Hardnosed doctor hard act to follow

By Richard Braddell

Between the lines

Can a worldwide search find a chief executive for Telecom of the stature of Roderick Deane, the man whose intellect, persuasiveness and hardnosed business sense have kept him towering over New Zealand telecommunications for the past seven years?

Before his arrival at Telecom, Dr Deane had an established record for tackling issues head-on, be it as deputy governor of the Reserve Bank, where he head-butted Sir Robert Muldoon during the currency/constitutional crisis of 1984, as chairman of the State Services Commission during restructuring in the 1980s, or as chief executive of Electricorp.

These attributes he brought to Telecom in November 1992 when the company showed every sign of having slipped its moorings into a drift that could be measured by a flat share price.

But not for long. The cost-cutting, characteristic of Dr Deane's tenure, the rollout of new products and services and the exploitation of advantages inherent in the regulatory environment brought joy to investors and sharemarket analysts, if not competitors.

True, many of the regulatory disputes, particularly those with Clear Communications, were a legacy that Dr Deane inherited. But they were to lose none of their heat, and were not helped by the Government's apparent willingness to allow Telecom to restructure its regional operating companies out of existence, a move that made it more difficult to determine if monopoly profits were present.

Doubtless, Dr Deane's skills of persuasion played a part there. But he has never conceded that there was a problem, or anything unfair about the regulatory environment.

As Dr Deane said yesterday, to survive and prosper in business you have to be tough but meticulous in meeting your commercial and legal obligations. No doubt that he has done that, but can his successor do the same?

Much will depend upon the appointment. From within, the chief financial officer, Jeff White, and the group general manager of services, Theresa Gattung, are the names most often mentioned.

Whoever gets the job will face challenging times. As Dr Deane found, fast-changing technologies and intense competition can buffet even the most entrenched incumbent. Witness to that, Telecom's dramatic 19 per cent profit slump in 1997. By the time that result was announced, Telecom was already regrouping and putting paid to sceptics.

There is no guarantee that conditions will not turn against Telecom again. The Internet offers huge promise, but brings with it even bigger challenges. The wrong technology decision, or investment too soon or too late, could give a competitor a critical advantage.

Dr Deane concedes that his time at the helm has brought its share of stress. It may only get worse.

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