CXO Challenge

CXO Challenge is a landmark study into the strategies and tools Australian organisations are employing to meet the needs of the digital consumer.

Below we profile the country's most influential technology and business executives and discuss disruptive innovation across key sectors of the Australian economy.

Keeping the peace

Vincent Dempsey - Vodafone Australia

Brett Winterford   |   September 19, 2014

Vincent Dempsey, GM of Digital Channels, Vodafone Australia.

It takes a thick skin to mediate between the IT and digital camps.

In May this year, Vodafone Australia parted ways with its chief information officer, and did not hire a new one.

The CIO role, the company announced, would be ‘absorbed’ into the broader technology team.

Vodafone, like fellow telco Telstra and many others, has over recent years run two technology teams: one that predominantly manages internal systems (IT), and one that manages online interactions with customers (digital). 

After several years of investment in improving its mobile network and its IT systems, it's now the digital area that's getting a lot of the love.

Vodafone’s priority in 2014 has been how to demonstrate the value of its infrastructure spend via digital engagements with consumers. On that score, Vincent Dempsey, general manager of digital channels at Vodafone, has been in the hotseat.

Dempsey qualifies that he's "not the IT guy, I’m the business guy,” as if to suggest that somebody else at Vodafone should have been interviewed for a series on digital disruption.

But having worked in product roles for both Vodafone and Optus and running the digital channels strategy at Channel Ten, Dempsey’s got good grounds to express an opinion.

Both media and telecoms have relied for many years on protection from new market entrants via the prohibitive costs of network and broadcast licenses, but can't rely on it much longer.

“The advent of the internet made that protection not so much worthless, but very much reduced in their value,” Dempsey says, describing the challenge in media. “Today, anybody can create content and distribute widely.

“The entire business model around advertising on TV is about reaching a mass audience, but that can also now be achieved in digital environments. And over time, the cost per thousand (CPMs) that people paid for advertising is going off a precipice.”

The experience taught him that business leaders “need to be vigilant”, even in the most protected industries.

“Where any industry might think they’re safe, there are always things in the background that can erode.”

Telecoms differs slightly from broadcasting in that carriers have for a long time allowed others to access their networks.

Low-costs MVNOs (mobile virtual network operators) have in many cases had a bigger impact than desired by their wholesale provider. That's required the likes of Telstra, Optus and Vodafone to carve out a more defined audience that demands a higher value level of service.

Allowing competitors to access your network does have its advantages. The three major telcos have an unrivalled ability to pick up on digital trends far earlier than most other industries, and thus make smarter bets to meet the changing demands of consumers.

“If we’re not in the driving seat, we’re definitely at the front of the car,” Dempsey remarks.

He believes the key differentiator over the next few years - now that Vodafone’s network reliability issues have more or less been sorted out - is to offer a digital experience that is “second to none.”

“We need to offer the leading self-service for a telco in Australia.”

'You’re that waterfall guy'

Dempsey arrived at Vodafone to find its digital transformation was already underway, led by the former head of product technology, Craig Rees.

Rees had garnered enthusiasm within Vodafone’s digital team for using the agile software development method to deliver product at far greater velocity. Around 80 staff were working across ten streams and delivering services at far greater speeds than previously.

In contrast to this frenzy of activity, Dempsey was assumed to be a ‘command and control’ leader – a ‘waterfall guy’, in agile speak. He’d come from hierarchical, disciplined businesses, and didn’t want to turn any tables upside down without getting the nod from the broader business first.

Dempsey was - despite a slow conversion to the practice - initially concerned that some of these early efforts at Vodafone were “agile for agile’s sake.”

He fronted the Agile Australia conference in June with a provocative message:

“I wish I could work for an organisation that had absolute freedom to iterate and iterate and just know that we’ll get there in the end,” he told the audience. “The reality is that we work in an organisation with rigid structures around approvals and finance. We needed to find a way to define business outcomes.”

He decided that delivering on his goals would require the support of a range of stakeholders beyond the digital team and its home in sales and marketing.

C-level execs would need to buy-in. So would IT.

Bridging the gap

“I would not want to be a CIO or CTO right now,” Dempsey told his audience in June. “Where would I even start?”

A few months later, Dempsey provides some context to what’s fast becoming a sore topic across the entire industry.

What banks, telcos and other organisations on the path to digital disruption are looking for, he says, is a way to adapt the product construct around “actual intelligence of what the customer wants".

“[But] IT systems are structured in a way that it takes longer than it should to get new products out there,” he said.

“If you look at the spectrum of pure agile to older world IT, I'm lucky in that I work completely in a digital environment. I get the advantage of all the new platforms and all the changes in technology that occurred in the last number of years.

“I think any CIO or CTO’s job is very difficult, because you have to marry a world that has major backend IT systems with a world that is trying for a much faster, more agile outcome.”

Dempsey says it is “unhelpful” that agile purists start from a position that the way IT has done things for decades is the stuff of dinosaurs.

“I actually think that agile sometimes feels a little bit cultish,” he said. “Sometimes agile can be very preachy - everything you’re doing is wrong, and you need to change.

“It’s important not to try and change everything. My philosophy on that is yes, we’ve been doing this in a certain way for many years, and yes, it probably needs to change. But you need to find a way to still deliver on KPIs. You still need to provide the business with certainty around what we’re going to deliver to the customer and some certainty on outcomes.”

Some of Vodafone’s initial experiments around agile ways of working had actually resulted in lower engagement levels amongst staff, he noted.

“You need to try and find a way to make the new world work with the old world. A lot of people who work in agile are advocates of lean start-up - and that’s a great way of working for start-ups - but large corporates also need to find ways to change. So there are people in the middle, and hopefully I'm one of those, trying to provide that bridge between the lean startup world and the corporate world.

“I'm working with the wider IT business on demonstrating how we can work together.”

Getting buy-in

Dempsey found himself with the dual challenge of needing to win over the board on his vision for digital differentiation, while simultaneously trying to help the digital team understand the constraints they had to work in.

It required a “coalition of the willing”, he said.

Dempsey promised his own boss, the head of sales and marketing, that with the right tools and processes in place, he would deliver on the challenging sales and service targets set for him at a faster rate of knots than forecast. In doing so earned himself his first executive sponsor.

He then delivered three truths to the telco’s broader management to build a case for change: first, that digital will no longer be niche but mainstream.

Second, that the way customers interact on digital platforms will be a telco’s “primary differentiator” in a world where “a network is a network and everyone has access to the handsets”.

Finally, he had to deliver a difficult prognosis - that “if we keep working the way we are now, we’re not going to get where we need to get to".

The most important executive for any technology leader to win over, he says, is the CFO.

“I talk a lot about getting the CFO on board, to make sure finance understands what you’re trying to do and to get them to buy into your business outcomes,” Dempsey advises. “He’s the man with the cheque book.”

Dempsey is resigned to the fact that the approval processes and funding gates CFOs usually seek for a project aren’t going to go away in any soon. He also accepts that this doesn’t mesh with a pure agile approach, which demands a constant trickle of funding.

So he chose not to talk of ‘agile’ and ‘lean’ approaches - concepts foreign to most CFOs in any case - and simply focus on the outcomes of “delivering faster and more efficiently.”

He won a quarterly funding envelope, with the budget for every quarter dependent entirely on whether the team achieved the measurable outcomes set for it in the last. Dempsey chose some quick wins that would show what was possible, and got started.

Agile-lite, or 'the best bits'

Dempsey has attempted to take the best parts of agile - or at least its overriding principles and goals - and apply it within the constraints of a telco.

“The days of knowing what your roadmap looks like for 12, 18 or 36 months are gone, because with this level of disruption you just don’t know what’s coming,” he said.

“So what I focus on is setting up a team that can respond quickly and still can deliver quality. That requires changes to the culture and the way we work - trying to remove it from ‘command and control’ model to an environment where you’re leveraging collaboration across the people in your teams.

“Agile is a tool to do that, but it’s not just agile. We’ve overlaid agile with lean - we’ve used some of the lean tools as the oil to make the collaboration work better.”

The digital team now find themselves co-located with sales and marketing and IT. For the first time, Dempsey said, IT has been invited into the product conversation.

Vodafone runs collaborative design workshops for the development of digital services, where the team attempts to visualise the customer journey for any new process.

“We have everyone, including me, sit in a room,” he explains.

“We all have pens and paper and everybody draws out what the end result will look like for the customer. We have marketers in there, we have product owners in there, we have IT people in there. We come up with what we think the end result should look like and test it with customers before we build it.”

This approach has already borne fruit - Dempsey proudly notes that an IT platform manager came up with the best design of a new, customer-facing e-commerce process from one of those meetings.

“The design that worked best for the customers came from a person who traditionally we would never have spoken to about that,” he said.

Portfolio walls are now dotted across Vodafone’s North Sydney offices and are used for daily stand-ups, as is a larger wall for management to consider the bigger picture.

“Traditionally large organisations have probably not been the best at acknowledging that there are always difficulties in projects, and they’re hidden,” Dempsey said.

“As a manager, I'm the one who gets the most action out of that wall. I walk away after meeting my team and at every level they are telling me that there is a blocker here or there, that 'I can’t do this', that 'I need your help to sort this out'."

These practices have started to see traction in other areas of the business, he said.

“I think we’re lucky at Vodafone in that because the executive have agreed that there can be a new way of working, they’re open to learning where else it might be implemented. We can take some of the tools used in digital and ask whether the marketing product guys can also think a bit differently about product development. There’s no sacred cow around how you should work in the future.”

Months on, the overriding lesson for Dempsey is that explaining to your stakeholders why you’re making a change is more important than ‘how’.

If you’re going to take on the agile journey, “you’ve got to acknowledge that that change will disrupt, at a people level, at an engagement level,” he said.

“It’s not enough to train staff in agile and “let them free”. You’ve got to hold their hand a bit on the journey.”

Staff engagement levels are back up, he said, “because we spent the last year actually doing the why.”

And while he hopes he can be a good influence on the broader IT organisation, Dempsey doesn’t pretend to have a silver bullet for how back-end systems can be refreshed “without breaking the bank or the back of the business.”

“I think it’s like eating an elephant,” he shrugs. “It can only be done one bite at a time.”

More from the CXO Challenge

Vijay Solanki - Southern Cross Austereo

Australia's digital crescendo


Karen Wagner - Cardno

Tech SWAT teams kicking down the digital door


Carole Tokody - Cover-More Group

When does an insurance company turn into a software vendor?