FRIDAY WAS DAY ONE of what looks to be a lengthy upgrade for the company founded by legendary entrepreneur Ted Rogers.
New CEO Guy Laurence is the first outside boss to come in as CEO of Rogers Communications Inc. He is someone who never knew Ted before his death in late 2008, never worked for the man whose name is on so many buildings and brands and still casts a long shadow within RCI. The former Vodafone executive is a CEO with an international resume who will bring new, fresh ideas to Rogers, a company many acknowledge is in need of a bit of an overhaul, especially on the customer service front.
As we and many others have reported prior, Laurence spent the winter getting to know the company and the country and building a plan of action. Then on Friday, after much anticipation, he spent more than five hours with 200 of his senior leaders outlining his vision for the future of Rogers. It’s a three-year plan which he says has been informed greatly by his months of travels – but also from his experiences with Vodafone, MGM Studios and others.
Laurence speaks amiably and enthusiastically but also quickly and in a fashion where, despite his wit and genial nature, you know he means business, that RCI is in for a few years of changes – and the process won’t be easy.
So far, the new CEO has been hitting all the right notes. He’s charismatic and quick to joke and often gives the founder his well-earned due when speaking of Ted and the company he built. However, he has not shied away from also saying that it’s time to hit the gas pedal on readying the company for the future – and organizing it less around technological advances and prowess and more around serving its customers.
It started with the new corporate structure revealed early Friday in a release dubbed Rogers 3.0 which showed the company will focus on seven key items (see photo) . However, the key feature is that from now on, all customer experience functions, including customer care call centres, field operations, go-to-market and online channels, will be brought together into one team reporting to Laurence. That’s 10,400 people completely focused on the customer experience, where “the only thing that this team will do when they wake up in the morning is figure out how we make it better,” Laurence told the assembled media Friday afternoon in Toronto.
Those Rogers employees will have no responsibilities beyond fixing Rogers’ customer service issues, so “there’s no trade-off here between x and y, there’s only a trade-off between the service I want to provide and the service we do provide,” he explained. Taking that chunk of people out of a commercial business unit, said Laurence, means they only think of customers and not “other things like revenue, margin, return on capital, etc., etc.”
Laurence met with the media in a round table format on Friday afternoon for more than an hour. Here’s what he had to say on a wide range of topics.
The plan isn’t just his plan
Laurence met with the likes of the Prime Minister and major customers such as Bombardier, as well as individual consumers, shareholders and staff. He said he has 5,000 pages of e-mails from staff who sent their ideas to him. “So, the plan I’m unveiling today in some respects is not my plan. It’s actually a plan that’s been created by the customers, shareholders and employees of Rogers.”
There is much work to do, but much talent already there
“We’re like an orchestra. We have a great horn section, we have a great wind section, we’re really good at percussion, but we don’t know how to play as an orchestra… While we can create great music, it’s only when you can put those teams together that you actually create a symphony – and that’s what I want to create in this company over the next three years,” he said.
He really got an earful about customer service problems during his tour
“We have neglected our customers over recent years… In some respects, this is not a surprise. This is a pioneering company, a company that believes in innovation and when you look at pioneers from all walks of life, the one characteristic that they have is they tend to neglect their home.”
Despite his international resume, don’t expect Rogers to push beyond Canada
“We have so many opportunities… I don’t need to go beyond the Canadian borders… I believe we can return to growth. It’s not going to happen in weeks, it’s not going to happen in months, it’s going to take a number of quarters.”
As for growth through acquisitions, “I am not an acquisition junkie,” said Laurence. But, “if something came up that fit in with this plan, sure.”
Growth will come from the Enterprise sector
“We have huge opportunities in the business segment. I believe that Canadian businesses are currently underserved by all the operators. So, we are underrepresented in share, but in general, there are a number of services I believe can be offered in order to increase productivity in Canadian companies… We believe we can serve Canadian businesses better than anyone does it currently”
Rogers will spend more on its own people
“We have not invested sufficiently in the tools that we have given them,” said Laurence. “We have not given them sufficient training. Currently our training budget is 40% of what you’d expect from a company our size. Therefore, we will reinvest in our people both in the way we train them, in systems and IT that we provide them, so they can support all the other parts of this plan.”
Content, well, is king
“My god, we have good content… I believe content is the most important part of our mix.” The company will use the content it has “to help us win the hearts and minds of our customers and to stand out from the rest.”
A Rogers will not be in the day-to-day operations
Laurence noted that both Edward Rogers and Melinda Rogers, Ted’s son and daughter who have been most involved in the business with various operational roles throughout the years, will no longer have those positions and will instead focus on the long term goals of the company via their seats on the board of directors and through the family trust which owns control of the company. “They will focus on the long-term. My job is to deliver this plan,” said the CEO.
Change is going to take some time, so patience is key
“This will take us two to three years. It’s not going to happen overnight, but we will deliver on it… It tak
es two to three years to get it to a really good condition. That’s what happened at my last company.”
Great customer experiences aren’t all about the call centres
“Focusing on call centres is the wrong way to look at it. It actually starts with your commercial policies and your processes. In a company this size, we have about 17,000 processes to run the business, and they have been built up over 30-odd years. It’s a bit like spaghetti… it makes sense at the time, but when it goes cold, it’s very difficult to unpick.”
So it’s time to unravel that spaghetti, break some off, throw some out and make it straight and appealing again, he says. “If your policies are unclear, or if you have too many conflicting processes… then you institutionalize a bad customer experience, which means customers call the call centres because they are a victim of that institutionalized problem in process.
“The reason we put everybody together is so we can tackle from the root cause. It’s not about extra people in call centres, it’s about unravelling the cold spaghetti that was built up during a pioneer period of 30 to 40 years as the company grew.”
Rogers will be agile
“The needs of customers are evolving. In the old days, if they had a query about their bill, they’d send in a letter, wait a week and get a reply. Ten years ago, that was totally acceptable,” he recalls. “The needs of the customer now are that they want to interact with the company, they don’t want to wait in the queue for 45 minutes and they want instant answers – so the customer is on the move in terms of their expectations.
“To satisfy the needs of the customer, you need to be agile, you need to be able to flex because you don’t know where your customer is going to go next – and therefore, you need to be organized in such a way that people have clear accountabilities, clear empowerment to actually deal with customer needs – and in such a way so that when the customer morphs, you can morph.”
But is he going to tear out all the offices as he did with Vodafone?
“One element of that is the workplace environment. But, to be clear, it’s not the most important thing. The most important thing is clear accountabilities and empowerment. I’d put the workplace environment probably third on that list. And one of the ways you change the workplace environment is to change the physical environment.”
He used an example of taking a kid on a walk in a park on a sunny Saturday in Rosedale saying, “That physical environment creates the way that you behave.” But, take the same kid on a walk in a bad part of town after dark on a Friday night with a gang on the corner, “that physical environment creates a different way that you behave.”
That said, Laurence has said repeatedly he doesn’t believe in offices and that conventional workplaces lead to conventional companies. “The workplace environment is actually critical to agility and if that means we have to knock down walls, we’ll knock down walls, but… it’s not my first priority.”
Having a conversation about megabytes is the wrong one. Few understand. It has to change
“When you sit at a bar with your friends, do you ever talk about how exciting it was to consume 10 MB of data? No. But, you do go down and say ‘my god, the Blue Jays did well last night’… People talk about content. They don’t talk about megabytes… which is not a currency the public understands. It’s all about content.
“If I parachute you into Chile tomorrow morning and you’re given a bunch of bank notes you don’t understand and you can’t tie them back to Canadian currency, then you’re immediately apprehensive because you think you might be ripped off because you don’t know really what you’re paying for and you don’t know how to apply value to money for it,” he explained. “So the problem is the systemic issue in the industry which is the currency we chose is not relevant to the public.
“We need to create plans that customers feel comfortable with and that they understand either the currency – or whatever way we describe it – so we remove that fear factor. If you remove that fear factor, it drives consumption because once you’re not scared to spend the currency in Chile, you’ll spend it in a normal way… The issue we have to tackle is an industry issue that was created by technologists using a currency the public don’t get.”
Rogers will be simplifying its product offerings and changing its marketing
“We actually have too much innovation in our company and some of it is not getting enough oxygen so we can market it effectively to our customer base.” Look at Smart Home Monitoring, he suggested. “It’s a fantastic product,” but “currently, the number of customers we have on smart home monitoring is not high enough. And it’s not high enough because we haven’t put a single-minded focus against showing people the benefits of smart home monitoring.”
“To support this plan, we need a different style of advertising… We’re going to put some things on ice. We’re going to accelerate some things. We’re going to be cleverer about how we sell certain innovations to certain segments of our customer base rather than trying to sell everything to everywhere.
“There’s no point in trying to sell (Smart Home Monitoring) to a student who doesn’t own a house.”
This new plan is not about cutting front line staff. Management, however…
“This has nothing to do with costs” but reallocating resources more efficiently, when Laurence was asked about layoffs in association with his plan. “When you create clear accountabilities, when you remove overlap and reduce bureaucracy, and you create agility, then it takes less people in management. So, there will be job losses at the management level.” But, he doesn’t know when and has no specific head count in mind.
“I think we’ll be investing in my front line – so I don’t foresee job losses there.”
The company will invest more in customer service technology
“We have enough people in our company to answer the phone. What we need to do is create customer experiences for those who are familiar and happy to use technology to get customer service and access it in a different way… Changing customer experiences so it meets the needs of different groups of customers.”
Time doesn’t exist beyond the next quarter for Bay and Wall Streets. What about net subscriber adds and ARPU?
Net adds “is a volume metric, not a value metric and you can only pay your shareholders in cash, you can’t give them customer bodies. We need to get away from these metrics of volume and look at value,” he said. “Yes, we will go through some bumps on the quarterlies… you can’t go from a volume mentality to a value based mentality without going through some bumps.
But, “you can’t put ARPU in a bank. You can’t put net adds in a bank. The only thing you can put in a bank is cash. If ARPU has to fall but I can attract more customers, keep more customers, then that’s the way we go… It’s not about ARPU. It’s about products and services customers want, at a price they believe gives them value for money and you back it up with great service. That’s what it’s about.”
The federal government wants four wireless carriers, what does the new guy think?
In Europe, a number of different countries went hard after a four carriers and now many are retrenching, such as France and Germany, because it is such a capital intensive business and very hard for four to coexist profitably, notes Laurence. “I’m not saying the government is wrong. I’m not saying they should change their policy. My personal view is it is difficult to see a scenario where a fourth carrier can be successful.
“The government should want a healthy industry, They should want an industry that provides good service. And I would like to be healthy and provide good service.”
