Cultural change blowing in the wind at Telstra: Budde

A more co-operative, collaborative Telstra could be set to emerge with the appointment of Telstra group managing director of enterprise and government, David Thodey, as the new CEO, according to telco industry expert Paul Budde.

Strong cultural change is also on the cards with the resignation of Donald McGauchie as chairman, and appointment of Catherine Livingstone as the new Telstra chairman.

Budde said Thodey represented a very different personality from current CEO Sol Trujillo in his business-like approach to management.

“It will be a huge difference in management style,” he said. “He is from the model school of business management where you are co-operative and you look to collaborate, rather than the old school of leadership which is ‘my way or no way’.”

“It is very important that McGauchie has gotten out. It’s a clear sign that the old-school has lost all its members, and this clears the way for a totally new, engaged Telstra with the government and the rest of the industry.”

Budde said Thodey’s background outside the telecommunications industry as the former CEO of IBM Australia ANZ and his being perceived as not closely aligned with departing CEO Sol Trujillo, were vital in his selection as CEO.

“It’s clear that you can’t have anyone tainted with Sol Trujillo as he has created so much bad blood, and [selecting someone associated with Trujillo] would have made it very difficult to build the bridges again,” he said.

“A few months ago I would have argued for the selection of a Telstra outsider [as CEO], but it has become clear that Telstra is willing to change. But, given the changes Telstra has made I now feel comfortable that even a person from inside Telstra can bring the [wider] change that people want to see.”

Thodey’s selection could also have a positive effect on the way the federal government’s National Broadband Network (NBN) was rolled out, Budde said.

“It will still be tough negotiation over the next six to 12 months, but it will now be done with the understanding that that the NBN will be there and it will be a national infrastructure plan, not a national Telstra infrastructure plan,” he said.

In further management changes, Telstra has also announced that its board has appointed Telstra chief financial officer, John Stanhope, as an executive director of the board.

Additionally, current board member Peter Willcox has tendered his resignation to the board due to concern that the James Hardie judgment may cause embarrassment to Telstra. He will remain a director until the Telstra AGM in November.