What are the take outs re risk management from an interview with David Thodey, CEO of Telstra? Two of his greatest challenges are: 1. Knowing what he needs to know is happening at Telstra and 2. Getting staff comfortable with risk taking. I attended a UNSW Australian School of Business “Meet the CEO” evening last week to hear from David Thodey, Telstra CEO.
I arrived hoping to gain more insight into the issues (hence risks) of running a very large technology company, that the government is planning to break in two, and how they relate to the issues I discuss with CEOs and CFOs of other companies. I was pleasantly surprised that two of my favourite issues were raised by David. The other nice surprise was to find out that David was an avid follower of, and sometimes contributor to, a Telstra technology blog - a great way to listen to customers. I checked it out and it certainly has some vocal bloggers.
Issue One – Knowing What he Needs to Know
After discussing a range of issues including the periodic bad press about customer service, David made the comment that one of his most difficult challenges is ensuring the right issues from the “shop floor” make it to where they need to be for appropriate management attention. In our language he is talking about risk reporting.
This is one of my biggest selling points when I discuss the benefits of risk management with senior executives. At the end of the day, people throughout the organisation need to identify a risk and have the knowledge to assess if it is important enough to report it up the chain.
Issue Two – Risk is Necessary
David discussed many issues facing Telstra, however, he went out of his way to say that many issues arise because of taking on risk and that taking risk was not only necessary, it is a good thing.
In my experience almost all senior executives understand that risk is necessary. Again, I try to work with executives to help them to communicate the right message to staff so staff are taking the risks the executive want them to take and not unpalatable ones.