‘It will never return to normal’: Telstra boss warns business needs to adapt to survive

It was fitting that Penn made the remarks to an audience of businesspeople from his home office in Melbourne rather than a tower in the Victorian capital’s CBD.

It was a speech that could well have been titled “disrupt or die” from an executive that has had a difficult first-hand experience of just that. Telstra had its broadband monopoly regulated away 10 years ago.

It spent plenty of time fighting it but had to ultimately adapt.

It has needed to spend billions of dollars, cut billions in costs, undertake a massive change in the way it operates and overhaul its workforce numbers to overcome the challenges presented by the NBN.

And over the next couple of years it will radically change its corporate structure.

Telstra has also watched the disruption the fast-growing streaming services such as Netflix have had on the fortunes of its investment in cable company Foxtel – which is now struggling to adapt its operations and move into the streaming space with entertainment service Binge and Sports channel Kayo.

It may be too harsh to describe Penn’s speech as self-serving but the accelerated pace of movement to digital is good for Telstra – a company that supplies digital communications and services.

Indeed its rapid rollout of 5G mobile infrastructure with its enhanced data capacity plays perfectly into that future.

That said Penn makes a sensible point that businesses and governments have to become more flexible with their workforces and their projects. This is especially so for big infrastructure plans that involve how we work or travel to central business districts.

“It’s certainly worthy to reassess any major infrastructure program centred around the CBD now and look through the lens of the new world we are in because there certainly are going to be changes going forward,” he said.

Telstra houses tens of thousands of staff in office locations around the country and has CBD offices in capital cities.

“As a major employer we are already moving to a ‘location agnostic’ approach for all office and contact centre-based roles, opening up the talent pool beyond the typical CBD with a hybrid of digital and physical tools and spaces tailored to specific roles, preferences and needs.”

He isn’t predicting that one can take the “business” out of “central business district” but predicts these precincts might become centres for arts, entertainment and sports – with some corporate meeting places.

(The comments won’t sit comfortably with business leaders whose companies own commercial property or CBD retail malls) or even some toll road operators – the foot traffic and car counters.

Penn’s comments about the future of the business landscape might also concern airline executives, who are waiting for life to return to normal.

“The biggest risk we face as leaders is believing things will snap back to how they were. They will not – and in many ways they should not,” Penn said.

He said business leaders should not squander the opportunity for change that COVID has forced on them.

“We have an historic opportunity now to renew, revitalise and reimagine businesses fit for purpose in the digital age.”