Interview with CEO Rob Shuter

‘The real art is preserving energy for a prolonged period of time’

Vodafone Netherlands’ CEO, Rob Shuter, compares managing a company to running a marathon. Shuter, not surprisingly, is a keen runner himself. Last year he participated in the Dam tot Dam Run, the Amsterdam Marathon and the City Pier City Run, to name but a few, sometimes together with Vodafone colleagues. Great performance. But what about Vodafone’s performance during the last year? Shuter gives us an update.

Last year you labelled 2013-2014 ‘a perfect storm’. How would you describe the year 2014-2015?

‘This year was about building. We realised national 4G coverage and developed the core of our new IT system ‘Unify’, with a migration to the new system of the first 2 million customers at the end of 2014. We also introduced a great proposition for the fixed consumer market. In October 2014 we launched ‘triple play’, fixed internet, calling and watching TV via DSL. Of course, we already have optic fibre available for some time now. And last but not least, we redeveloped the Unified communication solutions for enterprises and launched OneNet Enterprise in September 2014, an overall solution for fixed and mobile business communication. Furthermore, we have experienced commercial success last year. In both the consumer and enterprise mobile telephony market, as well as the overall communication market (fixed, mobile and TV) we have won market share. I am therefore very proud of what we have accomplished and achieved in 2014-2015.’

So it was a successful year for Vodafone Netherlands. What were the key macro developments and in which way did they impact Vodafone?

‘The Netherlands slowly climbed out of the recession. The Gross National Product increased each quarter and also consumer confidence was back up, partly caused by rising house prices. People travelled more often and stayed abroad longer. For Vodafone this resulted in higher data usage abroad. And more foreigners visited the Netherlands, using our network during their stay. Data usage in general increased last year, as was the case during the previous years. People more and more opt for a ‘high end’ smartphone. The sale of the iPhone 6, for example, has broken all records.’

This is the third year that Vodafone Netherlands publishes an integrated report on its own initiative. What is the reason for that?

‘We believe in integrated thinking and an integrated approach. We involve our stakeholders and this results in integrated reporting during the entire year. Not just once a year.’

If we look at Vodafone’s role in the Dutch society, what is Vodafone’s key impact?

‘Most importantly, the positive impact we have with our core activities. People often want to talk about the impact we have on the environment, about sustainability and about everything we do with our Foundation. But the most important impact we have on society is through our core business. That has to be sustainable and as such deliver a positive contribution to society. Which is exactly what we do. We help mobilize people. We contribute to the way people live, work and find jobs, stay in touch with family and friends, travel, shop et cetera. This has a positive effect on their opportunities and the freedom, the flexibility and convenience they experience. With this we also contribute towards the growth of the Gross National Product. The industry in which we are active, provides us with lots of opportunities to make a difference. For me it is therefore a privilege to work in this industry ánd in such a special company as Vodafone. We do tremendously ‘cool’ things. And for our contribution to be permanent, our core business must be sustainable.’

For me it is a privilege to work in this industry ánd in such a special company as Vodafone.

How can Vodafone ensure a sustainable core business?

‘Sustainability to us is more than green and responsible. We constantly ask ourselves what is needed to still be successful and positive in 20 years’ time. To keep excelling in the telecom business, we have to offer an outstanding network as well as outstanding services. And for this, we need the appropriate licenses, technology et cetera. With our service provision we also aim to help our customers become more sustainable. Of course, we are also sustainabilizing our own business, for instance through the choices we make concerning our network, our offices and shops, but the impact these choices have on the environment is so much smaller than the impact we can have by helping companies become more sustainable. Our technology, for example, enables new Machine-to-Machine technology.

What progress has Vodafone made this past year?

‘If we look at our strategic pillar ‘Our People’ (Great Place to Work), we have, for instance, put a lot of effort into supporting our managers. This has led to a higher Management Index-score. I’m very pleased with this, because employees can only function well with good managers. The higher Employee Net Promotor Score is another great result. It shows that our people are enthusiastic about Vodafone. Only if we ourselves are enthusiastic, can we have enthusiastic customers. When it comes to our core values speed and simplicity, we have to perform better. We need to focus more on a number of major improvements instead of many small improvements like we did last year.

Within the pillar ‘Easiest Place to do Business’ we have made little noticeable progress according to our customers. That is disappointing. We have, however, put a lot of energy into things customers will benefit from, albeit in the long run. With our new IT system, for example, we will be able to service our customers even better. Nevertheless, we have also accomplished things that should have made a noticeable difference. Like the adjustments to the My Vodafone app. In contrast, the activities and results in our pillar ‘Build for the Future’ are very positive. I already mentioned the national rollout of 4G, the development of our new IT system and our overall communication proposition (fixed, mobile, TV). I’m therefore very proud of our people and partners that have made this possible. Just look at the rollout of 4G. In May/June 2014 we only had coverage in the Randstad area and 4 to 5 months later we had coverage in practically the whole of the Netherlands. That is a phenomenal achievement, something we are extremely proud of.

When it comes to our brand we have also achieved great progress. Our campaigns have become more consistent, we managed to bring across our position as playful challenger a lot better and we also integrated brand and network messages much more. Just look at what our team did around ‘Firsts’. That was awesome. And finally our reputation. Everything I’ve mentioned so far contributes towards that. Also in this area it’s all about an integrated approach. What the industry does as a whole is also important. It reflects on the individual providers and we actively contribute to this. Think about topics like network continuity and controlling your costs.’

What would you like to forget as quickly as possible?

‘With My Vodafone customers can monitor their data usage. That is an important feature for customers, especially with data usage rising fast. However, due to instability in the IT system and issues between the systems, this didn’t function properly at all times. Resulting in customer complaints and media attention by Radar for instance. What started as something positive, suddenly became very embarrassing. The lesson we have learned from this is that it’s crucial to constantly aim for the ultimate solution in one go. We should have asked ourselves more critical questions before going live with the service. And the alignment between a number of departments should have been better. We cannot expect department A to have the exact same knowledge and starting principles as department B. Things like that should always be aligned.’

What was the greatest challenge?

‘It proved a challenge to book progress on such a wide variety of initiatives and activities. Working on a fast network ánd on new propositions ánd on our brand et cetera. And at the same time keeping people motivated, inspired and healthy. Stay ‘energized’, so to say. In that respect running a company can be compared to running a marathon. It’s not a sprint. The real art is preserving your energy and spirit for a prolonged period of time. Three quarters of a marathon is simply great fun. You enjoy running with other people, having a laugh and sharing the same goal. But then you reach the last part. You’re tired, you’re in your own ‘bubble’ and you want to quit. This is when it gets tough. But if you manage to pull through, it’s fantastic. Afterwards, you are especially proud of the tough part and what you have accomplished in spite of that. It’s the same in a company. It’s the tough things that matter and that give you satisfaction. You can only be proud if you have turned something difficult into a success and you have really accomplished something.’

A marathon is simply great fun three quarters of the race, until you reach the last part. Then the going gets tough. If you pull through, you can be proud of what you have accomplished. The same goes for a company.

Were there any dilemmas?

‘The main dilemma was making the choice whether we wanted to invest in going live with our new IT system or in things that customers immediately and noticeably benefit from. We discussed this at great length. As in most other cases, also here we opted for the long term effect. Which meant investing in going live with the new IT system ‘Unify’. Other dilemmas, not surprisingly, involved tariffs. On the one hand we want solid financial results for our shareholders, but at the same time we aim to offer customers good value for the money they pay. It’s all about the right balance.’

What will Vodafone’s focus be in 2015-2016?

‘2014-2015 was dominated by building. The year 2015-2016 will be the year of commercial execution. Everything we do, will have the customer at the centre more than ever before. Around this focus point we have formulated 5 priorities, abbreviated to ‘PUNCH’. This stands for People at their best, Unify, Network no. 1, Commercial Execution and Hit the numbers. We want to enable our people to perform well, among other things by facilitating our managers and improving speed and simplicity. Unify stands for migrating the last remaining customer batches to our new IT system. Our no. 1 network was built in the past year. Now we need to ensure it remains at this no. 1 position and that customers experience it that way. And to be able to execute everything the way we want to, it’s important to be commercially successful and hit our KPIs. Like Yoda in Starwars used to say, ‘Do or do not. There is no try’. So, hit the numbers.’

Do or do not. There is no try.

And in the long run?

‘We are on a journey from being a consumer-driven mobile operator to becoming a total communication operator with the right balance in consumer and enterprise customers and the right balance in mobile, fixed and TV services. Our focus is on this transformation, now and in the years to come. Everything we do, is focussed on this. Whether it’s our technology or our people. Everything contributes towards this goal.’

This interview was composited in collaboration with Rob Shuter, CEO Vodafone Netherlands