Trujillo was a monopolist who believed that Telstra’s dominance was unassailable because the federal government was then a 51% shareholder. Trujillo positioned Telstra’s products, services and prices as “premium”. When Telstra’s sales staff hit the streets with this message, they were greeted with scorn. Consumers saw Telstra’s products as on a par or inferior to rivals in the crowded telecommunications market.
Thodey’s background in IT – his job before Telstra was as CEO of IBM – meant he was more customer focused from the start, in Budde’s view. He immediately realised that Telstra was in a commoditised market. Budde says: “Thodey said, ‘We are no longer premium. We have to compete with everyone in the market and if we don’t fight for customers we will lose them’. Then he put a billion dollars on the table for a marketing campaign – Project New, it was called – to re-establish Telstra in the competition.”
Leadership polish
Under Trujillo, 10,000 employees lost their jobs, but executives, including him, received astonishing amounts. “The executives all got fantastic salaries to shut them up,” Budde says. It didn’t buy their loyalty, however.
Once Trujillo left and the dust settled, the executives rallied behind their new leader’s approach.
That is what explains the complete silence about Trujillo in the media today – it is as if he simply vanished.
Trujillo had not created a single lasting loyal lieutenant among the staff and executives he had worked with. “Everyone agreed he was a pain,” Budde says. “If David Thodey had stepped in and there had been Trujillo hawks circling, the press would have loved it. But there was no one there to agitate. And that was great for the company.”
The result
By the time Thodey was talking, he had a good story to tell.
Yesterday, the company delivered one of the few positive corporate profit results of the season. While its revenue was up by 1.1%, its net profit increased by 5.4% to $3.42 billion.
Although the company’s fixed line revenue declined by 6.1% again this year, Telstra added 1.6 million new mobile customers in the past 12 months to reach a total of 13.8 million. It has 2.6 million fixed broadband customers, 1.4 million on bundled plans and the company increased its business in Hong Kong by 475,000 to reach 3.5 million customers.
It reduced Level 1 complaints to the Telecommunications Industry Ombudsman by 26% and overall calls from consumers by 20%.
It has a billion dollars in cash in the bank, has rolled out its 4G network to 40% of Australia, and has forecast growth for the coming year.
Trujillo? Who’s Trujillo?
Kath Walters is the editor of LeadingCompany and an award-winning journalist of 15 years’ experience. Kath was previously a senior writer and editor at BRW magazine covering management, strategy, finance, entrepreneurship and venture capital across all industry sectors. In 2006, Kath won the Citibank Award for Excellence in Journalism (General Business). Follow her on Twitter.
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