How Tele2 found and implemented its purpose
Once known as a scrappy challenger for taking on the telecoms monopolies in the 1980s, Tele2 has the challenger spirit in its DNA. There were signs however, that the 25-year-old telco had lost its energy as it had matured. It needed a new purpose - something that cherished the past, but was fit for the new world. Allison Kirkby, the President and CEO of Tele2 Group shares the journey.
Tell us about Tele2’s origins – how did it all start?
Our founder Jan Stenbeck was an entrepreneur - almost like the Richard Branson of Scandinavia. He spotted the opportunity from the deregulation of the industry to make telecoms and the internet more accessible to all. So, that’s where it started. It was a challenger. It didn't have many resources - but it had an energy. That DNA is still very much alive today. We call it the Tele2 way and we have six values. The first and most important was to challenge - the monopolies, the norms and the big fat-cats.
Why did you feel Tele2 needed to renew its purpose?
Our industry has matured significantly since Jan founded us 25 years ago. We’re no longer in this growth industry where you’re posting significant revenue growth every quarter. We needed a new mantra to take us forward, because we weren’t going to be rushing into new markets anymore. I’d also been frustrated by the previous purpose of being a value champion - offering more for less. It didn’t help us stand out anymore and didn’t give us a sense of mission to improve what we wanted to do for our customers.
You’re a finance person, historically. Finance people can be quite sceptical of purpose. What have you seen that makes you feel purpose can be a successful business lever?
I might be a trained finance person, but I spent twenty years at Procter & Gamble, and it was deeply ingrained in us that without a sense of vision and purpose over the long term, it becomes difficult to differentiate yourselves, to talk to customers and to hire the right people. You need a sense of purpose. It just gives everybody that clarity – that North Star – and allows everybody to be driving in the same direction. It makes communication much simpler as well, when you’re all aligned against one thing.
What was the journey to arriving at the new purpose?
I didn’t want it to be a desktop piece of work that was just done by the leadership team in isolation. We had creative people, network people, IT people, finance people – we had a real melting pot of the organisation to help us come up with something that would resonate going forward. What I really enjoyed – of the eatbigfish process – was the engagement of the organisation and the ideas coming from the people - the heartbeat - of the company. Eatbigfish made the process work extremely well.
What was the new purpose that you and the team arrived at?
Where we ended up was 'Tele2 fearlessly liberates people to live a more connected life.' It was important that connectivity was spoken about in the context that only Tele2 could. So, an old telco incumbent can’t really talk about liberation because they tend to shackle their customers into difficult to get out of contracts. And then, none of our peers could have used the word fearless. And so, the fearlessly liberating – alongside the connected life – allowed us to resonate in a way that nobody else could copy.
How have you brought the purpose to life and enlisted the broader management to use it and apply it to their daily work?
The purpose is the overarching ambition for the company – to fearlessly liberate a more connected life for our customers. And then there’s a number of how-we-win choices that goes around that - that's our brands, how we connect our networks, using digital cost structure and people. And so, the purpose goes into absolutely every pillar of the strategy. We launched that, first and foremost, with our extended leadership team – which is like the top 100. And we then left the organisation to run with it.
How did you assess whether they were genuinely delivering against the purpose?
We have three clear goals as a company. First, it’s to have the happiest customers. Second, it’s to have the most engaged employees. And third, it’s to offer the highest returns for our shareholders. For employee engagement, our employee NPS went from 24% to 37% last year. We've made amazing progress on total shareholder returns – this time last year we had a share price of 70-80 SEK – we hit 115 SEK last week. Customer satisfaction is taking more time and that's the real focus this year.
Tell us about different manifestations of the purpose within the culture. Let’s talk about the fearless bike ride first of all. What was the fearless bike ride and why did you do it?
Before we launched the new purpose I'd built a totally new leadership team. And on our annual employee survey – we call it the My Voice survey – there was a decline in the trust measures. People didn’t know the leadership team. So the challenge was how do we link the new purpose – to the new leadership team and allow the organisation to get to see us as a team. So, we did a bike ride between Latvia and Lithuania. 332km over two and a half days. The leadership is very competitive so it became a competition and the organisation was able to vote for who they thought would win. As people voted they could read profiles on each of us. We were asked questions about our fearless spirit and our challenger spirit, the training we’d done - or not done. So, there was plenty of engagement prior to the race. And then during the race, because our bikes all had Tele2 IOT connectivity, people were able to monitor our progress each day. So we raised our profile within the organisation, it brought us together as a leadership team role modelling the purpose and we raised money for charity - for every vote Tele2 Group contributed funds to SOS children’s villages in the Baltics.
Tell us about the recruitment ad. Having the first public manifestation of the purpose as a recruitment ad is a very interesting thing to do, isn’t it? When you first saw that piece of communication – how did you feel?
Well, I laughed, because only Tele2 could come up with an ad like that. And then I felt we’ve got it in terms of fearless, because it truly was fearless. It was different, but very Tele2. And we want to keep hiring people that resonate with the Tele2 way and the culture and the purpose that has made Tele2 great and will make Tele2 great in the future.
Tell us about the building as a canvas for the purpose. In the very short time space you had before the building opened, how did you bring fearless to life within the physicality of the building?
The building was designed and influenced by the six values of the Tele2 way. And those six values very much informed the new purpose. So it was being designed with an open, flexible, challenger, cost-conscious mindset – which is at the heart of everything we do. The digital screens allow us to bring alive the purpose in this blank canvas. We have our quarterly all-hands meetings in the central auditorium where again we can bring alive the purpose and the strategic themes that come off the purpose.
What else have you or the leadership done that manifested the purpose and helped shape this year?
We launched Unlimited in April last year. Unlimited means you can consume as much data as you want - stream as much Netflix as you want - and you pay a €25 monthly subscription – no matter how much data you use. That was very brave. Because data costs money on our networks. So, our network team have had to think about how we ensure our costs don’t get out of control if consumers consume more and more data. They’re increasingly looking at doing more network sharing so that our cost of infrastructure and our future capital expenditure is not just a Tele2 bill but is shared with other operators in the markets. Unlimited has transformed our momentum in the Netherlands and it’s transformed the Tele2 brand here in Sweden – which has helped to differentiate it versus the others. And it’s been a big enabler for our growth in the Baltics as well. And because the purpose took us away from being mobile only and about being about connectivity in its broader sense. It allowed us to start to seriously think about merging with Com Hem. It had been something that we'd talked about for years – but we’d never taken it forward because it seemed to not be aligned to our strategy. Once we’d liberated connectivity – it’s not just about mobile networks, it’s about offering connectivity to our customers, no matter where, when or how.
How does being the CEO of a challenger company differ from being the CEO of perhaps a more established company?
In many ways it’s easier. You’ve got a different attitude in your organisation and you’ve got less legacy and silos that drag you down. However, you also set the bar very high. When you say you’re a challenger then your customers, employees and shareholders always expect you to be doing something different. You have to keep evolving. I’m a bit of a change junkie – I love change. You have to enjoy change to be a challenger CEO.