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Telco Tech Talk: Three CEOs on the future of the telecom industry, moving to the cloud and transforming company cultures

· 11 min read
Tor Odland

Meet Sigve Brekke (CEO, Telenor Group), Adam Selipsky (CEO, Amazon Web Services) and Erlend Prestgard (CEO, Working Group Two). They recently sat down to discuss questions like: How do you build a strong technology culture in tandem with a customer-centric culture? How do you think long-term but execute in the short term? How can companies in legacy industries transform themselves?

CEOs in Telco Tech Talk

(This is based on a transcript from a published video conversation called "Telco Tech Talk" - hosted by the Telenor Group. The text is edited for length and clarity. Errors may have occurred)

Sigve Brekke (CEO, Telenor Group): Hello, everyone. I'm Sigve Brekke, the Group CEO of the Telenor Group. We are a mobile operator operating across the Nordics and in Asia. We have called this the Telco Tech Talk and this is a second episode where we invite guests to talk about how technology is changing the landscape and how technology companies and telecom companies are coming together and what that really means. Today, I'm very pleased to have two guests with me to discuss that topic.

Telco Tech Talk
Telco Tech Talk

It is Adam Selipsky, the CEO of Amazon Web Services, as we all know, a leading cloud services company globally. And I have Erlend Prestgard, the CEO of Working Group Two, a software and application provider.

Let's jump into it and let me start with you, Adam. It’s not a technical question but a cultural question. I know that you have been at Amazon from the early days and my first question is, what is your advice on how to combine the efforts of building a strong technology culture and also building a customer-centric culture?

Adam Selipsky (CEO, Amazon Web Services): The cultural question is central. I mean, we see this more and more as I spend time with folks like the two of you and many other CEOs and CEOs around the world. At the end of the day, cloud technology is a means to an end. Ultimately it is about transforming the organization. And that sounds like a big claim. But those are the conversations we're having more and more. What leaders are realizing is that by moving to the cloud, by undergoing a digital and a data transformation, what they can really do is to put data at the center of decision making. They can move faster. They can be more innovative. Ultimately, what that implies is a cultural transformation about how the organization operates.

Adam Selipsky, CEO, Amazon Web Services
Adam Selipsky, CEO, Amazon Web Services

Now, to make that happen and to push that in a productive direction. I think that certainly at Amazon, the most important thing is a concept we call customer obsession. We always put our understanding of the customer right at the center of our decision making. We have many mechanisms for understanding at an incredibly detailed level what customers want. And then we work backwards from that. We talk a lot about the working backwards process at Amazon, where we will write press releases and FAQs for any significant new service, any significant new feature or program before we even embark on building the program or service. We work backwards from there and decide, do we have something remarkable? Is it worth building? I think by really putting the customer perspective right at the center of the core decision making is the best way to undergo cultural transformation.

The other thing I'll just hit on quickly is this concept of having a very long-term perspective, long term view, which is something that folks in the telecom industry certainly understand. But I think at software companies and a lot of other companies, it's less common, less pervasive to think long term. Amazon has been very good at thinking five, ten, even fifteen years down the road. Amazon Web Services is a good example of that. And to understand that building for the long term, you don't just take a series of short little steps, you must have a vision for the long term and build to that part of that topic.

Sigve: As you are working with so many other companies with a legacy history, meaning having for so many years built a culture based on yesterday’s business models and not trying to transform themselves into the future: What have you seen in successful companies trying to make this change?

Adam: Well, every company is a little bit different, but we do see some very common success factors. We can see repeated behavior over and over again by companies who are quickly and successful in making the transition. I would say the first is Top-Down leadership or a leadership mandate that “we are going to reinvent our business, we are going to move to the cloud, we are going to build our customer obsession, we are going to reap not only the cost benefit but become more agile and more innovative as a company.” I think when leaders instill that, they need to eliminate what I sometimes call a “Plan B.” As long as you leave the option open for people in the company to wonder, is there a plan B? Is there another way, do they really mean it, maybe it'll change tomorrow. If you eliminate that and there's only plan A, then everybody tends to get focused in the organization. The second thing I'll say is that it's very useful to have aggressive top-down goals. You want to be deliberate, and you want to be careful. We've seen many teams succeed by saying “We're going to move applications in a month.” There was a CIO of one very large global corporation who did that. By doing that, it gets the team to think differently about what we would have to do to move quickly. The final thing I'll say is important as to who you hire and who you develop. I think it's important to recruit and train people that want to build, people that want to innovate. And then you free them. You unleash them to do that. It really starts with having the right people in the company.

Sigve: Very valuable advice. I must admit that being the CEO of a very successful company over the years, the way I look at that is that one thing is what you need to do yourself. The other main thing you can do to achieve this is to do it through partnerships. You need to change from treating partners like vendors into forming more long-term strategic partnerships. I see that a lot of the innovation is happening in partnership with companies like yourself and other technology companies. This is also a way for us to change our culture.

Erlend: I think you said one thing that I noticed, Adam, which is your incredible, long-term focus. I think we see that as a customer and an AWS user every day. It’s the idea that what we build on today is based on decisions that were made five, ten years ago. There is, I would say, a similar approach in Telenor. I think one noticeable difference between AWS and Telenor is the ability to change and move fast with a long-term mindset, the degree of control of technology and the ability to build and iterate. Short cycles within the long-term perspective. I think that one of the challenges for telecom companies is that they work on these decade-long cycles but the ability to do micro changes within that decade is something that I think the industry really needs to tackle. I think AWS plays a big role in enabling gradual micro improvements in a long-term perspective.

Erlend Prestgard, CEO, Working Group Two
Erlend Prestgard, CEO, Working Group Two

Adam: There's a cultural point and a technology point there. And on the cultural side at Amazon, we talk sometimes about being strategically patient and tactically impatient. The strategic patience is really having a long- term view of “we are going to get this right as a business.” It may take multiple tries. We're going to have a very long-term view of it. But then, we don't just kind of keep putting more money and more people into things that aren't working. We'll adjust, we’ll measure, we’ll be very self-critical about what's working and what's not working. We'll change a lot of things along the way so that it's a combination of long-term focus and short-term adjustments. I think on the technology side, it's a very fundamental and important observation. Obviously, telco infrastructure, as you said, is not something which changes every three months or every year. And that's why the move to the cloud is so fundamental. You now see telecoms building in the cloud and starting to push services out to the edge using the cloud. I think that it creates a lot more flexibility. You see people building with microservices and having automated deployments. That speeds up all the deployments and provides the flexibility of the cloud for the telco core. I mean, Telenor is an early runner, with a low-cost virtual mobile network brand in Sweden. You have a cloud-based mobile core developed and managed as a service, in collaboration with Working group Two, Telenor and AWS. I think that's the type of environment we need. We can't invent the next G overnight, but we can work much more nimbly, much more rapidly and with much, much lower capital cost for telecoms.

Sigve: Erlend, you have taken a position in Europe to try to disrupt the telecom industry by building core mobile platforms in the cloud. We are testing that out ourselves in our own operations. You are also now starting to get external customers. If that really works, this will be a very different software-based way of providing core platform services. How do you see the potential of that?

Erlend: I think what we're going to see is what AWS did to data centers. You're going to see something similar happening to operators. One way of looking at what AWS did to data centers is, you know, everybody had their own data centers running in their own specific ways that were fairly closed and quite specific to the individual deployments. AWS comes in, deploys globally consistent infrastructure and makes it available for third parties. They invite third parties to build on top of it and to publish their products in a marketplace-like logic. I think what we're going to see is a move towards mobile core platforms for operators where you build a globally consistent set of functionalities that allows you to scale, to attract developers and build global marketplaces. But that can almost only be done if you leverage the global ecosystem of infrastructure providers like Amazon. I think for us, AWS is an absolutely critical factor in putting our application on top of the AWS system in a way that allows the business dynamics that AWS unleashed in the infra layer, also in the telco application layer.

Sigve: One question I'm often hearing, Adam, is that with security regulations becoming tighter due to developments within areas such as data privacy, is there a limitation to how much we can use the cloud in the telecom space?

Adam: Privacy and security is an incredibly important topic and you see a lot of data sovereignty concerns and a lot of questions about national boundaries and how data should be treated within and across nations and customers. Consumer privacy is paramount. We've always, since day one, had security as our absolute number one priority. No debate, no questions asked, no deviation allowed. We will drop anything if we have a security opportunity or a security issue. It's cultural for us. As a result, we have a lot of technical capabilities, both around just basic core security and around security and privacy features that we expose to customers. We're seeing some real innovation from our enterprise customers as well as, of course, from our telecom partners around the world.