commentary The departure of Telstra's chief operations officer later this month has sparked speculation that the last of the original three Americans who have presided over the transformation of the group, Sol Trujillo, will be the next to return home.
Telstra CEO Sol Trujillo
(Credit: Telstra)
Well, of course, he will — by definition, if he's the last, he'll be the next! More seriously, with the controversial but engaging Phil Burgess having left last year, and now Greg Winn announcing he will go on 31 January, it is clear that Trujillo's frenetic period at the helm of Telstra is drawing to a close and he is likely to be gone — of his own volition — before the end of the year.
When Trujillo was appointed Telstra's CEO in July 2005 he signed for a three-year term. Burgess and Winn soon joined him, originally planning to stay for relatively brief stints to help get the Trujillo revolution underway. Both were pulled out of semi-retirement by Trujillo and both stayed far longer than they anticipated.
Trujillo is now on an open-ended arrangement under which he could leave with very limited notice.
While he has been coy about his plans — he has generally said he wanted to stay until the five-year transformation program was largely complete — within Telstra it has been well understood that it was unlikely he would stick around until 2010. Within the market, with most of the big milestones for the program passed, there has been an expectation that this will be his final year.
It may have been different if Telstra hadn't been shut out of the National Broadband Network (NBN) tender, although that apparently wouldn't have coloured Winn's decision. It may also have been different if the global financial crisis and sharemarket meltdown hadn't wiped out the value of his scrip-based incentives.
Trujillo is known to covet one last major CEO role. The visibility of the re-making of Telstra within the global industry — Telstra is, at an operational and commercial level one of the best-performing telcos on the globe — and, in particular, the remarkable roll-out of its Next G wireless broadband network, means Trujillo has remained a high-profile figure in the international industry.
Telstra's chairman, Donald McGauchie, isn't scheduled to retire until 2011, which means that he will carry the ultimate responsibility for choosing Trujillo's successor. It was McGauchie who oversaw the search that brought Trujillo to the group.
There will inevitably be a global search in tandem with an evaluation of the internal and domestic candidates; indeed there are suggestions that the search is already underway and may well have been for some time.
Within Telstra it has been well understood that it was unlikely he would stick around until 2010
Last time, McGauchie wanted a change agent who would shake up Telstra and drive radical changes through the business and its relationships with its regulator and the Federal Government. He definitely got what he sought.
With the bulk of the transformation program behind it, and the looming challenges more external than internal, the big focus will be on how Telstra responds to a third party winning an NBN tender that would displace Telstra's copper-based dominance of fixed line telecommunications — the attributes the next CEO will need may be different to those Trujillo brought to the company.
McGauchie would be very aware, of course, that whatever the differences between the next CEO and Trujillo, the one big thing they will need to have in common is the stomach for a stoush — the value at stake if Telstra remains frozen out of the NBN process virtually ensures an ugly and protracted confrontation with government, regulators and competitors.
Contrary to early expectations, Trujillo didn't purge Telstra's senior management and so there are a number of now very experienced executives within the senior ranks. Foxtel's Kim Williams could also be a potential candidate. Or McGauchie and his board might like to repeat what they regard as a very successful and necessary exercise and appoint another outsider.
When Trujillo does go, despite the controversies, the impact of the financial crisis on Telstra's share price and the weight of the transformation program on the group's profitability, he and the other Americans who joined him (marketing whizz Bill Stewart is still in place) will have achieved most of what they set out to do.
This article by Business Spectator's Stephen Bartholomeusz is reproduced on ZDNet.com.au courtesy of a reciprocal publishing agreement.
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Please take our useless Prime Minister with you.