opinion/analysis by Renai LeMay
7 November 2013
The rapid replacement of respected NBN Co chief operating officer Ralph Steffens with a Telstra executive who appears less experienced with fibre rollouts but better politically connected represents a key signal that NBN Co’s senior executive hiring process has now become completely politicised and is no longer independent from the Federal Government.
When NBN Co hired its outgoing chief operating officer Ralph Steffens in November 2011, then-NBN Co chief executive officer Mike Quigley rightly praised the former BT executive for his skills and experience with major fibre network rollouts. And why not? After all, as NBN Co pointed out at the time, Steffens was directly involved with two major networks in Europe — the ongoing upgrade and oversight of some of BT’s infrastructure and the delivery of a 15,000km, 12 country fibre rollout for COLT Telecom.
At the time, Quigley said: “As an experienced telecommunications executive who has presided over major network rollouts across Europe, Ralph is ideally suited to the role of overseeing this vital upgrade of Australia’s telecommunications infrastructure.”
Steffens’ appointment was regarded as a coup for NBN Co. After all, skills in large-scale network infrastructure deployments are extremely hard to find in Australia. With neither Telstra or Optus (or, for that matter anyone else) really having conducted any large scale fibre network deployments in Australia since the rollout of the HFC cable networks in the late 1990’s, it would be logical for NBN Co to look overseas for such skills. Quigley’s own experience was mainly garnered in the US.
In this context, Steffens didn’t represent just any candidate. Instead, he was pretty close to the cream of the crop — an executive who had direct, hands-on, wide-ranging experience with fibre network rollouts across Europe, as well as having worked at executive management level for a massive telco such as BT.
There is also the fact that Steffens was personally excited about the chance to join NBN Co. As the executive said when he was appointed: “I’m proud to be joining a visionary project that is the envy of the world. Delivering high speed-broadband to every home and business across a continent the size of Australia represents an enormous challenge but the opportunities it will enable are endless. I’m genuinely excited about the ability to participate in the building of the NBN.”
Looking back on the past several years, although there is no doubt that NBN Co has failed to deliver on its targets and that some blame for this must rest with Steffens, there’s also no doubt that Steffens personally has been doing his utmost to keep the company on track. You can see this through the good reputation the executive has amongst his peers, as well as Steffens’ move to make the company’s construction chief Dan Flemming redundant in January this year. At the time, I wrote about the move:
“… what this situation reads like is a clear-cut case of the company’s relatively new chief operating officer Ralph Steffens (he’s been at NBN Co little over a year) taking a more direct hand in the NBN implementation.
While Flemming was no doubt very competent, he never struck me as a heavy hitter at NBN Co. In comparison, Steffens is very definitely a heavy hitter, both at NBN Co and globally. Prior to taking his current role, Steffens (pictured, right) held a number of very senior positions at British telco BT, where he led a team of no less than 4,000 staff based in 34 countries as the company’s managing director of service delivery.
However, and perhaps more critically, previous to that, Steffens held down a long-term role at European telco COLT Telecom, where he rolled out a series of metropolitan fibre networks across Europe.
My suspicion is that Steffens, now having a year under his belt at NBN Co, is taking more direct control of NBN Co’s construction unit and hasn’t been afraid to kick some ass to get that job done, especially as the company is now under the pump to show results ahead of the upcoming Federal Election.”
Now, I have no doubt that, with NBN Co’s mandate having changed substantially under its new political management, that Steffens would have definitely considered resigning his post. What engineer wouldn’t consider getting out, when the rollout you spent so much effort getting off the ground gets radically changed just as it was starting to seriously deliver? However, we should also consider that the executive is not one to chop and change job roles every few years, and that he knew that he might have been placed in this situation getting involved in the NBN to start with. He knew the Coalition was likely to win the 2013 election.
Coupled with NBN Co’s cryptic statement today that Steffens would step down as “As part of the transition of the National Broadband Network to an open network architecture including fibre to the node”, what this signals to me is that NBN Co executive chairman Ziggy Switkowski or someone else might have quietly signalled to Steffens that he would eventually be removed from the NBN Co chief operating officer role if he didn’t resign, or at the best have his influence within NBN Co marginalised. It could have been something as simple as a growing awareness by Steffens that he was being seen by the higher-ups as part of the ‘old guard’ that has failed to meet NBN targets over the past several years.
Further evidence for this suspicion comes through the fact that Steffens was replaced with Greg Adcock, a Telstra executive very familiar with the local landscape who was very publicly fitted up for a senior NBN Co role by Turnbull and the Coalition months before the election, but who doesn’t have anywhere as much experience as Steffens with last-mile fibre network deployments. Adcock has been Telstra’s point man for the NBN and has worked directly on Telstra’s remediation efforts of its own network in preparation for the fibre upgrade (even, apparently, leading the Project 45 initiative to speed up the NBN rollout) but he’s not an out and out network specialist as Steffens is. His experience has been more varied.
And yet, if the Coalition did want to fit Adcock in at NBN Co, the COO role would be ideal for that aim, given its senior level reporting directly to Coalition NBN Co appointee Switkowski, its oversight of the construction portfolio within NBN Co and the fact that Adcock was likely working in the long-term towards a similar position at Telstra. The COO role at NBN Co is fundamentally different from that of other telcos, as it’s so heavily focused on construction. NBN Co is not Telstra. This is why Steffens was appointed to the role to start with. And yet, it would be an ideal fit if the Coalition wanted Adcock in a senior role at the company.
Now, I don’t know whether Steffens organically resigned from the COO role at NBN Co or whether he was subtly or blatantly pushed. And I don’t think we’ll ever know for sure. When you get to the senior executive level, these things tend to become a bit blurry. It’s not always black and white and it’s not always sinister. It’s hard to tell from the outside.
But I do know one thing: There does not appear to have been any kind of open hiring process for the COO’s replacement. There was no global recruitment process for this premium role, no advertisement of the role, no head-hunters hired, no due process whatsoever.
Instead, what we see here is that a very senior telco executive with global experience in fibre network rollouts has been replaced without any kind of executive search process. Instead, the Coalition appears to have negotiated to a certain extent with a Telstra executive with lesser experience with fibre rollouts before the Federal Election, to take a senior role at NBN Co if the Coalition took power. And that is precisely how it played out.
This isn’t the first time we’ve seen this with NBN Co over the past several months. In fact, it’s the fourth — with NBN Co already having appointed Ziggy Switkowski, JB Rousselot and involved Justin Milne under very similar circumstances.
Under the watch of previous NBN Co chief executive Mike Quigley, global searches for executives were conducted that resulted in the appointments of highly qualfied and experienced personnel such as Steffens. Under the Coalition, it appears that you have to know the right people and have your position fitted out for you ahead of an election.
Have any laws or regulations been broken? It’s very unlikely. But is what’s happening at NBN Co right now unethical? Contrary to normal practice? Controversial? Certainly these are all words which it would be easy to associate with NBN Co’s new executive hiring practices, which differ radically from the old way of doing things. And the whole situation certainly makes your writer, for one, distinctly uneasy. This is an important project and I’d like to see more process around the appointment of its senior executives than just a private conversation with senior Coalition figures before a Federal Election.
I would hope — I would desperately hope — that the situation is more complex and nuanced than it appears from the outside. Because if Communications Minister Malcolm Turnbull is merely issuing instructions to NBN Co exec chair Switkowski along the lines of “hire this guy”, then that would be a very dangerous precedent to set indeed. And it would be the definition of politicisation in action, something nobody should want to see in a supposedly independent government business enterprise.