From Telco to Hellco: I’m the CEO of a large telco. I want to destroy it as fast as I can

Many of the telco industry’s fittest and finest have just returned from a week in Copenhagen at TM Forum’s flagship event, DTW24. Iain Morris of Light Reading suggests in an article that Copenhagen is an apt location for the event because many industry representatives are “in little mermaid land.”

The tone of his article is urgent and critical, rightly highlighting the severe challenges faced by the telecom industry. His story conveys a sense of alarm in response to TM Forum re-issuing a “code red” alert once more. It’s an alarm that emphasises the need for immediate and transformative action to navigate ongoing challenges / disruptions faced by many telcos globally.

The despondence in Iain’s article triggered the thinking behind today’s blog – an exercise that draws inspiration from Charlie Munger’s inversion principle, where one approaches a solution to a problem (preventing the imminent death of telco) by first considering it as the opposite outcome (intentional destruction of a telco). By identifying actions that would destroy a telecommunications company (and industry), perhaps we can better understand what the industry can seek to avoid. Munger, renowned for his wisdom in business and investing alongside great friend Warren Buffett, often used this technique to gain deeper insights and/or ensure robust decision-making prior to investing. It seemed to work for him. Let’s see if it works for us too!!

So here goes:

I’m the CEO of a large telco. I want to destroy the company as fast as I can. Here are the steps I’ll take to bring about its speedy demise:

1. Ignore Regulatory Compliance: Fail to adhere to industry regulations and standards. This can result in hefty fines, legal battles, interoperability challenges and even immediate loss of operating licenses (the fastest way to kill off a telco??)
2. Neglect Network Maintenance: Ignore regular maintenance and upgrades of the network infrastructure [this includes underinvesting in OSS/BSS solutions naturally]. This will result in frequent outages, poor service quality, and customer dissatisfaction, followed by customer departures (the second fastest way to kill off a telco??)
3. Cut Costs on Customer Service: Reduce investment in customer service, leading to long wait times, untrained support staff, and unresolved issues. Again, customers will quickly become frustrated and leave for competitors
4. Disregard and Divest Innovation: Avoid investing in new technologies and ignore emerging trends. Remove any form of in-house R&D investment. Seek only the counsel, products and partnership of other large suppliers that similarly constrain investment in innovation. Totally ignore the long tail of innovation stemming from small to medium-sized organisations because they don’t meet mandated procurement guidelines. Not only will customers see a lack of compelling new technology offers, but top-level talent will leave the company in droves (or never even join in the first place)
5. Increase Complexity in Every Way Possible: Ensure systems are a spaghetti mess, processes are ad-hoc and impossible to navigate reliably, make offers confusing and basically just tick all of the 13 boxes that introduce more friction into the telco equation. Find every other little trick in the book of complexity that is possible too!! Don’t even contemplate any reduction projects
6. Undervalue Employees: Create a toxic work environment with poor management, lack of career development opportunities, minimise diversity, encourage politics, Machiavellian behaviours, bureaucracy and bullying as well as providing inadequate compensation. This will lead to high employee turnover and a further loss of capability
7. Mismanage Finances: Engage in reckless financial practices such as excessive debt, poor cash flow management, allocating more money in expenditures than are made in revenues, and a general lack of financial transparency / governance. Spend more money on financial engineering than technological engineering. This will erode investor confidence and lead to financial instability
8. Alienate Partners: Treat suppliers and business partners poorly, passing as much cost and risk on to them, whilst also extending already long payment cycles. This surely leads to strained relationships and reduced collaboration. This can disrupt the supply chain and impact service delivery as well as reputational damage, increased costs and operational delays. Lengthy payment terms can even lead to financial instability in the supply chains that the telco relies upon
9. Poor Strategic Planning: Fail to develop and execute a clear or cohesive business strategy. Lack of direction, and even misdirection, will result in missed opportunities and an inability to respond to market changes. Misaligned objectives can trigger conflict and other detrimental effects between internal business units too
10. Ignore Customer Feedback: Dismiss customer feedback and complaints. This will lead to a disconnection from customer needs and preferences, driving them to competitors who listen. Drive down already low NPS scores by using call deflection techniques like IVR and online FAQ pages to ensure customers must self-serve and self-correct any issues they have with their networks, services, bills, etc. Reduce human agents and ensure it is almost impossible for customers to ever reach them or hear any feedback
11. Compromise Security: Neglect cybersecurity measures, making the company vulnerable to data breaches and cyber-attacks. This can result in loss of customer trust and legal consequences, in addition to customers leaving apace
12. Procrastination and Delaying Tactics: Delay decision-making and postpone essential actions. It can wait until tomorrow, then repeat endlessly. This creates a culture of inertia, causing missed opportunities and a failure to respond to critical issues promptly
13. Not Keeping Promises: Fail to deliver on increasingly grandiose commitments made to customers, employees, and partners. This will destroy trust and credibility, leading to a loss of business and deteriorating relationships
14. Discourage Resourcefulness: Suppress innovation and creativity among employees. This will prevent the company from finding effective solutions to problems and stifle growth (in the company or its people)
15. Avoid Differentiation: Offer the same products and services as competitors without any unique value proposition. Better yet, offer the same old legacy products that are already in rapid decline. Then offer hundreds of product variants so it’s almost impossible for customers to choose between an array of barely-different offerings. This not only makes it difficult to stand out in the market, but also results in customer irritation and attrition to more distinctive brands and products
16. Complain About Market Conditions: Focus on external market challenges and regulatory constraints instead of taking proactive steps to adapt. This victim mentality prevents the company from finding opportunities in adversity and fosters a defeatist culture
17. Neglect Marketing and Branding: Fail to invest in marketing and branding efforts. Increasingly focus on pay-per-click digital banners. Without strong brand recognition and effective marketing strategies, attracting new customers and retaining existing ones becomes challenging
18. Limit Vision and Leadership: Provide weak leadership without a clear vision for the company’s future. This leads to confusion, lack of direction, and low morale among employees
19. Reduce Head-count: Reduce thousands of jobs to save one (the CEO’s) and impress shareholders. Give generous redundancy packages to the talented members of the team who can easily find a job elsewhere, but keep all the dead wood
20. Cull Training and Development: Ignore the need for continuous training and development of employees. This results in a workforce that is ill-equipped to handle new technologies and market demands. The high staff turnover fostered by the “initiatives” in earlier dot-points will exacerbate the drain on knowledge and competency
21. Ignoring Data and Analytics: Overlook the importance of data collection, processing and data-driven decision-making. This leads to gut-feel (uninformed??) strategies and missed insights that could otherwise drive growth and efficiency

What else have I missed?

The main principle of the inversion technique is to identify what not to do. Sadly, when I look at some of these points above, I see a status quo rather than an avoidance strategy.

Okay, so we have some ideas about what we shouldn’t be doing but I’m never satisfied to just raise more problems. I’d rather share with you a bunch of solutions that might just be able to reignite the telco industry. I treat it as my (and our) obligation!

As a start, we can do the opposite of all the dot-points above, since this is the entire concept of the inversion technique. But I’d also like to re-share this old post that looked to reframe the possibilities for the telco industry – a playbook of fixes that leverage the many strengths and advantages it still holds.

I’d love to hear your thoughts too on what we can do to inspire and reinvigorate. Please leave us a comment below!