Late last week we published an article, “From Telco to HellCo: I’m the CEO of a large telco. I want to destroy it as fast as I can.” Based on all the feedback, you could say that it seemed to resonate!
Using Charlie Munger’s Inversion Technique, we suggested 21 ways to kill off a large telco quick-smart!
However, as I was writing the 21 kill-shots, I noticed a quite ironic trend emerging.
Perhaps because most of us are technologists, we tend to see the telco industry as being very technology-centric, perhaps even believing that its rise and fall is dependent upon technology. But if you look at those 21 failure steps, you’ll notice almost every one of them has a common root-cause, and it’s almost never a direct failure of technology.
Almost every one of them is a failure of and by people, as shown in the table below. So, and it pains me to say this as an unabashed technologist, perhaps we shouldn’t be looking so closely at technology as our saviour?? As always, it’s only ever a means to an end.
The real causes, and fixes, are more closely rooted in our human frailties, decisions and behaviours.
| Ways to destroy a telco | Root-cause of Failure |
| 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??) | Decisions (or lack of) by people |
| 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??) | There is a technology dependence, but it’s more likely to originate from decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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) | Decisions (or lack of) by people |
| 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 | This is multi-layered. Yes, individual technologies can be complex. When combined together to form the global telco network it’s one of the most distributed and complex machines on the planet.
But could it be less complex individually and holistically? Yes, and that stems from decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | We may have developed customer avoidance technologies that allow us to reduce the cost of customer feedback, but that fundamental choice to not have humans listen to other humans is a decision (or lack of) by people |
| 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 | This is also multi-layered. Humans decide to initiate cyber-attacks, but we can’t blame the telco for that.
Failures or flaws in technologies allow for cyber breaches, so this one is partly a technology failing. However, most successful attacks are due to failures by humans (eg failure to invest in suitable security infrastructure, inadvertent security flaws, social engineering, etc) |
| 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 | Decisions (or most definitely a lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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) | Decisions (or lack of) by 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Decisions (or lack of) by people |
| 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 | Looking at the tsunami of data collected / created / propagated by our OSS/BSS tools, a lack of data is certainly not a technology gap. What we decide to do with it, the questions us humans decide to ask of it (or fail to ask of it) is more where the gap and blame lies |
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