry Ford’s automotive empire. We explored some unfulfilled challenges with Thodey.

As much as Thodey was enthused at what an ESN and Yammer could do for him, he acknowledges that for large, established enterprises like Telstra, the journey has just begun. The experience with the response to the missed KPI discussion brought home the fact that the organisation was still not thinking as one. His desire to have customers and partners involved in their Yammer conversations was also still work in progress when Thodey left. The mean score for active users in our benchmarking group was 20%, with a best score of 31%. The results suggest that the 90% readers, 9% responders, 1% creators rule of thumb no longer applies.   But what is a good score? How much should people really be interacting on the ESN? The jury is still out on this one. Those that see the platform as a simple Q and A forum might be quite happy with infrequent usage. Others, which includes Telstra, have ambitions to drive usage right down to the team level. We asked Thodey what he thought would be a good target and he suggested that perhaps up to a 60% score for active and interacting staff should be achievable.

Other areas he reflected on included the use of the ESN to enable staff to manage their own profiles, with their competencies assessed by peers; “we shouldn’t have to run to HR every time we need to find out something about someone”.  As well as being a fan of open communication, Thodey is also a big fan of open data; “we can’t control information any more…we just have to go with it”. We have seen examples of this with the government Open Data initiatives. It is however a risk/reward decision, as we have found when personal privacy information violations have occurred. Analytics also got a mention in his reflections “analytics are very important, and we would have benefitted from better analytics”.  On the topic of tools, Thodey was careful not to oversell the tool over the human aspects. He did however comment that “Where I think people need help is in understanding what to use when. There is a time for email, or for writing a document. But if you want open and authentic conversations at scale then email is not it.” [1]

Finally we closed our session with a question on what advice he could offer to other CEO’s and Leaders like himself. Succinctly he responded with “You [emphasis on ‘you’] need to decide what you want from a tool like Yammer. For me personally, it was an imperative to have authentic and real conversations with my staff”. We think he is not alone with this aspiration!

[1] We have analysed the use of multiple channels of communications including Yammer, Email, Instant Messaging, Personal contact etc..here http://blog.optimice.com.au/?p=552

A View from the Top – David Thodey Interview Part 2 – Reflections on experiences “in use”

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In Part 1 of this interview series with David Thodey, the former CEO of Telstra and strong Enterprise Social Networking advocate, we covered his reflections on current frustrations with communications experienced by CEOs and the discovery of Enterprise Social Networking (ESN) and Yammer. In this part we continue the journey of how he personally made use of the platform.

One of the impacts of “going formal” with Yammer is that we will invariably see the corporate governance engine kick in. Legal will be concerned about ill-considered written statements leaking outside the organisation and the potential trouble it might cause. IT security would of course want to give the software a thorough going over. Thodey experienced all of these reactions, but was forthright enough to state that the benefits far outweighed the risks involved and so the implementation, enterprise wide, went full steam ahead. It helps when you are the CEO!  Without wanting to denigrate the good work that these people do, the risk/reward equation is not always as apparent to those tasked with ‘protecting the cathedral’. The importance of having a very senior sponsor for an ESN deployment cannot be overstated.

Thodey’s early impressions were encouraging. A complete and pleasant surprise was how self-regulating the network was. Peer level staff, more often than not, dealt with inappropriate postings, without the need for formal line management intervention. He saw elements of thought leadership arising from areas in the company that he was completely unaware of. He became aware that Telstra staff were the harshest critics of Telstra’s products. When he saw interchanges like these he made a point of using the platform to ‘notify’ the relevant product manager of the discussion that was going on. More often than not, the product manager was unaware of the sentiment that was being expressed about their product.

Another response that his hands-on approach provokes is “where did he get the time as a busy CEO?”. Well Thodey did admit to “cheating a little bit”. He did have staff who were monitoring the conversation activity to alert him to conversations they thought he would be interested in. But he was adamant that all messages from him had to be authentic, which is why he wrote every post and reply himself.

There were also some amusing side stories when the CEO decides to sidestep the hierarchy and engage directly with staff.  In Thodey’s words: I used it to break down stereotype views of management. Someone wrote about a topic being discussed “Management will never approve of this”, and I commented “Hey – I am management, and I like it! It helped us change peoples’ perspective of management.”

Thodey’s insistence that outcomes be prioritised over hierarchy and process led to his most famous post: “What processes and technologies should we eliminate?”. It received over 700 responses and clearly signaled the internal frustrations staff were experiencing. Thodey had also instigated a single customer KPI for the whole company and here he reached out directly for help to reach their collective target. The back story, as Thodey tells it, is that for the first two years they achieved the single customer KPI and everyone was happy and content. However on the third year the target was missed along with the bonuses attached to it. Yammer lit up with different areas complaining about how their area had met their local target and the unfairness of how they should miss out because of the poor performance of others. He had to get online to emphasise to the staff that they had all signed up for the single customer KPI and this was a one-company initiative.  The sobering thought here is that the ESN can do a lot to facilitate collaboration, co-operation and the much sought after “one-company” vision. But people are still people, conditioned to industrial ways of working, especially in large established enterprises like Telstra. Change will happen but not overnight.

Another area that Thodey found that the ESN facilitated well was policy development. Traditionally, the development of policies is the responsibility of senior management and perhaps a closed suite of focus groups. Using Yammer, the executive was able to release “policies in progress” to all staff for comment, and indeed direct input into workable policies. This led to new policies being effective from day 1. Thodey candidly suggests that senior executives do not know everything and freely admitted to a few poor policy instigations of his own; some of which took years to unwind.

As with many Yammer adopters, Telstra’s initial introduction was bottom up use of the free offering. We have now analysed data from many Yammer users and found that this early adoption phase can last as long as 4 to 5 years. However, real enterprise wide adoption only ever starts to happen when the ESN is formally endorsed from the top.

In the next and final part we bring together the reflections, ongoing challenges and lessons that can be learnt from David Thodey’s “View from the Top”.


A View from the Top – David Thodey Interview – Part 1: Why Enterprise Social Networking?

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In her article “Why No-one Uses the Corporate Social Network”, where Charlene Li bemoans the lack of leadership participation, David Thodey, the then CEO of Australia’s largest Telecommunications company, was highlighted as a rare exception. Not long after the article was published, David Thodey retired from Telstra and on to his next challenge. The accolades following his 6 year rein at the top of Telstra were spectacular. In the words of Telstra Chair Catherine Livingstone “David has been an outstanding chief executive for our customers, shareholders and employees. His passion for customer service and instigating true cultural change has had an enormously positive effect on our company, which has been refTelstra bloglected in our financial performance in recent years”. The business press was no less generous with Business Insider headlining their article on the announcement of his retirement with “David Thodey is leaving Telstra, having doubled the value of the company Australia once loved to hate”  and the Sydney Morning Herald with “Mr Thodey has been credited with a remarkable turnaround in Telstra’s fortunes, taking its share price from a historic low just four years ago and lifting it to a 14-year high”. We were fortunate recently to be able to catch up with David to gain his reflections on Enterprise Social and the part it played in helping achieve Thodey’s vision for the company

To provide some additional context to Thodey’s achievements at Telstra; Telstra is Australia’s privatised national telecommunications carrier, with some 38,000 staff treading the familiar path of many national carriers world wide, toward the end of last century. Telstra’s privitisation happened toward the end of the 1990s. As Australian citizens, we were offered the opportunity to buy into a modest allocation of shares. Here was a large bureaucratic public institution about to have the magic wand of commercial imperative employed, at a time where the Internet and mobile telephony were taking off. Sitting as the current monopoly owner of the required digital infrastructure, who wouldn’t want to invest? I, as many others did. I even took out full allocations in the names of my wife and children to make sure we made the most of this ‘once in a lifetime’ opportunity. To our dismay the following decade or more saw a procession of imported CEOs, erosion of their market share by more agile competitors and a share price that was going backwards rapidly. At the risk of sounding overly patriotic, it was endearing to find a homegrown CEO led the turnaround, after the often tumultuous tenures of his predecessors.

While much has been written about Thodey’s business achievements, this article is about his unique contributions to the use of Enterprise Social to empower and change a business. Like Charlene Li, we are passionate about the potential power of Enterprise Social. Prior to our interview, we had the opportunity to apply our social networking analytics to some historical Yammer use data during Thodey’s tenure; so we were well prepared for our interview.

Our interview took place appropriately in one of the offices for improving digital productivity at Australia’s national research organisation, the CSIRO, the organisation Thodey now chairs. It is not often we get to talk candidly with CEOs of major corporations that have embraced social. Our first question therefore was to ask Thodey to tell us his story and what drove him to want to embrace enterprise social networking to the extent that he had.  With little reflection his initial response was “ineffective communications”, quickly followed by an “e-mail only” culture. Additionally he felt information silos were reinforcing an internal only focus, often at the expense of the external customers. Of course this is no surprise to Enterprise Social Networking (ESN) zealots like us, but it was nice to have this reinforced from the start. Expanding on this Thodey then went on to talk about CEO specific issues, where communications both into and out of the CEO’s office are carefully monitored. In this context it is close to impossible for the CEO to get to the ‘truth’ of a given matter, or to indeed have unfiltered authentic dialog with staff beyond his or her direct reports.

The discussion moved on to hierarchy and process. In essence these were seen as the ‘enemy of effective communication’, yet we did sense an acknowledgement of a ‘necessary evil’. Thodey was adamant though that “processes must be enablers for getting work done, not impediments” and therefore should not take precedence over the right outcomes, which unfortunately is often the case. For us it was enlightening to hear from someone at the very top of the hierarchy bemoaning its existence. An analogy might be someone who has worked hard to afford a penthouse suite at the top of the tallest building in the city. From there you can get the best views of the city below, the parks, other buildings, the traffic, the more seedy areas, as well as impending weather events and potential impacts. Unfortunately, unlike the occupant of this penthouse, the CEO must always wear these special glasses with rose tinting, which nicely filters out the seedy areas, the traffic and makes sure that the sun is always shining.

Thodey admitted to being curious more so than excited by the prospect of Yammer at first. Being a baby boomer with a strong exposure to technology (he previously had been the local IBM MD), the curiosity is always there, but with a healthy cynicism of the hype that often pervades the IT industry. His moment of truth however came when he saw Yammer used by a young service centre operator, having to deal with a technical enquiry about a Nokia 6010 mobile phone. It was apparent that when this phone was released the operator was probably still in junior primary school, so he did what came natural and put a request out onto the network. The response was rapid and willing, with no evidence of process or hierarchical compliance. The customer was going to get a response in close to real-time. This is what played to Thodey’s keen sense of customer service and the prioritisation of positive outcomes, over process. He was hooked and wanted to get Yammer properly set up as a fully functional and endorsed service.

In Part 2  and Part 3 of this series we will cover Thodey’s personal experiences with the introduction and ongoing use of the platform in his role as CEO.


Written by

Laurence Lock Lee, PhD

Co-founder and Chief Scientist, SWOOP Analytics