The hardest thing we’ve done…changing our culture

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The hardest thing we’ve done…changing our culture

This is my last blog as part of the LinkedIn Influencer program. I announced my retirement earlier this year and Telstra’s new CEO Andrew Penn will be picking up the baton and offering his own Influencer views on key issues going forward.This month, as part of a long—standing commitment, I spoke on leadership at the Queensland University of Technology. Here are some of the ideas I shared:

The hardest thing we’ve ever done…
What an amazing time in human history, with so much change in the world. The digital revolution is all the time creating so much that is new – networked citizens, new paradigms for value creation, new ways to solve problems and learn, work, govern and lead.

The extraordinary growth, both in the capability of new technologies and the creativity of new business models, are at the heart of much of it. There is such a huge appetite for connectivity, both by people and, increasingly machines. All of this change has implications for leaders (and companies and countries) because the rate of change is accelerating. Telecommunication providers (including Telstra) are the enablers of so much of this digital-driven change, as well as having to change themselves as business models are challenged. In that context I want to share five key lessons we’ve observed in this digital age, and use Telstra as an example:


There’s no doubt this is the century of the consumer. Customers are better informed, more demanding, discerning, and ready, willing and able to broadcast their views on poor products and service. Bad service, never acceptable in the past, is even less so now. The power of connectivity and social media has changed the way people consider and buy. Our focus has been on creating customer advocates. We are not perfect, in fact we fail every day, but we are committed to customer service excellence. A strategy focused on building customer advocacy is one of the hardest strategies to follow because you have to believe improved customer service will deliver better financial results. Customer advocacy is a multi-faceted strategy, it has to be authentic and it must involve both behavioral and deep process improvements.


In a world changing quickly no business can rely on old business models to drive value – we have to challenge the status quo. Business disruption driven by technological change is challenging every industry, business, the way we deliver education, even govern; it is driving fundamental change. The challenge for us was to learn to grow and restructure at the same time, so we could reinvest. We invested to drive growth at the same time as we started to take cost out of the business. We restructured existing businesses while we invested in new businesses. We drove process improvement, digital enablement, restructured channels, reviewed every business process to reduce our cost structures. The result is that Telstra will be a fundamentally different company in five years as we restructure our business.

#3 CULTURE BEATS STRATEGY EVERY TIME – but you still need a strategy

Building a customer service culture was the most important challenge we faced in the last five years. It was also probably the hardest thing we have ever tried to do.  Our cultural change journey took the company at least part of the way from a compliant culture to one where we trust each other to deliver outcomes. The leadership challenge was getting the customer to be the centre of everyone’s agenda and thinking more broadly than just ‘What is my contribution?’ If you make the customer the final arbiter in everything it actually makes you more responsive to the market, stops internal factionalism and rallies everyone to something that is bigger than any individual. Customer service is really about culture and values and getting there must be a ‘whole’ of company initiative – everybody, not just those in customer facing roles must be actively involved.

Leaders have to focus on helping their people believe that this is real and that you really mean it. Get it wrong and they can be your biggest critics. All of this will depend on your personal commitment and mean you have to model the right behaviours. Staff will look to their leaders for behavioural cues – lead it!


One of the biggest challenges for leaders is how to embed innovation and create new value for employees, customers and shareholders. Innovation is not just about science, engineering, mathematics, it is a way of thinking and acting. I believe all of us can be innovators, and creativity is an inherent human trait. The problem is that we stamp it out, particularly in large organisations where we are often value compliance over creativity. The question for leaders is how do we create an environment that allows people to innovate within certain structures? Part of the answer is the need for innovation to be encouraged and applauded. That explains so much of the world; the places that celebrate innovation are famous for it.

Embedding innovation starts with culture; you need an insatiable appetite to learn, to put yourself at risk, to be curious. Using Telstra as an example, we do lots of little things. We run hack-a-thons, technology leadership days, reverse mentoring, running an Innovation Hub. But we also do lots of big things. We run a start-up incubator, have a ventures team, a technology and innovation office, a software company in Silicon Valley. The result has been a whole suite of new customer products and services. The learning for us was the need to disrupt ourselves from within by enabling the creative talent of our people. We have much more to do but we have started the journey.


The world is changing quickly and the era of the all-knowing CEO or leader has gone. But while the world has changed the theories of management and leadership have not. The future is not just about charismatic leaders and rock-star CEO’s – it is about authentic leadership and transparent management. The shift is already happening in many great companies; from hierarchical to thought based leadership; from rules based companies to values based companies; from compliance to trust and enablement. This is a fundamental change in the way we lead. A new leadership paradigm is essential if we are to lead in this connected world.

The world is changing quickly and leadership has to change too. The old truism that we can’t presume what we did in the past will work in the future has never been more appropriate. That’s what makes leadership so challenging, and so rewarding. I hope these thoughts will help you all on your own leadership journey.

Carolyn Taylor

Culture Transformation Consultant, Author, Keynote…I note that the word ‘I’ does not appear in your blog and that is typical of the humility and team-orientation that has been a hallmark of your leadership. You have lead such a change in culture and as customers we all benefit from that. Wishing Andy every success at taking Telstra the next step.

Emily Kayondo

Head Post Operations Auditor at SPEDAG INTERFREIGHT…I applaud you for the information; fortunately got the chance to read your last blog (I had never read those before). Transparency is key to all stakeholders in the set-up even besides the workplace. It helps to build trust and let everyone know the direction we are heading to.

wisdom mupudzi

Owner, WISDOM UNLIMITED INTERNATIONAL…I so agree, I suppose this is what makes the Six Sigma Culture based organisation thrive. Innovation and reinvention as well as Continuous improvement will always trump traditional dogma and “we have always done it this way”. Yes, this is the era of the customer, as customers are more discerning and constantly evolving in their needs and wants, then organisations that refuse to adapt to this ever changing

Amy Gurski – VP at Inceptio Software, Inc….It has been my experience that culture is a manifestation of leadership’s characteristics and attributes. A leader’s beliefs, principles and standards will set the tone of a group or organization. Many leaders want cultural changes to come from the bottom – but it must come from the top. Unfortunately, the organizations that need that transformation the most are the ones that are the most resistant to the idea because it requires a personal sacrifice and I am not surprised this was a 5 year journey that needed everyone to put the customer at the centre of their work.

Wesley Allen

Software General Manager at IBM Digital…Powerful ideas from David in this Blog. Notion that Strategy is not valuable if isolated and Employee Engagement and Culture are pre-requisites for Strategy to be effective. Need to use Authentic Leadership as this is a proven driver of Employee Engagement. During my short time at Telstra, I struggled with the culture David worked to change. ció d’Entitats…

The key of culture: change is present in each second of our lives. First question: we are ready to change? 

First step: think about it and believe it! Go on do it

Barbara PriceGeneral Manager at Norwest Recruitment….A wonderful rallying call for the long term view and the need to stay centred on the Customer. inspiring & true.

Waudi TahcheGeneral Manager – People & Culture…. Great insight into the transformation of an Australian icon. Like a great recipe for a great tasting dish, any services organisation needs these core elements humming together – Culture, Innovation, Customer centricity, and Leadership. Congratulations David.

Dr. Julie GurnerBusiness Consulting ….The is fantastic. As someone who creates cultures for companies, this is a necessary read…not all companies are startups, but all companies should be thinking like them – focusing on strategy, growth, and the culture that maintains a lead position in the market… Great read

Simon GreenStrategic Planning Director for premium brands.…Thanks David, what a fantastic top 5 leadership lessons learned for Telstra. Many UK/global telcos (Voda, BT, EE) and other service industries could apply more of this thinking. I love that your first two points major on customer experience – redefining what to do for customers in order to drive their retention and future value.

Sian MerrickI help people to be the best they can be.…Culture is the glue that binds everything together. A culture which everyone feels part of. If you’ve got highly capable people doing the right things then when you create the right conditions that allow them to flourish, you’ve got yourself something very special.

Richard WOLFF

Social Business Consultant at Richard Wolff Pty Ltd…David Thodey final Linkedin Influencer blog is a must read ! David covers the 5 key issues of Customer Service, Reinvention, Culture, Innovation & Leadership.

Paul Cutbush

Director – Contract Management Centre Of Excellence- QLD…all recruitment outsourced…mmm that is innovative….call centres outcourced to the Phillpines…mmm that is innovative….David please let us all know what has changed at Telstra….is it cost to connect….is it internet speed….is it connecivity? Otherwise everything you state is just about the warme fuzzy feeling of your pay cheque and the phychophants hwo say Hail David! 

The problem with you comments about the new leader is that it is obvious that the old rotten heart of Telstra/Telecom is still beating and they were willing to entertain you for a certain time Nothing has changed and Telstra remains the old mammoth that roams the Australian landscape looking for relevancy ..if that is a word The curse of Sol continues in your legacy….lots of noise but no result
Sebastian Jonson – Easy to understand, harder to implement. We need to focus on leadership, customer focus and culture to stay competitive, which is hard in companies that focuses only on costs…

Deon Newbronner…”Innovation is not just about science, engineering, mathematics, it is a way of thinking and acting.” Is the core me. We are constantly change and adding new products/services to existing customers as well as creating opportunities to meet the needs of new customers. The later is always changing. Brilliant article. Thank you!

Alt Moreno…

New Paradigms + People Involvement = Key for Success

Kevin Goodchild…A great powerful piece David! Thank you for sharing. I couldn’t agree more about the importance of service excellence in day-to-day operations and how the whole company must be committed!

Asim Ahmed..Thank you for a fantatic post David Thodey. Innovation, Trust each other to deliver, Transparent Management, Cultural Change, Customer Focus – all so relevant and true. Thanks for leading by example !!

Joe Albarno
Lots of great points – all worth consideration by anyone running or operating in an organization of any size. It’s important to recognize that cultural is changed by the people within it. I believe you pointed this out, but it’s worth repeating in different words. Leadership can create the conditions for culture to change, but ultimately it’s workers, customers, suppliers, and everyone else working within the culture that make the shift. I’ve seen this shift in perspective change the actions and results for many leaders and leadership teams. I’d also like to reinforce your last point about a new leadership paradigm. The “classic” or “traditional” employer / employee relationship is a thing of the past for most employees. We no longer work in a world of careers dominated by a singe employer who provides heath, retirement, and other benefits. This is not to say that such relationships do not exist or—for some at least—are not desirable. It is a statement about the world as it seems to be. The point is that entrepreneurialism is emerging as a hallmark of successful careers. Your post makes a strong case for entrepreneurialism, both at the corporate and career levels. Entrepreneurs recognize that success is driven by their ability to create and receive value in a shifting marketplace through customer service and innovation. They recognize that the world is flux, so reinvention is a part of business life. And they recognize that leadership is not a position, it is a responsibility. Thank you for your thoughts. I hope it inspires the level of thinking in others that clearly went into creating it.

Ross Holman

CEO (Founder) at Palomino Consulting Group LLC…Kudos on an awesome post about change, values and leadership. The ‘One’ thing that you mentioned twice in your post that makes all five of your points manageable and possible is having an organization/culture based on Trust. With high trust all ‘change’ is achievable and can be done at a faster pace.

Barry Vogel

Managing Director, FIU Global First Year at Shorelight…

As always, great insights. The old cliche that the only thing that is constant is change has never been more true. Your point (#3) about culture beats strategy everytime is so telling. Yes, an organization (or an individual) absolutely needs strategies to accomplish goals and objectives but those strategies need to be in congruence with the individual’s or organization’s culture. All too often we see organizations attempt to accomplish their goals by employing strategies that are not aligned with the organizational culture and the strategies either fail, or the team and/or its customers rebel against the strategy. Culture can change in an organization but the culture generally reflects the values. When culture and values are not in alignment you may as well pull in the oars because the team is not row

Jim Robertson… A terrific message of energy, inspiration and openness – and of the importance of making changes at individual and organisational levels before the changes get made for you.

Grant Hyman

CEO – – Sales Coaching,…Legitimate Accountability at all levels, is, in my opinion the difference between tomorrow’s Top 500 and Today’s Top 500. When everybody in the organisation is paid 50% of their package for turning up and 50% for performing, consumers will be heard.

Graeme Gilovitz…

Not only is our biggest challenge technological advancements but change in mindsets – whether it be customer service, leadership or generally work/life balance.

Brook Thomas

Chief Technology Officer at Australian Associated Press

Bang on! Read and read again. And read again.

Roger Wissell

Group Procurement Manager at A.G. Coombs…David did some great work during his time at Telstra, but I am yet to be convinced his drive to change the core culture towards customer service fully embedded itself within the company. I can still go to an emerging economy country, land on Thursday, request ADSL2 connection on Friday and have it connected Saturday. Hopefully over time Telstra will become a world class business that others envy.


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