LØRN Case #C0410
The Perfect Storm
In this episode of LØRN Silvija talks to Telenor Group CEO Sigve Brekke, about how Telenor is working to connect their customers to who and what matters most. The corporate culture of Telenor, the competitive advantage, and its strong focus on job satisfaction have set the company at great heights in Scandinavian and around the world. He joined Telenor as an advisor, and later became Manager for Business Development, where he was part of setting the strategy for growth in Asia. Since this, he has been CEO of Dtac and Uninor. He has also been key in M&A activities and most recently entered the market in Myanmar.

Sigve Brekke

CEO

Telenor

"Three tech components: AI, IoT and 5G network will create what we call «the perfect storm». When these elements come together and everything and everyone is connected, we get huge amounts of data that can be put through powerful cloud computers and analyzed through AI. We will see that there are endless opportunities, but also significant threats coming out from that."

Varighet: 32 min

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How and why Telenor stands out as a global Technology provider:

In all markets and industries, there will be losers and winners. The telecom industry is by no means any exception. Among all the big companies that the technological revolution has fostered, it is now Telenor, from small Norway that has risen to the top as one of the leading companies. How did they achieve this? And most important of all, how will they go about maintaining and reinforce this position in the future?

Sigve doesn’t think this success is something that happened by chance in recent years, he believes that it has been a result of a culture and a mindset that Telenor has had for years. Sigve says that ever since the start of the technological revolution, Norway and Scandinavia have emerged as market leaders. A number of groundbreaking technologies and solutions came from the Scandinavian markets in the beginning. Already 20 years ago, Telenor showed a unique ability to commercialize the new technology and optimize it according to the customer’s needs and usage pattern. Compared to a number of other companies, Sigve believes that Telenor is exceptionally good at sticking to its core business and vision: “Connecting you to what matter most, empowering societies”.

No matter how the market changes, people and organizations will always have a strong desire and need to communicate with each other. Sigve therefore believes that Telenor’s ability to always have this vision in focus, more than what technology they use or how large margins they can create, is what has led Telenor to where they are today.

Silvija points out that Telenor is by far not the only company that have access to this technology and who are seeing these trends, so is this really all? Therefore in conclusion, Sigve explains Telenors strongest card: From his experience around the world, he has realized the simple fact that people are people. They like to be seen, respected and taken seriously. If you can bring this culture along, you can really get ahead in the market. He therefore credits much of Telenor´s success abroad to the Scandinavian leadership culture that Telenor has brought with it out into the world. How the company has a strong focus on job satisfaction, an informal and diversified management culture and the strong will of the employees to be heard, and deliver the service the customer wants. This despite the fact that it can destroy the company’s current core markets.

How and why Telenor stands out as a global Technology provider:

In all markets and industries, there will be losers and winners. The telecom industry is by no means any exception. Among all the big companies that the technological revolution has fostered, it is now Telenor, from small Norway that has risen to the top as one of the leading companies. How did they achieve this? And most important of all, how will they go about maintaining and reinforce this position in the future?

Sigve doesn’t think this success is something that happened by chance in recent years, he believes that it has been a result of a culture and a mindset that Telenor has had for years. Sigve says that ever since the start of the technological revolution, Norway and Scandinavia have emerged as market leaders. A number of groundbreaking technologies and solutions came from the Scandinavian markets in the beginning. Already 20 years ago, Telenor showed a unique ability to commercialize the new technology and optimize it according to the customer’s needs and usage pattern. Compared to a number of other companies, Sigve believes that Telenor is exceptionally good at sticking to its core business and vision: “Connecting you to what matter most, empowering societies”.

No matter how the market changes, people and organizations will always have a strong desire and need to communicate with each other. Sigve therefore believes that Telenor’s ability to always have this vision in focus, more than what technology they use or how large margins they can create, is what has led Telenor to where they are today.

Silvija points out that Telenor is by far not the only company that have access to this technology and who are seeing these trends, so is this really all? Therefore in conclusion, Sigve explains Telenors strongest card: From his experience around the world, he has realized the simple fact that people are people. They like to be seen, respected and taken seriously. If you can bring this culture along, you can really get ahead in the market. He therefore credits much of Telenor´s success abroad to the Scandinavian leadership culture that Telenor has brought with it out into the world. How the company has a strong focus on job satisfaction, an informal and diversified management culture and the strong will of the employees to be heard, and deliver the service the customer wants. This despite the fact that it can destroy the company’s current core markets.

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Tema: Digital strategi og nye forretningsmodeller
Organisasjon: Telenor
Perspektiv: Storbedrift
Dato: 190614
Sted: OSLO
Vert: Silvija Seres

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Culture5GDiversityDeveloping citiesGender balanceLeadership«The perfect storm»

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En LØRN CASE er en kort og praktisk, lett og morsom, innovasjonshistorie. Den er fortalt på 30 minutter, er samtalebasert, og virker like bra som podkast, video eller tekst. Lytt og lær der det passer deg best! Vi dekker 15 tematiske områder om teknologi, innovasjon og ledelse, og 10 perspektiver som gründer, forsker etc. På denne siden kan du lytte, se eller lese gratis, men vi anbefaler deg å registrere deg, slik at vi kan lage personaliserte læringsstier for nettopp deg. Vi vil gjerne hjelpe deg komme i gang og fortsette å drive med livslang læring.

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Utskrift av samtalen: The Perfect Storm

Silvija Seres: Hello and welcome to Lørn. My name is Silvija Seres and this podcast is in collaboration with Telenor. My guest is Sigve Brekke, CEO of Telenor. Welcome.

 

Sigve Brekke: Thank you. 

 

Silvija: I’ve been a friend of Telenor for a long time and think Norwegians should be more proud of Telenor. I hope you will be able to talk about Telenor growth and history. How we got here and why. You’re the biggest mobile company in Asia and one of the biggest in the world. I’m hoping we can talk about the infrastructure investment you’re doing with the network capacity in Norway and other networks. And how you develop your organisation. But firstly, who you are?

Sigve: I grew up in Norway, but almost spent 20 years outside of Norway. 2 years in the US, 4 years in Singapore, 3 years in India and in Thailand. I’ve been fortunate to be a part of Telenors international journey to develop international business. Family with three kids. All of them grew up outside of Norway and living in US, Ireland and Thailand. 

 

Silvija: Now you’re based in Norway, but tell us about the organisation? 

 

Sigve: We’ve 178 million customers, 1.2 are in Norway. It has more than 20 000 employees. 3500 in Norway and almost 20 000 outside of Norway. 

 

Silvija: 3 percent of customers and 7 percent of the employees. 

 

Sigve: The business point of view, the revenues or cash flow, you’ll see that about 20-22 of the revenues and cash flow comes from Norway, and the rest from outside of Norway. We’re becoming an international company or we are. We’re becoming even bigger. 

 

Silvija: You’re revealing your ambitions. 

 

Sigve: We’re moving into Finland and a bigger deal in Asia. It will make us more international than we already are. Measured in customers were among the 10 biggest mobile operators in the world. We believe that already and the future that scale matters a lot if you want to survive in the digital race. 

 

Silvija: Why go international? We have nice little business here in Norway. It’s risky going international, why was it necessary? 

 

Sigve: It’s basically going back 20 years. That’s when Telenor decided that Norway is too small. They saw that this is going to be, sooner or later, a global competition, not a national one. Today we see it clearly. Our competitors are not Telia and Ice. It’s Google, Amazon, Alibaba, the digital platform players. If we want to win in that race you need to scale and to be global. The people in Telenor 20 years ago saw something of this and that being an early adopter of technology gives you the opportunity to take it out in the big world. The way it was done was not through technology, but through a deep market understanding. The purpose of Telenor is connecting you to what matters most, empowering societies. If you break down the purpose it was to take the cognitive part of it, which we knew from Norway since we were an early adopter of technology. But it was more important to take the new part of the statement meaning understanding the customers. I think a few have been able to do it better than Telenor. 

 

Silvija: So understanding what the customers in countries need and will need in the future. 

 

Sigve: What customers in Bangladesh or Myanmar need. At the same time keep a strong position in Norway. The last part of the purpose statement is to empower societies. That is probably the biggest difference. Understanding the importance of being integrated in growing societies. It’s not only about business. It’s about growing societies and economics. Understanding how societies are developing. That’s why it’s not a top of CSR program for us or something we do to be proud of, it’s an integrated part of business. Basically our licence to operate. 

 

Silvija: What was the advantage of being from Norway? You mentioned technology. I think Norwegians are really good in certain parts of technology and ruling it out with empathy for the user. Then the efficiency you learn from having to operate in countries with the price levels of Myanmar, they must have taught you something unique about how you run your servers and networks. 

 

Sigve: That’s the advantage of being present in the Nordic markets which are highly digital and our customers are advantaged. At the time being in markets like Myanmar and Pakistan where you have to make money out of much less contribution from the customers. I.e a customer in Norway today give us approximately 320 kr per customer per month. A customer in Pakistan gives us around 15 kr per month. It’s a fraction of what the Norwegian customer gives. 

 

Silvija: You still have to serve them with bandwidth and minutes. 

 

Sigve: The only way to do it is to implement an extreme costefficent model. So we have to sweat our assets much better which means much better utility equipment and think differently in the way we do marketing. We have to have a more efficient way in running our operations and our organisations. It’s a lot of learning we can take back to Norway. That’s the benefit of being in two different parts of the world. We can take early adaptation of technology in Norway out to this market and take back operational efficient learning. That’s why Telenor is the leader in digitalisation in Europe. The last two years Telenor has been the best performer in telecom, just because we’re able to balance two regions in an efficient way. 

 

Silvija: I understand that the Asian or developing countries' market has a huge penetration of mobile phones. It’s the platforms and too late to catch up and a great time to leapfrog. We see examples with payments systems. Still how do you manage to compete with the incumbent telecoms? What is our edge? 

 

Sigve: It’s three edges. One is that we have a deep understanding of technology. It’s coming from being in the forefront of technological development in the world. The Nordics have been and I claim still are. I.e what we’re testing out on 5G in Norway with three different parts. Two it is the deep market understanding. Deep customer understanding. Being close to the customers. You’ll see that we’ve not standardised that. We’re operating from very different in the got to market in the approach we have in the various markets. But the people we have who are working with the operators are obsessed with the customers being customer centrix. Number three is culture. Culture is the only thing in addition to technology that we take out across. The culture is to take the Scandinavian leadership culture out in the market. Take away the kind of typical hierarchy system you often see in these markets. Take it away and have leaders that are rolling up their sleeves and going out in the market. Have office less organisation buildings. All we know from Scandinavia, being respectful, short distances from the top to the bottom, is something which has given us a competitive advantage. At the end of the day people are people. I’ve found it out during the different cultures I’ve been experiencing. People are People. They liked to be seen, respected, taken on board, taken seriously. If you’re able to engage people in this way you can build competitive advantages. 

 

Silvija: You’re a relational leader. The company hasn't always been led by people who but relations first. It’s important because if you make room for talent from different parts of the world to really contribute with their unique perspective you get further than if you only do the Norwegian superhero, arctic explorer kind of approach. You're the group CEO, Ruza a lady from Montenegro, and I know that men don’t listen to women the same way they do here. It’s important to create a culture for talent to grow. 

 

Sigve: When you start to do it it’s building diverse teams. Telenor has been criticized for not being diverse enough. Unfortunately we’ve not been able to really disclose what we’re doing now. I’m quite proud of the way we are using diversity to build those teams you’re referring to, but also to bring up talents. I.e in my group in my management team today you’ve 33 per cent female, 4 different nationalities. You’ll have age diversity and definitely competence diversity. This is more and more important in the type of business we have. If you’re not able to have these diverse teams you’ll not be able to move fast enough, to build teams strong enough and create it in a watty(?) spirit. 

 

Silvija: I also think it’s important for every individual, not only on a group level. One of the things I enjoyed when listening to you recently, that’s when I thought we really has to do this podcast, you were talking about network technology. You’re originally not a tech person, but you’re showing huge interest and skills in how they work and why are we competitive. We’re talking about networks, edge computing, IOT, concrete projects and 5G. The top management are the management realising that technology is their business as well. They’re getting the techy people to understand that business is a part of their responsibility. Getting cross functional diversity at every level is going to be key for growth. 

 

Sigve: Yes. It starts with, referring to our mission, where we say connecting you. Spend some time on the connecting part of it. Because sometimes I meet people saying that technology is not a competitive factor anymore. Everyone has it. Cognitive is a dump pipe, it’s a utility, everyone can do it. But we don’t believe it in Telenor. We believe that having a cognitive platform is going to be more important in the future where everyone and everything will be connected. That’s why we invest in quality technology platforms. Being fixed and mobile. That’s why our digital journey is not to buy into some new and fancy business concepts. It’s more to digitise the core business they have. To digitalise our networks, IT-infrastructure to use software based platforms. To lift our data traffic in the cloud. This is the main digitalisation journey that we’re a part of. To be able to do it you need to have a basic understanding of technology. It doesn't matter where you are in the organisation because you need to understand how technology is driving your business and how technology has the power to disrupt everything you do. What keeps me awake at night is to think about all the technology that we historically have had in our value chain, how it can be disrupted. How can we set up a defence against it. That's why we’re disrupting ourselves with technology. We’re setting up small startups trying to figure what you would do if you’d like to eat into our cake and let them try the technology. Challenge our technology people and understanding our business. To me technology it’s not what it used to be, it’s nothing that the nerds thing. It’s something that the top management has to have an understanding of. 

 

Silvija: Top management has to become a bit nerdy as well. I think that you’re in a good position because, the same way microsoft have found  a new, clear sharp roll with the cloud, cognitive and Telenor can be an unique, world leading perhaps, position.You’ve have Ericsson, San Francisco and Nokia, but none of these have access to the markets at the same level as you. Especially with IOT and the new and safe networks. I love the example you gave with how you try to roll this out with concrete projects in Trondheim. You recently launched 5G-pilot project there. Can you tell us about it. 

 

Sigve: We’ve three 5G pilots in Norway now. In Trondheim, Elverum and Kongsberg. Where is it coming from? We believe that the digital storm has just started. We think that when you get the combination of 5G technology which is basically going to connect a lot more industry applications in to data with AI and IOT. When these three technology components come together it’s creating a perfect storm. 

 

Silvija: AI artificial intelligence and IOT internet of things. 

 

Sigve: When it comes together, and everything and everything is connected, not only connected but a huge amount of data is being put into computers through AI. Then you’ll see endless opportunities, but also endless threats coming out. You’ll see new businesses established and replacing business, but also see existing businesses growing on top of new areas. We’re testing out how we can use the three components of the perfect storm. Together with partners create opportunities. The pilot we’re testing is how mobile technology can replace fixed technology. You don’t have to have fixed fiber into your home. You can sit in your living room watching TV through a wireless connection. That’s one thing we’re testing. We’re testing if we together with the fish farming industry in Norway take the fish farm in the sea and increase the production level. 

 

Silvija: Why would you want to do it? 

 

Sigve: Because we want to connect the fish farm and increase the production of salmons in Norway. We’re a part of the solution. 

 

Silvija: If it’s farmed out it’s less contagious with parasites.

Sigve: It's a lesser chance for the salmon to be sick and you can have much larger production facilities, and increase the volume. 

 

Silvija: An offshore production. 

 

Sigve: The example from Trondheim or Bodø. Bodø city is building a new airport. It’s going to be close to the city center. The city wants to integrate the airport into the city and the other way around. We’re a part of the project if we can digitise an entire city and airport, and integrate those two. 

 

Silvija: And in connecting the traffic flows?

Sigve: Yes, Chinese tourists landing at the airport taxis should be there with Chinese signs. The vision of Bodø kommune is to transport the luggage of the customer from the airport with a drone through Hurtigruta while they are sightseeing in the city. There’s a lot of opportunities. Again it’s a partnership. A third example is to work together with emergency services in Norway. How can we make it more secure and efficient? These are examples on how we can be a part of making products and services in the private sector and even more in the public sector. More convenient, efficient and make money out of it. 

 

Silvija: There isn’t a new revolution. It’s been a revolution that has snuck up on us through growth and computational power, data and network capacity. You’re driving network capacity growth and IOT are giving you a new explosion of data. AI, machine learning and new tools for modeling are giving you a kind of computational power. These three are perfectly positioned for understanding the new digitally enabled cyber world of tomorrow. You’ve to do it in a safe way. 

 

Sigve: You’re correct. The three elements are not new. But the new thing is that it’ll be much larger volume of data coming from these. Which makes data computing and AI much more useful. 5G is going to give you network cognitivity which will enable you to do much more than you currently do. The reason I’m calling it a perfect storm is not because it’s new, but the combination and the volume of data is going to open a completely new road. To the safe part of this. We believe that trust is going to be more important than today. Your data is trusted and being used in a trusted way. Not only personal data, but things data are being used and cybersecurity. The danger of it being attacked. That’s going to be an important part of what we’ll do. That’s why I’m thinking about selling security as a service. The capacity that Telenor has, we can offer that as our services. Protected services to smaller businesses. 

 

Silvija: A part will be security and another part will be ethics. 

 

Sigve: It’s an important part. We’ve been arguing with the Norwegian government. We would like them to have more ambition on the AI part. We think this is the government in the public sector's responsibility too. But is has to be developed ethical rules on how we use health data or how far do you let the machine decide before you need a human intervention. It’s a lot of ethical dilemmas which has not been sorted out yet. 

 

Silvija: The big mega monopolies from Silicon Valley, brilliant in many ways, but are centralised in the way they think how they services should act in different societies. They don’t want to customize per country. This is what it is and how you maintain versions etc. I think Telenor has a trust and cultural sensitivity in many countries, almost per country. You’ve to be trained in their own values in order to build your business there. It’ll be extremely important when we try to apply the ethics to our tools because they will be local and always be sensitive to local values. 

 

Sigve: I agree. First of all, these companies don’t want to be licensed or regulated. That’s why cognitivity is important in the future. We are revealed and licensed. We’re nationally regulated. On the cognitivity part we don’t think they’ll compete with us. The other part is the security and understanding the local customers. We think we could compete there. Rather than looking at the as competitors, we’re looking at them as partners. How we can do things together. In the past we’re in control of the customer's products when we had voice and sms. Now we won’t be able to do it anymore, so we want to work together with them with the products and services. Not meaning we’re only cognitivity, but also there in the service layer. The future is cooperation modeling. 

 

Silvija: Can we talk about women in Telenor? How do you work with making women be attracted to technology, telecom and Telenor? 

 

Sigve: I’m proud that we have a technology woman in the group projecting management. We also have a head of technology in Telenor Norway who’s a woman. It’s not that women don’t want to go into tech. I don’t recognize it. It starts from the top. It needs to be important for me and to be important to bring a gender balance. We have 150 top leaders in Telenor, the ones in the management teams in all the different business units we have, I will go through them together with the head of people to make sure that every candidate in the pool has to be one of each gender. It starts from the top, then it has to be systematically done. You need to have targets. Lastly you need to do something with a requirement. I’m optimistic that you’ll see more women coming into tech. 

 

Silvija: I’ve spoken with some of your good female leaders that have concrete projects in technology. Firstly, they’re nice role models. They’re not women trying to be superheroes, but normal and kind women with families that struggle with making time for everything. I asked them “why do you want to go into technology?” and they said “because that’s how you change the world. I think that’s how you solve the most important problems in the future”. We become much better at communicating technology. Not only as a cool tool, but as an important tool. Again, we’re coming to a cross functional side of things were you dont only talk about megabytes, but talk about how this will create new business and change lives. That’s attractive to women.

 

Sigve: I agree. I go back to the perfect storm. We’ve a woman that is leading technology. The 5G part of it. A woman that lead the AI effort and you spoke with her, Astrid. We’ve a woman that leads IOT in Norway. All of them are attracted to what you said. Using technology to make the world a better place to be. 

 

Silvija: Do you have a quote?

Sigve: Not really a quote. But the challenge and inspiration is that the destination is not known anymore. In the past we knew where we were going. Now you don’t know. Know it’s about picking out a direction and then try to have flexibility to adjust when the circles are changing. that’s the biggest challenge we and most businesses have in the digital future. 

 

Silvija: I agree. It’s difficult because we’ve been trained as good leaders to pick a goal and target. Pick some numbers you’re going to deliver on in a certain time frame. If you’d it we’ll love you. Picking a direction is much more difficult to measure. 

 

Sigve: And much more difficult to explain and get people to buy in to. 

 

Silvija: That’s why you need to be a good storyteller and why it’s valued and visualed driven. Good luck with that. Telenor is in a very exciting time and place. It’s a huge success story from tiny, little Norway. We should all be proud of it and figure out how to do more. Sigve Brekke, CEO of Telenor, thank you for inspiring us about the future of telecommunications. 

 

Sigve: Thank you. 

 

Silvija: Thank you for listening. 

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