Mr Technology: Roel Louwhoff

BT Operate’s Dutch CEO Roel Louwhoff tells BMEU about the strategic reorganisation of a firm that services 170 countries, and overseeing the management of 17,000 global employees.

Roel Louwhoff, CEO of BT Operate, is a very personable chap. A Dutchman who got his MBA in the Netherlands, Louwhoff worked for Accenture for a number of years, covering international change management processes. He then took up employment with an international BPO organisation called Client Logic. His career has covered all aspects of international business, but his experience in dealing with the customer experience made him a prime candidate for his current role. We meet in the conference room of a hotel in Kensington, London. It’s an unusually warm day in London, so I pour iced water for us as we begin our discussion.

BT changed its organisational structure at group level in July last year, with a vision of transforming into an organisation that wasn’t managing the services of its customers from many different entities. “From market facing units, from an IT organisation, and having some network elements, we needed to organise ourselves end-to-end for our customers so they got a seamless service,” explains Louwhoff. “Whether that service be consulting, network elements, a complete network, IT applications or IT outsourcing. Whatever they wanted, it wouldn’t matter. There should only be one single organisation that they deal with.” It was at that moment that BT Operate and BT Design were launched (BT Design was the organisation discussed in some detail by Al-Noor Ramji in our CXO magazine three issues ago)

BT Operate accumulated all of the operational activities – processes, IT, data centre, networks and so on – from across the globe into just one singular organisation. Louwhoff describes how the company “lifted and shifted” these parts from all its different units, and moved to a service organisation. BT’s movement to in-life management – when networks and IT are integrated – is widely recognised as the first successful operation of this kind at such a large scale.

The benefits to integrating these two to a single platform are clear. The application or IT side and the network side are running as an integrated session, meaning there is only one set of people dealing with all of these activities; so if there is an incident, it can be dealt with swiftly. “This is because software is the key,” Louwhoff tells me, smiling, as he leans back in his chair. “Software is running on networks predominantly, specifically when you move to 21CN networks, when you move to IT networks, and it's also software that is running IT and applications. So why not truly integrate it into a single platform? Of course, that has big implications for our customers, for our processes, and for the applications that we need to service all of this.”

When I ask him about the most exciting part of the project, it’s clear that to Louwhoff, it’s the sheer scale of the undertaking that engaged him so much. Although its name suggests otherwise, BT actually services 170 countries and has operations in 56 of those. To bring cultures together from 56 countries in one global organisation is big enough, he tells me, but then to split them into the four separate entities where all of these people come from and build that into one unit with one operational mentality and way of working is “quite a challenge.” One suspects he is being modest about what was a mammoth task.

To tackle this issue of trying to have a global workforce working towards a common goal, Louwhoff and his management team decided to travel to meet all their employees, to ensure they understood the company’s vision, but also to make sure they understood what it meant to be working together. Either Louwhoff himself or one of the people in his direct management team met with the organisation’s 17,000 global employees over the course of two months. “We wanted to keep it simple,” he explains, “and so only had seven slides to form the basis of discussing what our strategy was. We moved on from there and had a discussion with the regional managers for a whole day, making sure we understood what their issues were, making sure they understood what we were driving for, and rallied everyone behind what we wanted to do.”

It is an invaluable experience for any business leader to be able to meet with his employees – those at the ground level – as it is their local knowledge and expertise that the C-suite can lose track of when an organisation is as large as BT. That’s why Louwhoff was so pleased with the results of his 50-odd meetings with his global staff. “It’s so important to listen to your staff,” he states adamantly. “We spent half of the day at these meetings in small focus groups, just listening to our employees so we could fully understand. You know, things like, “All right, so what's going on here? What isn't working? What is working really well? What do we need help on?” Because of course, people at the ground level always understand when things that are implemented from above aren’t working.

“We learned a lot, and my team discusses its learnings on a weekly basis; what did the people bring up, do they want recognition when they get results, do they want an internal website, and so on. Our weekly meeting covers who is working on what, which issues we’ve covered, which we have yet to resolve and making sure we take the lessons that are deployed locally. For instance, there was a great security measure we discovered in Sydney, Australia, concerned with how we secure our buildings in a cost effective but efficient manner. It might not sound like much, but if you're operating in 55 countries and have more then 10 buildings in some countries, it adds up.” BT deployed this security measure worldwide, with considerable effect.

The entire meet-and-greet project, he tells me proudly, was a huge success.

Management objectives

As if that wasn’t enough, Louwhoff has also been covering other areas of management strategy. As risk management and green IT are buzzwords in today’s industry, I ask him whether BT Operate is looking at those. “Risk management and the green agenda are actually things which I would call business as usual for BT, because they have been on the agenda for some time. BT has won prizes and acclaim for our ‘green’ activities – we’re not there yet, by any means, but we’re driving it forwards. We have a risk management process and structure, which is a bimonthly discussion with my unit on where we see risk. It could be internal risk, operational risk, external risk; we try to scale it.”

But while risk management and green issues are definitely a part of Louwhoff’s agenda, there’s a more recent issue that is commanding his attention at the moment: energy costs. Many in the industry have been flabbergasted at the accelerated and extreme rise in these costs, which, compared to the same period last year, have increased by 140%. Louwhoff thinks that is likely to double or even triple over the next couple of years. The exposure to a company like BT is enormous, as with all large players in the IT and telecoms game.

When asked what BT is doing to tackle this new problem, Louwhoff leans forwards, thinking deeply. “Everybody needs to understand what this means for their bottom line – that's where the business sense comes in; also they need to understand how they can mitigate against it, which BT does at two levels. One is we trade, trying to understand what prices will be, and coming to deals with energy suppliers for a longer period in advance so the risk is reduced. Secondly, we have programs in place to ensure our level of energy take is reduced.” This could mean on a personal basis or in whole buildings, but also equipment that is used and processes that BT drives.

A tougher business environment

With energy accelerating the way it is, it has to come higher on management’s agenda, as it impacts the business and impacts margins. The conversation turns to a more general discussion of the global downturn in the economy. “I'm still not sure whether this downturn will have a massive impact on BT at a global level, because if as an organisation you are global and in more industries it makes you more resilient. However, when I talk to my customers and peers, there is an absolute increasing worry of where this downturn will take us. No longer are discussions about “Are we in a recession?” Instead, it is “How big, and how long will it take to get out of it?” I think to some degree, there's still a denial,” says Louwhoff.

From an operational perspective, BT has taken the position that the global downturn will take a long time to recover from, and is organising itself around this. There is no discussion about whether it is a crisis or not, the ethos instead being that if you prepare for the worst, then whether it manifests itself or not, you will be covered.

Four years ago, Louwhoff experienced many similar discussions to the ones that are going on today: cost reduction, innovation aimed at reducing costs or doing things completely differently. “That’s why there's a big uptake in terms of managed services, outsourcing, where the risk is shifting towards the outsourcer instead of having a fixed price for the people that used to handle those activities. It’s more a case of transaction pricing that is coming in, which has been in discussion for some time. If you look closely at it, it’s not well implemented everywhere yet. I see a lot of change in that area. It will move to complete transaction pricing where the risk will be bourn by the outsourcer,” he adds.

A downturn in any economy is often a good time for some companies to work on new projects. “Apple is a good example of this,” Louwhoff tells me. “When Apple came out with the iPod, it was their life saver. If they hadn’t had it, I don't know what would have happened to Apple, to be honest. So their idea was to do something differently, shift the paradigms. That comes back to my point about cost; I think that over the next few years we’ll see a lot of the innovation around cost. At some point you can also probably come out with new products or services based on that, which will help the top line. It starts with the thing that we can influence – because we can't influence the markets.”

Global perspective

His working career has taken Louwhoff to a number of different countries. His own personal situation – he is a Dutchman working primarily in the UK, but also globally – means he has a deep knowledge of the way that different countries operate at a senior level. “The more you get to higher level managing positions, that’s where it starts to become interesting. It seems to be that cultures have become closer together at this level. Everyone speaks the same language, everyone talks about business, the latest books, and the newest hypes and how you manage things. Everyone seems to go through the same business schools – Harvard, Stanford, NCS.” He smiles and gestures with his hands: “At least, that’s how it seems.”

“The interesting thing for me is that I am not sure that this assumption is totally correct. If you just assume that everyone you do business with has a common understanding of business just because they use the same language and went to the same business school as you, then I suspect you’ll miss an awful lot. You should never assume that everyone is at the same level in terms of how they experience the environment, how they experience business. This also covers simple things like what food you eat together at business lunches, what restaurants you go to, how do you eat, these kinds of things. The world is coming closer together, but it would be completely wrong to assume it is so close that it doesn't matter how you act or what you do. That's not the case. You need to act global to be a global company, but to be successful, you need to take local aspects into consideration to drive forward.”

Being a global business with local outlook is something that Louwhoff prides BT Operate on. There are strict regulations in force in the telecoms industry worldwide, the level of which differs in every country. There is another element that he points to as being an aspect of a global business, which is, “if you want to roll out an organisational change or a change in procedures for your people, it’s completely different in most countries. Labour laws are much more detailed and precise in Germany that in the UK, for example. There are certain processes and procedures that are different. If you want to do things fast, sometimes local country laws will prohibit you from achieving what you have set out to achieve. I’m not even talking about regulation, just the normal rules that govern labour from country to country.”

He even has advice for other global players on how to approach their operating environment. “Operating in an international business makes you understand that the world is not one place. You need to develop this global philosophy, but make sure it’s delivering the local results by understanding the local rules and regulations, and the cultural element. Once you’re able to sort those things and put them into balance, I think only then can you really excel.”

As BT Operate’s Chief Executive Officer, Roel Louwhoff is responsible for the efficient running of communications across BT’s core global networks and systems creating consistency, improving reliability and reducing costs. He moved into BT Operate from his role as President of Customer Service for BT Global Services, where he was responsible for BT’s global network and customer experience throughout Europe, Asia-Pacific and the Americas. He has an MBA from the Rijksuniversiteit Groningen in the Netherlands and completed the Advanced Management Program at Harvard Business School.