‘The very definition of a safe bet’: Did Optus make the right CEO choice?
Optus has finally appointed a new CEO — the current chief of NBN Co, Stephen Rue — who won’t start until November, a full year after former boss Kelly Bayer Rosmarin resigned in the wake of a disastrously handled national outage.
As the boss of the National Broadband Network, Rue is currently the highest-paid government employee in the country, and seems — on paper — uniquely suited to run a national communications network. But is he the right choice to steer the telco’s reputation back on track? We ask the experts.
Benjamin Haslem: Director of media and public affairs, Icon Reputation
Optus parent company, Singtel, has tried to tick all the boxes needed to rehabilitate the company’s brand – not only with consumers but also with the Federal Government.
According to media reports, Rue was hired for his experience working with governments and in cyber security.
This expertise, added to his time as NBN CEO, sends a message to consumers that Optus has a leader who will protect their data and keep their mobile phones and internet-connected.
His government experience is a nod to the Federal Communications Minister, Michelle Rowland, that Optus wants to mend bridges with Canberra.
Last November, Optus chairman Paul O’Sullivan said the company’s next CEO should have experience in the telecommunications industry, effectively ruling out former NSW Premier and Optus executive Gladys Berejiklian for the top job.
A possible negative is the NBN’s reputation for failing to deliver, particularly outside the cities.
Rue was quoted yesterday saying he was looking forward to the “country as a whole … harness(ing) the power of digital connectivity to drive economic participation and social inclusion”.
Given the NBN’s perceived poor track record in the bush, this comment may draw a few wry smiles west of the Great Divide. However, it does dovetail nicely with a bi-partisan political desire in Canberra to improve digital equity and inclusion.
Optus partnering with TPG Telecom to create a new joint regional network demonstrates the telco is walking the walk.
Rue’s 17 years at News Corp Australia and three years as the Chair of NRL side the Melbourne Storm, suggests he has the private sector smarts to handle the rough and tumble of corporate life and is used to reporting back to head office overseas.
His media contacts won’t hurt either.
Of note, given former CEO Kelly Bayer Rosmarin blamed Singtel for last year’s mobile and internet outage, was the Singapore telco saying that along with Rue’s appointment it had created a new governance model that would be more decentralised to “empower” its businesses.
Rue won’t be able to blame head office if another crisis emerges, though Singtel did deny Bayer Rosmarin’s charge at the time.
His task now is to deliver on what Optus has promised customers since the Bayer Rosmarin departure – improved, faster, wider and less expensive mobile and internet, particularly in rural and regional areas.
He also needs to focus on lifting staff morale, which would have taken a hit in recent months.
Rue will need to communicate openly, regularly and honestly with employees, customers, investors, and other stakeholders about the telco’s challenges and his plans to address them.
It will be interesting to see if he makes changes in senior management, with a view to demonstrating this is a new Optus. However, he won’t want to cut too deeply for fear of further damaging employee confidence.
Luke Holland: Head of strategic communications at Think HQ
Stephen Rue’s appointment looks like the very definition of a safe bet. He is well-qualified, well-liked by his peers and well-placed in the sector to already know his way around. Rue’s resumé is pretty impeccable, too – his contacts through the Government-owned NBN will be worth their weight in gold, and a stint at NewsCorp never hurts from a media coverage point of view. His pandemic-era work at NBN, when our broadband network became a literal lifeline for millions, earned real plaudits, and shows a knack for leveraging the power of tech for the greater good.
You need to look very hard indeed to find a public misstep from him, with only some slightly ill-judged comments about broadband pricing several pages into his Google history. Presentation-wise, some eyebrows may be raised by Optus replacing a dynamic woman with an older man, but the coverage so far has been (perhaps predictably) pretty muted on that score.
And Rue is now master of his own destiny in a way his predecessor never was. Indeed, Singtel’s decision to finally take off the training wheels and let Optus and its Board make decisions about Australia here in Australia is in some ways the real story here, and acknowledgement that command and control ownership has been an issue for Optus for some time.
A big test will come if Optus once again find themselves in the spotlight, and how they show they’ve learned their lessons from last year’s PR car crash. But the real test for Rue? Keeping Optus out of the spotlight all together, keeping customers happy and mending fences with government. And that’s a tall enough order for anyone.
Sally Branson: Crisis communications expert
With the announcement of current NBN chief Stephen Rue as its new CEO, Optus has taken a safe step on its journey to reputation repair.
Significant industry knowledge would have been a key factor in the appointment, but we’d be naive to suggest that a coat of Teflon didn’t play a part. A person with a work history of avoiding negative associations would be a significant bonus when looking for a new CEO.
Having been at NBN for a decade, he’s had his share of issue-rich times in the top role but didn’t become a household name connected with contention.
Appointing a public servant – albeit the highest-paid public servant in the country – Stephen Rue has a career history of being able to serve many masters – which will bode well for an overseas-owned entity. Although Singtel Optus has perhaps learned some significant cultural lessons about Australian operations over the past two years and has said they’re moving to a more decentralised model of leadership, the reality is that they are overseas-owned and have a powerful board.
In their announcement statement, they were clear one of the incoming CEO’s key roles is rebuilding consumer trust – so clear in fact, it was their key statement. Reputation will certainly be a KPI.
Phoebe Netto: Managing director – Pure Public Relations
Optus resisted the temptation that many businesses with a maligned outgoing CEO fall victim to: immediately hiring a new CEO who could sweep in as the hero and change the narrative in the short term. Although that likely speaks to their corporate structure more than a newfound concern for public perception. Either way, waiting six months was a wise choice.
When you have a high-profile CEO publicly falling through the trap door, whoever is crowned the new CEO must be prepared to take responsibility for an organisational transformation as well as a PR one.
In this announcement from Optus, Mr Rue has promised an accelerated transformation. The problem with this is that it does not manage customer expectations. Transformation takes time. Making a former CEO the scapegoat and the new CEO the rescuer only works if there will be a drastic improvement to the customer experience shortly after.
A new CEO is certainly an opportunity for a brand refresh, but you need to be careful about how much fanfare is made. If it will take some time for a positive impact to be seen, the reality is that the new CEO’s initial moves will be anti-climactic at best. Often when a CEO has been ousted or resigns in negative circumstances, there is a great deal of change and repair required – and this usually takes time, especially if there is internal resistance and a need for deep cultural change.
Having a CEO with a high profile can be immensely beneficial to the PR of a business. A well-known business leader who is liked, trusted, and seen as an authority can attract confidence, help people connect with a brand, and lift the overall profile of the organisation.
Mr Rue certainly has credibility from his work history, but he doesn’t have a profile that consumers will recognise or resonate with. In fact, there seems to be a lot of mixed sentiment among consumers regarding the NBN. Since consumers don’t know what else to make of him, this will inevitably be used to form first impressions.
For this new leader to bring customers with him, he needs to speak directly to them. His quotes in the media release are loaded with corporate jargon and do not speak directly to consumers about what matters to them. Who is he appealing to when he says he wants “the country as a whole [to] harness the power of digital connectivity to drive economic participation and social inclusion?” It’s not the average consumer, that’s for sure.
And while he acknowledges the need for transformation, he has not said anything that will begin to repair trust. The board and Mr Rue need to add building this trust to their list of immediate priorities, and then focus on bringing that trust into the brand’s future. Issues are inevitable for every business, and the larger the business the larger the scale of issues. Considering that Optus is one of Australia’s biggest and most recognisable brands, they would have done well to recognise this before bringing in a new CEO who is a scapegoat in waiting.
Dr Neryl East, speaker and leadership credibility expert
It’s crucial that Optus and its incoming CEO draw a line in the sand and introduce a new standard of authentic communication that rebuilds credibility and trust. This needs to happen immediately and be consistent from now on.
Reputation damage has a cumulative effect; join a series of mishaps together and you’re on the back foot in a big way. Now there’s a chance for Optus to get proactive and show a change in culture and approach.
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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Benjamin Haslem
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luke holland
NBN
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Phoebe Netto
Sally Branson
stephen rue
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