The Australian’s telco writer Michael Sainsbury landed a good scoop yesterday revealing that Telstra paid global consultants Bain & Co a staggering $54 million to work up Sol Trujillo’s transformation strategy. And he’s followed it up today with another front page effort alleging that this hugely expensive strategy was already in the works when Sol arrived at Telstra.
It’s pretty clear there are some disaffected Telstra insiders who are deliberately leaking material to undermine Trujillo – and they regard Sainsbury as the “go to” man.
Whatever you think about Sol, the $54 million is an enormous amount of money for a management review, although Nick Minchin’s spokesman has defended it: “In a $24 billion company, spending $54 million on a transformation plan is not unreasonable.”
Sainsbury has been the single most combative mainstream critic of Trujillo’s team and would have been smarting that they gave The AFR Monday’s big scoop about the rejection of Geoffrey Cousins.
He’s clearly enjoying his revenge, although this morning’s effort was a bit unfair, because it suggests the transformation strategy is “a document” drawn up by middle management last year.
The army of Bain consultants are actually swarming all over Telstra implementing the strategy, such as trying to cut Telstra’s mind-boggling 1286 systems by 80%.
There’s no point having a plan if you can’t make it happen and Sol’s boosters reckon he’s compressing decades of change into a few years.
Sol’s chairman, Don McGauchie, outlined some of the claimed achievements on Tuesday and Sol will do it himself for many hours next Friday at the investor update, but so far the market remains unconvinced.
Meanwhile, Telstra shares continue to rise and are up another 2c to $3.71 this morning – the fifth straight gain this week. So much for Stephen Conroy’s claim that the Geoffrey Cousins spat would tank the share price. The 14c improvement since the Cousins story broke on Monday morning has lifted Telstra’s market capitalisation by $1.7 billion, albeit in a stronger market. Keep it up boys.