On Optus: In a crisis, focus on fixing the right problem

Paul McKeon

At this time of the year, many leaders will have one eye on a strong finish and the other on the opportunity for a reset January brings. ‘Tis the season to be jolly, but also for shedding any lingering corporate baggage from the last 12 months.

So, spare a thought for the as-yet-unnamed incoming chief executive at Optus in 2024. Last week the Senate Environment and Communications References Committee pushed back the deadline for its report on the company’s November 8 outage until the end of February.

That’s more bad news for an organisation, which would no doubt like to put the past in the past and be beginning the long and expensive work of rebuilding its reputation after experiencing two major crises in 14 months and becoming a case study in what not to do.

The Senate inquiry, which was to have reported by December 9, has so far received more than 30 submissions and 900 emails. It’s a reasonable assumption its report is unlikely to be glowing and will mean any honeymoon period for a new leader at Optus will be short.

Few will ever experience a major public crisis of the level former Optus CEO Kelly Bayer Rosmarin did, much less a Senate committee excoriation.

But what lessons can leaders learn from Optus’ decisions on November 8 to help avoid a visit from the Ghost of Outages Past?

In her remarks to the Senate committee a month ago, Ms Bayer Rosmarin, was clear about where her priorities were on that morning.

Asked why she had not sought to communicate earlier with the company’s 10 million impacted customers, general public and others, Ms Bayer Rosmarin said: “…the public would expect that my focus would be on working with the teams to resolve the issue.”

On the surface that sounds reasonable enough, but it was wrong. The answer speaks to why the telco got the handling of a crisis, for which it should arguably have been more prepared than any other large Australian organisation, so badly wrong.

In the weeks since, to paraphrase a former Prime Minister, it seems like every parrot in the pet-shop is a crisis management expert. The first rule, we repeatedly hear, is that problems happen, and it is how you manage them that matters most.

That is certainly true. The second lesson we should all take from Ms Bayer Rosmarin’s unfortunate experience is that, in times of crisis, the focus of an organisation, and especially its CEO, should be external, not internal.

By the time the Optus CEO arrived in the office around 7.30am that day, the company’s crisis was already three hours old.

Its managing director of networks, Lambo Kanagaratnam, told the Senate committee that troubleshooting had begun shortly after 4.00am.

Optus has around 7,000 employees. As well as Mr Kanagaratnam, its leadership team includes a CTO and CIO.

In that context, it’s difficult to see how the efforts of any CEO could contribute materially to fixing a technical problem.

But it’s easy to see why a leader might feel pulled in that direction.

Around this time four years ago, Scott Morrison found himself in trouble over his “I don’t hold a hose” comment, which was seen as an attempt to shirk responsibility for the Federal Government’s ‘too little, too late’ handling of the 2019/20 bushfires.

No-one would reasonably have expected Optus’ CEO to be in a datacentre holding a screwdriver that day. The logical interpretation of her response to the Senate is that she prioritised leading her team’s efforts to find the root cause and get services restored.

This was the key mistake Optus’ leadership made in the heat of the moment on November 8.

The bigger, more urgent and longer lasting problem was not the technical one inside but the growing crisis of confidence outside—of which the Senate inquiry is one example.

It’s easy to imagine the frantic activity which must have been happening within Optus’ Macquarie Park HQ that morning.

What the company apparently failed to fully appreciate was that similar crises were playing out in the lives of its customers, and their customers too.

As people on the east coast woke, the outage was the main story on radio, TV and on-line. With its own networks down, Optus had limited ability to contact its customers. In that context, speaking to them via the media could have been a lifeline.

Whether or not the CEO personally should have fronted the media, or another Optus executive, is open to debate.

There’s an argument the magnitude of the crisis demanded a CEO-level response. Clearly someone would have been better than no-one.

Instead, Optus’ approach effectively abandoned its customers to their own devices to manage the flow-on effects of the outage and undermined years of marketing efforts to position itself as a customer-focused alternative to Telstra.

The common theme of the morning was that media were yet to hear from the company. It was left to Communications minister Michelle Rowland to fill the leadership vacuum.

Optus did not take advantage of its opportunity until around 11am; seven hours into the crisis.

To borrow a line from James Carville, “it’s the customers, stupid”. In a crisis, the #1 priority for leadership teams should be customers.

That doesn’t mean simply speaking platitudes about being ‘customer focussed’ it means taking action to minimise the net impact.

The job of any CEO in this context is not to focus on what has already happened, but to think more broadly about future consequences and leverage the full resources of the organisation to reduce their impact on its most valuable asset: customer trust.

It’s impossible to say today whether a more front foot response would have reduced the need for a leadership change at Optus, especially given the magnitude of the incident, but it could have helped to reduce the longer-term damage to the company’s reputation.

As the saying goes, trust rides in on a turtle and out on a thoroughbred. Optus customers are now twice bitten and likely thrice shy about an organisation that, through its inaction, appears to value their money more than its service obligations to them.

A critical Senate report early in the New Year is a hurdle any new CEO could do without.

Paul McKeon is a communications professional with 30+ years’ experience across agencies and corporates primarily in the technology sector.

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