Three strikes and out for NBN managers

Bill Morrow has barely got his feet under his new desk at NBN Co and the re-making of the company is already underway. With the shift to a multi-technology strategy confirmed by Malcolm Turnbull this week, he has no time to waste.

When Turnbull’s strategic review was tabled last year, it was critical of the culture and capabilities of the organisation. It was apparent that, even without the radical shift in the roll-out from a fibre-to-the-premises network to one that uses whichever technology is most effective in deploying higher-speed broadband faster and more cheaply, there would be wholesale changes to the leadership of NBN Co.

The review labelled NBN Co’s culture as "corrosive of performance" and Morrow, it would seem, has swiftly come to the same conclusion.  A week after he took up his new post as chief executive, the former Vodafone Australia CEO has forced out three of NBN Co’s most senior executives and flagged further changes to management.

Chief financial officer Robin Payne, chief technology officer Gary McLaren and head of corporate services Kevin Brown are all leaving the business. Morrow cited a lack of alignment on goals, a confusing organisational structure, inadequate decision-making, poor process management and a sub-optimal culture for the re-making of NBN Co’s superstructure.

Morrow also plans to set up a new transformation and culture unit under former Vodafone executive Brad Whitcomb to try to address some of the organisation’s shortcomings.

The strategic review detailed issues such as unrealistic assessments of performance, blind faith in the corporate plan, a lack of appropriate commercial rigour and oversight in decision-making, immature performance management metrics and the lack of a ‘’single version of the truth’’ approach to information and decision-making.

It should be said that former CEO Mike Quigley and the team he assembled to create NBN Co from scratch aren’t entirely to blame for NBN Co’s shortcomings and the blowouts in costs and time that occurred given the intensely political context in which NBN Co has operated and the extremely hands-on approach from former Minister Stephen Conroy.

Morrow needs to move swiftly and decisively to re-make his organisation and its culture and capabilities because of the massive length and complexity of his to-do list, now that the NBN has formally been directed by Turnbull to build the network in a "cost-effective way using the technology best matched to each area of Australia".

While the existing FTTP roll-out continues, along with the fixed wireless and satellite deployments for rural areas, Morrow has to re-equip the company for the new and more complex rollout that will mix fibre-to-the-node with HFC cable and any other technology it can utilise to speed up the roll-out and lower its eventual cost.

He has to renegotiate the expansive and expensive NBN Co contract with Telstra, re-do the deals with Telstra and Optus over the agreement to shut down their HFC networks for broadband, renegotiate contracts with contractors currently building the network, reschedule the roll-out to prioritise regions with inadequate access to broadband,  solve the problem of inadequate satellite and fixed wireless capacity while contributing to the reviews of the NBN that will determine the regulatory framework within which it operates.

Even with a $41 billion budget and the flexibility to decide how best to deploy a network that is way behind its original schedule and whose costs are running way ahead of where they were originally forecast -- that’s a daunting workload. It means Morrow has no time for a leisurely evaluation of his new organisation.

It would appear he came to that same conclusion even before he formally took up his new role -- he told staff he had been engaged with the government, NBN Co’s board and its senior executives for several months  -- and has re-designed his executive structure along what he describes as an "internal customer-supplier relationship model".

There will inevitably be more changes to the organisation, potentially a lot more, to follow.