Simon Moutter has just wrapped up a seven-year tenure at Spark, where the changes the company has gone through under his reign are nothing short of radical. From its name change (Telecom to Spark) and its operating model (traditional to agile), to its culture (publically called out to inclusive) and its structure (monopoly brand to many). Elly Strang sat down with Moutter had a candid chat about his journey to CEO and how one of his biggest lessons was he couldn’t solve a culture issue with process and strategy.
In a sky-high office overlooking Auckland’s CBD, a jubilant Simon Moutter is counting down his final days at Spark. Unlike other frazzled bosses I’ve observed in their final weeks on the job, Moutter’s belongings are neatly packed in boxes, the meeting table is free of any clutter, and his cheerful mood seems impenetrable.
It’s the office of someone who knows now is the right time to exit stage left and let a new leader emerge from the wings, and he says as much. Moutter will be replaced by Jolie Hodson, who joined the company in 2013. She was formerly the CEO of Spark’s digital unit, its chief financial officer and most recently, its customer director.
“When I left in 2008, I left with a sense we’d lost our way with the public. The company was doing well enough, but New Zealanders had fallen out of love with Telecom over many years and it felt like unfinished business. It wasn’t the right way to leave,” Moutter says.
“When I came back in 2012, it was with the sense of that we could turn that around, and the language I use is to make Spark part of the solution, rather than the problem. You define that by having a company that is a strong brand, a strong customer base who are happy with the company’s performance and encourage it to carry on, a great workforce who has learned to win and innovate, and are generating the kind of financial performance that creates sustainable, strong shareholder returns and therefore, the willingness to invest in heavily.
“Here we are in 2019 with all of the trends running with us: positive brands, absolutely outstanding infrastructure, a workforce who are going for it, a lot of innovation on all sorts of fronts, all sorts of new businesses – so to me, it is job done.”
Moutter says while his skills and talents were right for seeing Spark through an intense period of change, Hodson is the right person to steer the company in 2019.
“The talents and skills Jolie has and the team she’s building around her are different from the team that I need through those years: they’re more digital, they’re younger, they’re more collaborative in style and so as a leader, you say it’s the right thing to do, step aside at the right time and let a new team carry on.”
Spark’s corporate office in Auckland’s CBD
Moutter first took up a role at Spark from 1999 to 2008 under previous CEOs Theresa Gattung and Paul Reynolds, before leaving to take a chief executive role at Auckland International Airport from 2008 to 2012.
He returned to the beleaguered Telecom in 2012 to transform the company and “win the future”. Patrick Smellie described the uphill battle he had ahead of him in a cover story for Idealog in 2014 called Can a corporate behemoth find that winning Spark?
“Unloved since privatisation in 1990, the telephonic behemoth hid for some years behind Spot the loveable dog, underperformed as a share, and took terrible hits from the Labour Government in the mid-2000s, when none other than Telecommunications Minister David Cunliffe had a gutsful of the way Telecom maintained its dominance. For years, it endured being described as a monopoly, even as a host of new services, all of them attracting competitors, appeared on the scene,” Smellie wrote.
So, in 2019, does Moutter think Spark has succeeded in winning the love of the public? Kind of.
He says while there is still plenty of people who are not enamoured with the Spark brands, its more diverse portfolio, which now includes Skinny, Lightbox, Qrious and Revera, has won a larger demographic over. Its power play over Sky by purchasing the rights to the 2019 Rugby World Cup for Spark Sport is yet to unfold.
“The problem with the Telecom brand by 2012 was it was marginalised to a wealthier, whiter, more business orientated customer group, so we didn’t have much engagement with younger people – anyone under the age of 35 wasn’t inclined to be with Telecom,” Moutter says.
“Today, the appeal of Spark and other brands like Skinny have widened that appeal, we have something for everyone – but it doesn’t mean everyone loves us.”
The agile model in action at Spark
Spark also was one of the first corporates here to embrace the agile structure of working, a structure formed by a group of software developers in 2001 to allow organisations to quickly navigate change. Lots of big companies in New Zealand embraced agile units, but full-scale adoption was a bold call by the company.
“We had to create an academy to train coaches for agile, we had to build bootcamps and a way of teaching thousands of people to do agile at scale,” Moutter says.
“Agile didn’t exist in the formal way before we did it here, so the people we had to bring in expensive, international people to train the trainers. Once we embedded that into the talent pool, they move to other companies and which spurs others on. You’re laying foundations and building capability that encourages and enables more change [in the business ecosystem].”
The deeper change
Spark’s #thankstoyou campaign
Though structural changes to the company have been carried out at Spark over the last decade, one of the biggest transformations that took place at the company was an overhaul of its culture of diversity and inclusion.
There is a lesson that Moutter took too long to learn, he says: culture can’t be created or designed out of processes and ticking boxes. As hard as the company was working towards greater diversity, Spark lost four of its senior women from the organisation in 2017, which led him to believe something wasn’t right.
A report into the issue uncovered that the company wasn’t as inclusive as it thought it was, and many considered the processes in place for inclusion to be just lip service. This culminated in Moutter’s “uncomfortable truths” speech in 2017 at the Global Women 1 Day for Change summit, where he publicly acknowledged where Spark had gone wrong as he fought back tears.
“It took me over a year and a half to stop tearing up just talking about it, even way after because I felt I had let people down,” Moutter says. “I thought, ‘Wow I was drinking my own kool-aid’ and taking my mind-led, metric-led approach thinking we’re doing good on inclusion and diversity, when I didn’t realise it was anywhere near as wrong as it was.”
“My conventional wisdom was, ‘I’ve got a problem, I should have a strategy and set of initiatives and then dish out 100 action points to get that delivered’. That would’ve been a conventional, hierarchal manager’s approach, especially as an engineer, that’s how we do things. An issue about culture and people where it’s not mathematical – that often moves you a long way out of your comfort zone, because you’ve got to broaden your view.”
But the company has since come a long way since that moment of truth. Moutter says though his speech was focused on gender, it lifted the cover off the issue of diversity and inclusion within Spark in a range of areas, such as ethnicity, sexuality, religion, and gender.
Traditional routes and processes such as strategies and access points were discarded in favour of a movement by the people, for the people, and Spark experienced an explosion of inclusivity, he says.
This resulted in Spark and Colenso BBDO’s 2018 campaign featuring same-sex couple Chris Paul Hunter and Marc Hobson with their young son Lucas David Hunter-Hobson at home in Christchurch, illustrating a rainbow family growing up in a supportive and loving environment.
But what you may not know is Moutter saw the ad for the first time like many other New Zealanders experienced it: at home, while watching broadcast television.
“I was home on a Friday night, oddly watching broadcast TV – I almost never do that in this world of streaming – and I saw this ad come on for a same-sex couple and thought, ‘This is edgy, I wonder who this is?’ Then the voiceover came and I thought, ‘That’s the voice we use on our ads’ then at the end, up comes the Spark logo,” he says.
“What blew me away was a group of staff – no managers, my other leaders didn’t know about it either – our people felt sufficiently empowered to produce a controversial advertisement like that, and run it without asking for permission. That was amazing.
I could tell you before any of this [the uncomfortable truths speech], that would’ve never happened. Someone would’ve thought of it and then said ‘No, they’ll never go for that’. It would’ve died as an idea. Then the social media team took over all the critics and took a very values-based view to people who were being bigoted and nasty, saying, ‘If you don’t pull it, we’re leaving and taking our business elsewhere’. They said, ‘Okay, goodbye then.’ That was also provocative but you’ve got to make a stand: these are your values, and they’ve got to show up and be reflected internally and externally.”
This has also resulted in other changes: the rise of te reo Māori being used within Spark and Māori culture being embedded into its values, such as a kapa haka group, Samoan song groups, Indian and Muslim communities coming together within its workplace, and more.
“The only thing I did was be willing to be brave and go public and make a commitment publicly to resolve it and explain where the problem was,” Moutter says. “It enabled the amazing people at Spark to take control of the agenda.”
Building the foundations
Designer Wardrobe founder Donielle Brooke
As far as the New Zealand business ecosystem goes, Moutter says companies like Spark lay the foundations for smaller players to build up out of. He says part of the give back element of these businesses is building capability within this local environment.
“We’re a little island nation on the bottom of the planet and the odds are stacked against us in a digital world, so you need large companies who are successful to lay the foundations where small companies like Designer Wardrobe [a company Moutter has invested in]can flourish on top of, but could never create the infrastructure.”
He says while New Zealand should be proud of the progress it’s making, it should also always be hungry for more and aware of the threat posed by global businesses.
“The value in the world is shifting to data and digital assets. That’s very clear in the five biggest companies in the world, who are all digital businesses. Last century, the most valuable companies were massive brands or bricks-and-mortar organisations – the firms that owned Walmarts, oil companies, and the telcos when they were monopolies.”
He gives the example of Lightbox beating Netflix to market as New Zealand’s first streaming service by nine months.
“We had a really great content line-up because at the time, there was no other content streaming service, so we were able to buy everything including Netflix’s own shows,” Moutter says.
“Netflix came in about nine months after us with much less of a content library, but they passed our traffic volume in one day. That shows a global brand with great technical capability will run over the top of companies here. In New Zealand, we’re fighting against this.
“We should be restless and concerned because as value goes to digital it tends to these big scale players and a lot of these are winner-takes-all markets like Facebook. You have to be careful in New Zealand, as we’re small, and even when we’re really good, we’re still small.”
But despite this, Moutter reckons companies here with large profits should be more inclined to take risks, as we tend to err on the side of caution.
“You don’t have to bet the farm, but you can bet the back paddock and it isn’t fatal if you get it wrong. A lot of big, successful businesses could do more with their money in the innovation space,” Moutter says. “We’ve had many successes, but we’ve also had ventures that didn’t work and we called them and shut them down.”
Another thing that he’d like to see change is prevailing attitudes towards failure, he says.
“In New Zealand, if you’ve failed at your last venture, you’re out of work. That’s wrong. You’ve got to solve the way we create safety people to take risks. I think it is about being committed to learning from failure rather than criticising failure is the simple solution. Just because a person failed doesn’t mean they’re hopeless, it just means this time, they were wrong. It’s quite the reverse – they’re going to better next time.”
The next venture
While there has been ample speculation as to what Moutter’s next move will be – with companies that have recently had CEOs step down, such as Air New Zealand and ANZ, being thrown around next to his name in the media – Moutter’s current plan is simple: to do nothing.
All he has on the agenda is to holiday in Europe on holiday with his family, which is a welcomed opportunity after many years at the helm of a busy executive role.
“I’d just like to free my mind up a bit before I anchor in on what I do next,” Moutter says. “I don’t feel as though I’m finished as a hands-on executive, but I’m very open to what options there are to move forward, including doing my own thing, versus working for someone else.”
Whatever he does next, Moutter can leave knowing that financials aside, if Spark’s culture changes are anything to by, the once-faceless telco now has a much more human front.