As David Thodey prepares to leave Telstra after five years at the helm, AHRI chairman Peter Wilson talks to the CEO and Tracey Gavegan, group executive, human resources, about their management philosophy, their working relationship and the principal challenges they have faced along the way.

Peter Wilson: Telstra today is valued at more than $80 billion, with nearly 35,000 full-time staff across 20 countries. What have been the biggest challenges with respect to people that you focus on?

David Thodey: The most important challenge in the last five years is how we build a service culture. How we build differentiation in front of our customers. Unless you’ve got people who feel enthusiastic and excited about what they do, and are also advocates for your company, it’s hard for them to really serve your customer.

We’ve tried to change the way we interact with customers, at the same time really helping the culture to allow people to do that and not feel constrained. Obviously, we’ve got to get the strategy right, the values and purpose right, the cultural and people element all working together in alignment – that’s when you get a great company that’s going places.

Tracey Gavegan: If you look at our front line staff, we’ve done a thousand behavioural observations and seen what it is that delivers good customer service. It’s commitment to a cause and passion to deliver that makes staff go above and beyond, work around the systems and improve the processes.

PW:  Where have been the biggest innovations in Telstra’s transformation?

TG: I’d like to say culture, but culture is never ending. I’m specifically talking about the work we’ve done in orientating the organisation around the customer. Getting the customer at the centre of everyone’s agenda and thinking more broadly than, ‘What is my contribution?’

That and the values work we have done to really understand what Telstra is. We did a lot of deep work with senior leadership. Then there was redefining our purpose, saying, ‘Okay, where’s the gap? What are the things we want to keep, what are the things we want to do differently? How do we turn that into language that’s applicable within the business?’ It is about serving the customer, being more innovative, collaborating and being leaders in the market.

PW: Where do the values of the company come from?

DT: We didn’t just want the same old values – service, trust, respect, integrity – we wanted to make it real. One of the values that we espouse for example is: ‘Trust each other to deliver’ which is exactly the opposite of being accountable, but accountability is what comes out of it.  But people interpret values in different ways. We’re trying to draw out what they really mean. What do we expect people to be and how are we going to behave with each other?

TG: You can easily build awareness of values but what you need to change is behaviour. One of our values is making the complex simple, for instance. That’s easy to say but applying it on a day-to-day basis is extremely hard.

PW: You describe Telstra as a network rather than a bureaucratic structure. How does communication flow-through the organisation?

DT: We’ve done a lot of work in this area. We do the normal cascade of messages, but also early on implemented an internal social media capability called Yammer, which I’m on every day. That’s the way that I really get the truth.

Now when we put products to market our employees are the first to criticize them and say, ‘It’s not quite right’. That’s really broken down some of those layers of management. People used to be very fearful to speak out, but that’s slowly going away. I think it’s been a tool that has allowed us to change the culture in a way that I never expected.

PW: Telstra has a good record on inclusion and diversity. How could that be improved in the next five years?

DT: The decision to make all roles flexible was a big psychological change for us. We felt it was important to say that we wanted an environment of inclusion. It’s equally advantageous for men as well as women and although it wasn’t a gender thing, we’ve had more women applying for roles and promotion.

TG: We come from a position that our business will be better with a more diverse balance in the company. That’s what drives us. Then there is the moral position – we don’t just believe in equity as a business outcome.

PW: What must Telstra be doing to make itself prepared and resilient in the 21st century?

DT: A company like Telstra needs to continue to reinvent itself, and as we become more international we can offer opportunities to our people to build those regional and global skills. The reason why many Australian companies have not succeeded in Asia, is that despite having great people, they haven’t developed the leadership capability and what it is to work in a multi-cultural, multi-national area.

TG: Organising and being ready for growth and all that that brings will help us prepare. Building up the talent orientation involves multiple jobs in multiple different areas, from technology through to back-of-house functions. Meanwhile, the global market is getting tighter, but hopefully we are better positioned in terms of attractiveness as an employer. We’ve invested a lot in making Telstra a great place to work.

There is a global mindset that Telstra will need to develop, and we’re spending more time in Asia. It’s also preparing the organisation to evolve as technology evolves, and being more agile. It’s probably not how you would have described Telstra 10, 15, 20 years ago, but that’s the sort of company it needs to be. It’s multi-dimensional for HR to assist parts of the organisation in transforming.

This article is an edited version. The full article was first published in the April 2015 issue of HRMonthly magazine as ‘Heads together’. AHRI members receive HRMonthly 11 times per year as part of membership. Find out more about AHRI membership here.