Innovation during downturn can be planned

Telecom service providers can plan to make their companies stronger during the current economic downturn by making sure they have or acquire talent in marketing, branding, innovation and collaboration, a leading recruiting executive advises. Laura Lee Gentry, head of the Technology and Communications Practice at Egon Zehnder International, a global executive recruiting firm, believes a business slowdown represents an opportunity to do detailed assessment of what a business needs to be ready to boom when the recovery starts.

“There is a strong need for innovation, even in the face of severely limited capex,” Gentry said. “There is an increasing need for stronger capabilities in marketing and branding that probably come from other parts of the economy, and this is driven by competitive entry and disintermediation.”

For example, Gentry said, telecom service providers face new competitors vying for customer relationships, such as Apple’s iPhone App Store.

“iPhone claims 38 million US users, but those consumers likely consider themselves part of the iPhone community, not AT&T,” Gentry said. “That points to why telecom service providers need to work at being more open collaboratively and figuring out how to make it a win-win situation. Telcos have to be open to bringing [innovators] into their ecosystem – not be defensive, not say, ‘Those are my customers.’”

For example, she said, KPN Mobile, in its European markets, opened up its mobile platforms to enable small-to-medium business customers to develop their own services. “They said, ‘Here’s our network and our APIs [application programming interfaces].’ They have enabled small to medium business customers to develop their own services.”

As a result, KPN has seen multiple new services rolled out on its network and is able to benefit from that innovation, Gentry said.

Being able to see and be open to those kinds of opportunities requires a different kind of leadership than has been traditional to telecom, Gentry added. Where communications companies may have competed on the past on having built the best infrastructure, today they must compete as much on their ability to collaborate and be open to innovation from outside their own company, she said.

“Part of it is having the sort of marketing expertise to understand what consumers find compelling,” Gentry said. “The traditional ‘if you build it, they will come’ is not something that has been applied to consumer package goods – in that arena, all of the innovation comes out of that market. Consumers drive the innovation.”

There is also expertise required to managed and work with collaborators, including project discipline and accountability, Gentry said.

“Collaboration and influencing – that is the key competency that takes a leader from the early years of their career to later years,” Gentry said. “Executives need to learn to work through other people. I think that is more important today than being the domineering leader with a top-down strategy.”