Did BT's CEO have the heart for the job? (And does yours?)
So BT's CEO, Gavin Patterson, is to step down. The board liked the strategy but wanted someone else to front it. I met Gavin a few times when our time briefly overlapped at BT.
He's a very canny operator, extremely good at managing the politics of a big organisation. John Petter was his right-hand man for many years, joining BT with Gavin from cable operator Telewest. John also left last year, rather to everyone I know at BT's surprise.
John was / is extremely good at the detail and something of a workaholic. I worked for him for a few months and enjoyed it - partly because I was on my way to leaving BT, so I could say 'please don't ask me to come to your daily 7am meetings because I won't come'. He had the grace to laugh, and always dealt fairly with me. I respected his ability and intelligence and marvelled at his appetite for the detail of absolutely everything that was happening.
I always felt they worked as a team: Gavin managed up and out, John managed in and down. Perhaps in retrospect John's departure should have made me wonder about Gavin's tenure, but to be truthful I thought him so capable of managing the politics it didn't really cross my mind.
I'm not sure I agree with the argument made by the analyst in the BBC article that the sports rights were Gavin's Achilles heel. It should be remembered that the value the sports strategy drove allowed BT to do the @EE deal, and the group would be in a very different situation without the sports and mobile offering. Perhaps the analyst wanted an 'I told you so' moment (we do crave those from time-to-time, tbh).
BT has a long-term pension problem to deal with which Gavin inherited. I, for one, sincerely hope they don't mess that up. But it wasn't his fault.
It also has a deeply embarassing mess in Italy. Was that really Gavin's fault? It was discovered on his watch, but the auditors must feel a lot of heat for that one.
Recently. my former BT colleagues told me that they'd learned that there's likely to be close to a 50% cut of management jobs at BT (13,000 jobs to go vs 26,000 managers). None of us expected Gavin to be one of the first to go.
So how will Gavin be remembered, then? This is an interesting question, as CEOs tend to be judged most of the time externally on their near-term financial results. Internally, it's whether they are fair and take a company forward. Then, typically only when they leave, people start thinking about their legacy - how did they leave the company compared to when they found it?
The shareprice isn't great, that's for sure. BT has been cooking the sausage of profits by cost-cutting, adding the sizzle of sports to cover the gaps in service.
But cost-cutting is not a long-term strategy, and while sport and mobile have made BT a little more relevant (though the EE brand has been retained, so BT's brand hasn't necessarily benefited from the latter), it hasn't been enough to convince the city, especially on top of the high-profile falls from grace.
So ultimately, perhaps a lack of further innovation and investment in the BT brand has cost him, and BT, more than the problems which weren't really of his making. What does BT mean to anyone, these days - what is it doing for its customers and markets? Where is its heart?
As for how Gavin will be remembered at BT, I can't say. I found him very smart and able to turn on the charm in an instant, but somewhat cold in person and his media appearances. Rather like BT's brand has become under his guidance: not much heart.
Who's to follow? Marc Allera, former CEO of EE must be in with a shout. He pipped John Petter to the Consumer CEO role at BT, and seems to have some chutzpah. But will BT's shareholders want someone external and more conservative? We shall see.
As for other telcos, maybe this is an important lesson. You have to lead with your heart as well as your head. What do you mean to your customers and your people? What are you going to do for them in the future? Do you care, CxOs? Because you should.
Update: What should BT's next CEO do?
Following the many interesting and informed comments on the original article, here are my thoughts on what the next boss should do, and why.
- Recognise that the company has become too caught up with internal re-organisations and job cuts. These are necessary, unfortunately, but employees lack of connection with 'why', and what the business is really about, is distracting and demotivating, and ultimately damaging to performance.
- Restate/clarify a motivating vision for the company, and communicate and execute on it. I would make it about the role BT should be playing in making the UK a leading connected economy: building new skills, and helping to advance education, healthcare and business, as well as sport and mobile.
- Take a leaf out of AT&T's book and give your employees a clear way forward: re-skilling for a software oriented future or recognise the limitations and sell-by-date of your employability. Openess, clarity and fairness work for engagement and motivation.
- Take a leaf out of TELUS's book, and link everyone's pay to NPS or likelihood to recommend (LTR). This also works to improve customer focus.
- Re-energise your relationship with Ofcom, the government, and your competitors. Government can and should help to improve the UK, and if private investment is the only route then those investors will need more encouragement. Better partnerships will be necessary to connect everyone in the country.
- As hard as it may seem, you need to innovate.