The great challenge, the poison chalice, the hospital pass. Call it what you like, the new head of the NBN, Bill Morrow, has just signed up for what will be one of the toughest corporate jobs in Australia.
If the potential minefields facing this $41 billion infrastructure project are not daunting enough, one only needs to add in the complexity of the stakeholders – both sides of government, taxpayers, wholesale customers such as Telstra, and this before one even begins to deal with contractors building the network, the unions or the local councils.
And he is taking a pay cut to do it.
Having said this, Morrow is well credentialled. He has plenty of form in building telecom networks at Vodafone and Clearview. He is a seasoned troubleshooter with reasonable lashings of confidence. Plus he has a zealot-like commitment to the ideology of improving the competitive telecoms landscape, but defines himself as capable of being a technology agnostic.
Indeed, he has been one of the NBN’s greatest campaigners, which placed him in Malcolm Turnbull’s sights even before the election.
Under the direction of Turnbull and NBN chairman Ziggy Switkowski, Morrow has a remit to redesign the network’s technology parameters. Sadly, Labour’s Rolls-Royce plans for a world-leading piece of communications infrastructure need to be recast and with this comes compromise on quality.
Economics, practicality and politics have prevailed.
Make no mistake, the notion of the NBN, its structure, the timing of its build and its cost were never going to fit into a neat plan.
Infrastructure projects of this magnitude always involve cost blowouts and unexpected landmines, and these won’t disappear with the NBN management.
NBN founding chief executive Mike Quigley had the near-impossible job of devising a project within government expectations that were never realistic. He was also starting the build from scratch.
The pitfalls into which the project fell have been laid bare – and the harshness of Thursday’s report card reads like the script of a horror movie. So they are worth a recap.
The independent assessment found that certain of the factors causing the financial and operational underperformance to date (relative to Labor’s corporate plan) related to governance, planning and reporting including:
An unrealistic assessment by key stakeholders of the complexity and time required.
‘‘Blind faith’’ in achieving the corporate plan despite clear evidence to the contrary.
Significant operational decisions being made without appropriate commercial rigour and oversight.
A relentless focus on the metric of ‘‘premises passed’’ as the single most important determinant of success, rather than a balanced view including premises serviceable and premises activated.
Immature operational performance metrics to manage significant queues (including rework) in design and construction.
Lack of a ‘‘single version of the truth’’ for information and decision-making.
Morrow’s first job will be to fix the mess, recast the relationship with contractors, get costs under control. His next will be to get a workable replacement model. He also needs to get his head around dealing with Canberra.
As a seasoned executive, he has crafted the politics of dealing with boards and shareholders. But that is more clearly focused on commercial return – performance is more easily measurable.
Under the Coalition model, fibre-to-the-home gives way to a less expensive technology mix that will allow a faster rollout to a greater number of premises.
Morrow leaves Vodafone in what he says is better shape. After less than two years, the building blocks for Vodafone’s revival in Australia are in place. It is now competing more effectively on coverage and reliability. It has been immersed in a capital expenditure program and he has improved customer satisfaction and some innovations.
But the proof will be in how much profitable market share Vodafone has snaffled. There is no evidence Telstra is facing customer drain. But Morrow says there are early signs of customers coming back.
He says the fruits of the turnaround strategy will be evident in Vodafone’s next set of results. Chances are his replacement will hail from the international Vodafone ranks and will step in by March 2014.
Morrow has a sufficiently herculean job inside NBN that he might be anxious to get his feet under the desk.