Driving innovation at the speed of life

From a humble upbringing on a farm in Missouri to the technology chief at telecoms giant BT, Matt Bross has sure come a long way. He says he still pinches himself at having one of the “coolest” jobs in the world as CTO of BT Group and CEO of BT Innovate, Gerhart Trüb discovers during a delve into group’s technology operations.

“I think that I understand the value of people in this equation. My management philosophy is that if you take care of people, they will take care of business because people make things work”
-Matt Bross

CXO. BT’s 21st Century Network (21CN) is one of biggest IT programme in the world, transferring the telephone network over to an IP system. What has 21CN achieved so far and what savings will be realised?
Matt Bross. 21CN is a large, ambitious programme to simplify the multiple networks into a single global IP infrastructure. The program has, in economic terms, delivered in excess of UK£600 million in cost reductions against a UK£1 billion target. I believe we have the largest Ethernet footprint within the UK on that infrastructure. We’ve rebuilt the entire core infrastructure in the UK around high capacity dense wave, division multiplexing and switching technology that enables the on ramping of the explosion in wireless data and explosion of broadband traffic as we begin the next chapter. This is which is the deployment of super fast broadband on fibre optic cables out to the street furniture within the UK. The 21CN network operates across 170 countries throughout the world so the benefits in terms of our broadband profile delivering 24MB broadband across a huge swath of the UK, the biggest Ethernet footprint in the UK, and a set of new services. So it has enabled core cost reductions and new services introduced within the UK.

It creates a fabulous social network of the small to medium size community in the UK and it’s a way we’re moving from closed innovation where BT would have had to invent every product, service, and application, to an open innovation model has really benefited our customers, our shareholders, and participated more widely in the innovations that are taking place globally. So 21CN has enabled the core cost reductions, the faster drumbeat of new services introduced within the UK and globally, and that’s a specific insight into one of the market areas around the small to medium-sizes enterprise where you can see just the market difference from the old approach to the new approach.

CXO. What role do you play in the evolution of 21CN today?
MB. 21CN has moved to becoming an operational program, with the continued rollout and delivery sitting with my colleagues in BT Design. My energies are put into ensuring that we leverage up that investment for the benefit of our customers, employees and shareholders. We look to prepare BT for the future by generating and articulating clearly the revenue generation, cost reduction and customer experience enhancement propositions whilst doing thus on the super fast broadband infrastructure that we’re delivering. This is where my focus is now because the delivery of 21CN is squarely in the hands of the operating groups. First you innovate it, then you design it and then you operate it.

CXO. How important is innovation for a giant telecoms group like BT?
MB. BT has always been an innovative company but in this time space we have had to innovate the way we innovate. We have had to change innovation at its core, being the best at doing internal R&D to open innovation, moving from a company that was focused on technological innovation to a company that’s focused on innovation and the experience that we drive, a company that was looking at only long-term type trends to much more dynamic innovation planning cycles. I call it a move from ‘blue sky approach’ of innovation to purpose-driven innovation where what you’re doing, even if it’s in the mid- or longer-term research programmes, you can tie it back to core questions that will really get people in the business motivated.

As we look globally, there’s less and less capital right now certainly to spread around and the need to collaborate in innovation is of paramount importance. We’ve scanned over 460 start-up companies this year for innovative ideas and collaboration ideas but by bringing innovation into the company it lowers the cost of that innovation and can ensure that it’s much more relevant to the customers. So in a way I think of what we’re doing is unleashing innovation beyond the boundaries of the payroll of BT and being able to ensure that there’s not a gap between what’s possible out there and what we deliver to the markets that we choose to serve. And because we’re leveraging up the investment that BT’s doing internally and we’re seeing globally and putting those two together through our open innovation and getting it to customers, this will be the lifeblood of successful companies as we come out of this downturn.

CXO. People often sill have this mental image of BT as fixed line telephone company, but this couldn’t be further from the truth. How would you say that BT has grown and evolved since you joined in 2002?
MB. BT has gone through a series of transformations from 2002. Back then there was massive debt on the balance sheet and ‘deleveraging’ the balance sheet to create oxygen for the transformation was one of the first jobs. But if you look at the transformations, we’ve gone from a predominantly narrow band company to a broadband company. I think we actually just clocked over 10 million broadband subscribers from a base that was measured in tens of thousands in 2000.

We have gone from a telco to a global network and IT services company that is trusted with the largest most critical infrastructures for companies around the world, whether it is Reuters, Unilever, MasterCard, Coca-Cola, Pepsi, and so on. We have gained significant trust and credibility. With the transformation from a telco to a global network and IT services company, we’ve booked about UK£8.3 billion pounds of new contract value in the last 12 months.

I think the current transformation really is around becoming a global innovation platform as opposed to a global network, one where our customers can successfully address the global marketplace on a variable cost basis and do it faster than they could otherwise themselves. And this is driving us to move from network and IT company to a ‘softco’ where the platforms that underpin what we do are much more ‘real-time’, are much more agile.

An example of that would be one of the recent acquisitions where we acquired Ribbit out of the West Coast, which is kind of billed as Silicon Valley’s first telco. In this we can actually begin to embed communications into the workflow. Instead of network services being a big infrastructure like a PSTN (Public Switch Telephone Network) or like a frame relay network, you start to embed communication and messaging into the workflows of companies. And this is really the transformation that we’re undergoing right now and we’ve worked to significantly transform the innovation agenda of the company from a closed innovation model to an open innovation model. This where open innovation, in my judgment, is defined as BT’s organisational capability to find innovation globally, bring it back and fuse it together with the best of the men and women inside of BT. Then using our innovation platform, get it in front of customers faster than ever before.

You are so correct that BT has gone through a significant transformation and in some ways outside of the U.K., if you look at our global services customer survey, for the better part of last year the number one or number two message from our global services customer base is that we are an innovative company and that’s delivering network and IT services globally. So it is a vastly different business than the recent past and certainly when I joined.

CXO. In the past you described life at BT as “one of the coolest jobs in on the planet”. Do you still feel this to be the case?
MB. Absolutely. Pretty much every day I pinch myself that I should be serving a company like BT as the CEO of innovation and as the chief technology officer because this is quite a venerable organisation when it comes to technology. If you looked at the range of opportunities I have, my passion is less fuelled from technology but it’s more from what I call driving innovation at the speed of life. I believe that things exist in the domain of invention, and they may be very important inventions until they cross a threshold and that threshold actually is a pretty bright line. They then become innovations when they are enhancing the quality of people’s lives or the success of business. That’s when it becomes an innovation.

And for me, as we deploy the significant sums of investment that we do at BT, if we can strive to innovate at the speed of people’s life as opposed to at the speed of technology, we take on a higher purpose and create more of what is relevant in the daily lives of our customers. So I really love the range of things I get to learn and understand – from the nano-sciences all the way through the most advanced applications of social networking. Who wouldn’t have fun?

CXO. You appear to be passionate about your role. Are very much a hands on technology chief?
MB. I think that I understand the value of people in this equation. My management style if be that if you take care of people, they will take care of business because people make things work. My absolute passion is around helping innovation and the talent that we have – that’s not rhetoric. When it comes to m y management style, people who know me would say that I understand at quite a deep level how things work but I’m also very comfortable with trusting the people that we put in place to do the analysis, to do the design engineering architecture and get on with it.

Matt Bross on his role
“I continue to serve as the group Chief Technology Officer but have taken on the accountability as CEO of BT Innovate, which carries two primary accountabilities. One is engaging in the communities within BT where BT works and operates to stimulate innovation in those communities, and second is with our customers – engaging them in a very direct way to help them innovate within their businesses more effectively, innovate within the ecosystems that they operate, and extract more out of the relationship with BT itself from the innovation agenda.

“Internally, I think of it as really restocking the shelves for our market-facing units and other operating groups in the areas of new revenue generation, cost reduction, and customer experience opportunities. It’s about taking the idea generation coming from multiple sources and driving it into well-articulated propositions that those market-facing units can use to drive the financial performance and the customer experience that they intend to put into the marketplace. It’s about making sure that we’re prepared for the future with the right kind of revenue generation, cost reduction, and customer experience enhancement agenda. At BT Innovate we’ve probably had three customer engagements every day of the year last year.”