Undergoing transformation underpinned by four building blocks
Data usage driving company to change how it operates
WHAT do you do if the roaring market on which you have built a multibillion-ringgit business over the past 10 years suddenly stops growing? And, what do you do if you know that this is just the beginning of that market diminishing in its importance to your future?
That is the situation that faces DiGi.com Bhd and its chief executive officer Henrik Clausen (pic).
At the recent International Directors Summit organised by the Malaysian Directors Academy and the Asian Strategic Leadership Institute (ASLI) in Kuala Lumpur, Clausen, who spoke on innovation and mindset, noted that voice revenue in Malaysia did not grow in 2011 and that “voice as a business is being reduced as we speak.”
So what does one do? “We need to change,” he says.
The good news there is an opportunity out there and it is in the form of data, but he notes that this is a very different business and very different world than the one DiGi has been in historically.
“There is no doubt that if we do not change, if we do not reinvent our business, we will stop growing,” he says.
DiGi currently has 10 million subscribers with a 28% market share and RM6 billion (US$1.9 billion) in revenue for 2011.
It makes for nice sound-bites but really, you can say the same is true for not just every telco in Malaysia but the world.
But here is where it gets really interesting. According to Clausen, DiGi has linked and woven the strategy upon which rests its very survival as a telco, into its vision and mission statement.
Yes, those fluffly, we-are-the-avengers-of-good sentences framed in the lobbies of many large companies.
Clausen links DiGi’s passion for growth to its mission and vision statements. “We have a vision in the company for bringing the Internet for all.” That means DiGi is not only driving product innovation but is gearing up to deliver the Internet to all 28 million Malaysians.
That is what keeps them motivated everyday and will drive the passion for change moving forward, he claims.
Clausen describes the moving of both the company and nation forward as a transformational agenda. “So innovation is not just about products and services, it is about transforming our company, and we have put it right smack into the core of our vision and mission statements.”
Because of the complexity of the task ahead, a much more structured approach was needed. DiGi thus formulated an overall change programme that supports what it does, with four key building blocks.
The first was to change its network. “While it was adequate over the past 10 years, it is not going to be good enough for what we need for the future.”
That is why DiGi is currently swapping out its entire network with a modern one by the end of the year to better serve the data needs of customers. With 6,000 points of connection throughout Malaysia, it is a massive task.
At the same time it is going to embark on an IT and process transformation too. This will happen over the next two to three years. “It is a huge journey of changing systems and processes. Unless we do that, we will not be able to deliver the products and services fast enough going forward.”
Next comes the way it distributes its products through all its touch-points with an estimated 30,000 places throughout Malaysia where DiGi SIMs and pre-paid cards can be bought.
But with data fast becoming the main value-add for DiGi, new channels need to be created and besides online support, by the end of the year, the company will have 200 stores to create a retail experience to advise and guide customers around the choice devices that are available. Two years ago it had none.
“It is a huge challenge for a company like ours and at the same time we need to deliver the business every day,” says Clausen.
This then boils down to what he feels is the real challenge. He acknowledges that DiGi is not more brilliant than its competitors. The things DiGi is doing, they are too. Indeed this was perfectly illustrated the very next day (May 22) when Axiata Group Bhd released its first quarter 2012 results with a statement that among others, spoke of "significant changes already affecting the industry" and "..begun a comprehensive and holistic approach to data ... customer experience ..organisational reforms.."
While everyone may mimic the same terms and management buzz words, the key, according to Clausen, "is the ability to execute that change. Drive that change faster and smarter, and more cost-effectively than the rest of the game.”
He then drills down to the very heart of his take on innovation and mindset -- people.
“I have only been here two years but I can see the very competent group of people who have created a lot of results over the years, but even this group is being challenged now,” he says.
And with its ambitions of transforming the industry and country, Clausen says Digi needs the best and most motivated people around.
It has built a strategy around keeping its best people based on the notion that it will have the most challenging and inspirational work environment, with new ways for work and development opportunities -- while ensuring they are competitively rewarded, he claims.
This has been a journey it has undertaken over the last two years “to attract and retain the best people because this is what I believe it will boil down to: People with the right mindset and execution skills; people with the right appetite to drive change and not afraid of it.” With the right team in place, backed by robust systems and processes, and a dare to change attitude, Clausen believes Digi is well prepared for the battle ahead.