The telecommunications industry has experienced sweeping transformation since the U.S. Justice Department broke up the Bell System in 1983. Where industry leaders once needed a solid background in operations with an added dose of cost-based service models, modern telecom executives count themselves among the savviest business leaders to address the formidable challenges that lie ahead.
Yet shifting market forces threaten this assuredness:
- Demand for traditional services has leveled out or declined slightly.
- Competitors erode the customer base while exerting downward pressure on rates.
- An aging infrastructure requires billions of dollars in investment at a time when debt and equity markets have become less hospitable toward public utilities.
- An uncertain regulatory environment compromises the ability to sustain profits and build for the future.
The next generation of leaders faces these challenges with strong customer relationships and a solid track record of performance. A range of innovative strategies from an operations, technology, and business perspective can help them diversify their revenue streams while scaling back on costs. But they’ll need the following eight core competencies to take advantage of those opportunities.
Eight Core Competencies Leaders Must Possess
While the company may pursue unregulated business opportunities, telecom service provisioning remains a highly regulated enterprise. Senior leaders need relationships with key government personnel and sufficient experience with regulatory processes to generate positive outcomes.
Tech-savvy consumers expect more from their service providers than ever before – more bandwidth, more applications support, better service quality, superior customer support – and they want it yesterday. With fierce competition from multiple players, telecom executives need a clear sense of which opportunities offer a sustainable advantage. They must anticipate demand and provide services as the market awakens or matures. And they must understand the company’s value equation and develop messaging that resonates with their target audience.
Senior leaders need to keep their fingers on the pulse of the market forces that impact their current and future success. They need to stay abreast of federal regulation and legislative priorities to assess the impact on their service offerings, profitability and sources of funds.
They need a grass roots understanding of their customers’ evolving needs and preferences to plan for future product and service offerings and ward off competitive incursions. They need ready access to a network of subject matter experts to help them keep pace with the breadth and depth of technological innovation in the industry. And they need to watch the industry’s innovators to see how their strategies and successes shed light on future possibilities.
Market intelligence goes hand-in-hand with strong financial management skills. Strategic investments in new or existing businesses require a detailed understanding of the underlying economics. Next generation leaders ensure they have access to sophisticated cost analyses that create distinctions between profitable businesses and those that drain the company’s resources. They ground their projected revenues, expenses, and cash flow in reality. They structure financing in a way to maximize their organizations’ long-term viability while taking full advantage of governmental incentives and tax savings opportunities.
Today’s executive must have personal knowledge of the sea of technology deployed in the modern communications network and the bench strength to provide that level of expertise. A tech-savvy leader will know what’s available and what’s coming down the line. He or she will also know what questions to ask or “gotchas” to avoid when new initiatives get on the drawing board for discussion.
Multi-Generational Organizational Skills
The corporate landscape will witness a changing of the guard as boomers give way to millennials at all levels of the organization. Astute leaders know how to honor boomer contributions and extract their “tribal knowledge” while paving the way for a cultural shift with the younger generation. They are also adept at managing relationships that cross organizational boundaries to make strategic partnerships, joint ventures, mergers, and other business arrangements successful. And they will be familiar with the principles of change management and be able to guide the organization through the industry’s ongoing evolution.
Mergers and acquisitions (M&A) have long been strategic options to achieve economies of scale, reduce operating costs, and bolster the balance sheet in a way that attracts capital for infrastructure investment. Yet there are other options to consider. For example, a group of like-minded leaders could form a multi-company administrative services company to provide accounting, human resources and IT services at substantial savings for all parties. An electric coop might partner with a telco to build a broadband network to benefit the coop’s customers by leveraging its right-of-way and access to financing and the telco’s technical expertise and support capabilities. Even so-called competitors might find common ground on which to build a business that benefits them both. Next generation leaders invite the exploration and are open to new modes of operation.
Despite the need to evolve with changing environments, astute executives continue to render dispassionate assessments of all new business opportunities.
Among the areas industry leaders consider:
- Market demand for new products and services as well as the competitive environment in which they will be offered
- Core competencies each partner brings to the table and the synergies created through their combination
- Gaps in skills and experience that could impede success and how they will be addressed
- Financial stability of the affected entities and the impact of the new venture
- Sources of capital under the new scenario
- Tax implications for the businesses and their owners/shareholders
Emerging leaders make sure their organizations have the right internal control systems and data analytics capability to manage their operations efficiently and effectively. They define performance metrics consistent with their business strategy and use them to make tactical adjustments, as needed. They also take cybersecurity very seriously and institute the appropriate protections and processes to minimize their risk of attack.
The ever-changing landscape of communications poses a challenge for many organizations, but when addressed with the right capabilities, these challenges become opportunities for growth. By excelling in the competencies above, organizations can stay relevant and become an example of next generation leadership in their industry.
This post was originally published on November 5, 2014. It was updated on January 24, 2018, to provide you the most current information.