Almost 20 years ago, I had the unique opportunity to join One.Tel, Australia's "challenger" telco, launched during telecoms deregulation. One.Tel had three core product offerings: fixed wire long distance, Internet service and mobile telephony. It was backed in its start up phases by Optus, FAI, Coldstream Capital and the Murdoch and Packer families. It exploded in growth after being listed on the ASX - and later imploded.
For a 20-year-old Executive, joining the company was a rare and unique opportunity to leverage my leadership foundations from the Australian military and lead a front line operation through a period of rapid scale and IPO. During my tenure, I was given the opportunities to make a contribution to One.Tel's go to market strategies and their execution, to support in its capital raising and to build a team that consistently delivered peak performance. I was also provided with an opportunity to learn early in life, with thanks to my mentor, the rules of principles versus laws.
When One.Tel floated on the Australian Stock Exchange at $2 per share in November 1997, its initial market capitalization was $208 million. On paper, FAI had turned a $950,000 investment into $51 million; Packer had turned $250,000 into $17 million and Jodee and Brad had a combined stake worth well over $100 million. Every one of us that had worked the hard yards had reaped the rewards. By the end of that year (December 1997), One.Tel was a major Telco with over 200 000 customers and 400 dealers across Australia.
In August 1998, I made the decision to resign, knowing that I would forfeit all of my now valuable stock in the company and the incredible career opportunity that I had been given - the shared leadership of a front line operation of 150 personnel.
You see I had started my career with a desire to be a Doctor working in the third world. I joined the Military and ended up not walking for a time after an accident on exercise. So while my career had taken a massive curve ball post-Army, my fundamental purpose to "positively impact lives and make a difference" had not.
With the support of my Career Coach "Morgan & Banks" at the time, I had a new mission - to take a step back from the "rollercoaster" that I had been on and "learn sound management practices", to be exposed to a corporate culture that "always operated by the rules of the state" - even if we were a disruptor - and to be exposed to decision making that always considered "principles not only rules".
I joined a new start-up disruptor in the digital insurance industry -DirecDial - the first e-commerce play for Allianz and downsized to lead a team of 10. I later relocated to my hometown to join Telstra - a company that is renown for its leadership, corporate governance, and technology.
Only 2 years later, in May 2001, One.Tel reached infamy when in the space of 2 weeks, the Founders were forced to resign, while having just been awarded multimillion bonuses. At the time, the company had no debt and $100M/ permonth cash flows. Instead of helping to support the rights issue, Rodney Adler, a Non-Executive Director who had been progressively selling his stock since February, sold his last 6m shares for $1.2 m, pushing the company into receivership.
An interesting and sad fact - the total legal and professional fees paid in the liquidation were $150+m. The canceled rights issues - only $132m - would have been more than enough for the company to stay solvent at the time.
If we had Chapter 11 laws in Australia to protect directors (which are now coming 15 years later), the company would be here today.
One.Tel's collapse in 2001 has been hailed by academics and pundits alike as a classic case of failed expectations, strategic mistakes, wrong pricing policy and unbridled growth. But I will say 6 things about my journey:
1. Customer Centricity was its heart - it was a company that understood that its value was in enabling the "customer experience". One.Tel's products challenged the incumbents and, for a time, it completely disrupted the monopolists with its breakthrough brand and identity - the Dude - a "fresh, young spirit" in communications with "youth prices".
2. Culture matters - the Company cared about its people. Flat structured, everyone's voice mattered, and we all invested heavily in creating an environment that fostered challenging the status quo and employee engagement. While massage days, paddle pop days, a work environment powered by feng shui, real light and fresh fruit and nuts for all staff made the long hours bearable - mostly, it was our care for "each other" and "our customers" that made the difference.
3. Hire people whose purpose is to "make a difference" - My team was diverse in every way you can imagine - gender, religion, age, race, skills, and mindset. But the common glue that bound us together was "care for our customers" and together, we worked hard to "make a difference". People were typically only paid to work their 8-hour shift, but most people did 10. It was their pride in their work and their promise to their customer and each other, that inspired them to come in early and leave late.
4. Operate by Principles not just Laws - I still remember every word of Clause 4 in our Subscriber contract "One.Tel can vary charges at any time without prior notice to the subscriber". While it may be legal, it certainly was not "acceptable" nor "ethical" - and the company frequently chose to use it. The Public were also outraged by its Founders having paid themselves bonuses. In the context of its subsequent failure and the public losing their funds, this was "not acceptable or defensible".
5. Governance is a license to operate - While there were many weaknesses highlighted in One.Tel's corporate governance throughout its tenure, hindsight would suggest that if our Non-Executive Directors had been recruited for their "diversity" and "independence", any governance weaknesses may have been addressed early. It was reported that the Board lacked diversity in skill set and that almost all of the One.Tel non-executive directors had substantial investments in the company.
6. Build for resilience and grit - it's great to have one system for a holistic 360-degree view of the customers, dealers, and operations, but it's only great if it's functional and working. Every time the system went down, our 24-hour sales and service operations would suddenly have no visibility of its customers or its operations, often for hours at a time. Just imagine - in a call center talking to 15,000 customers a day! It takes resilience and grit to get through an entire shift with intermittent system access and screaming customers.
There are many things that are said about One.Tel and what contributed to its demise. Many of which are not true or were said by Executives in an effort to protect their own personal reputations post-crash.
Every startup has its weaknesses. Yes, when you are working on "leading edge" quite often there is "bleeding" edge, and when you are pushing for tech innovation or disruption, regulations are often not yet there to lay things out in black and white - there is a lot of gray. My own resignation letter and forfeiture of stock all the way back in August 1998 tells its own story. However, the lessons learned have been central to my own career journey and to recognizing my own purpose.
1. "Make the difference" - My Dad always said, "Find a job you love and you will never work a day in your life". Every venture I'm involved in today serves a common purpose - to "make a difference". I find when this is aligned, I am energized and fueled by both passion and purpose.
2. Diversity and inclusion matters - Always find the opportunity to listen and to value each and every person's voice - and to be inclusive, always. The most important voice in the room is almost always, not one's own.
3. Inspire and support the potential in others - One.Tel's Directors taught me to always take the time to recognize, inspire and support the potential of others.
Talent, that is driven by purpose, powers performance.
I will always be grateful for the faith that One.Tel's leaders placed in me to drive their critical front line operations, to support in the raising of capital and to manage our call center operation during a time of explosive growth and through an IPO. They recognized my potential early and gave me every opportunity to sink or swim, to demonstrate grit and resilience, and to benefit from lessons learned.
It was one heck of a ride and it gave me the opportunity to build relationships with my colleagues that have lasted a lifetime.
But most of all, I will always be grateful for the opportunity to have shared their journey as entrepreneurs. The Directors reinforced that when you fail, and you will, you just have to brush yourself off, take the accountability, humility and the lessons learned, and throw yourself at the challenge again.
One.Tel may have had its weaknesses as a start up - what startup doesn't?? But, it really had a strong heart, great people who really cared, and visionary, entrepreneurial leadership.
I also chose to take the road less traveled, and I believe it is many of these lessons, that have made all the difference.
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About Leesa Soulodre:
Chief Reputation Risk Officer and Managing Partner of RL Expert Group, an international reputation and risk management strategy advisory firm. An Expert Advisor to the European Commission on iCT Disruption, Innovation advisor to the University of Illinois and A*Star Advanced Digital Science Centre of Singapore and Board Advisor to Belgian PR Software firm, Prezly and US Sports Analytics firm, Autoscout.
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