Here’s the interview with Johan Dennelind, CEO of DiGi by Errol Oh, TheStar.
After the interview was published by StarBiz, TheStar framed the story and sent it to the CEO office.
The challenge of taking DiGi to the next level. It’s a huge challenge. Maybe you don’t see it when looking from the outside, but is a huge challenge living up to the expectations. Also, coming back to Malaysia is a fantastic privilege for the kids – for them to be exposed to the culture and language even more, and to be again with their friends here.
You are the first DiGi CEO who has also been its CFO and CMO. How has that background shaped your approach to the CEO job?
I was a non-traditional CFO. I’m not an accountant, which people have questioned. They would go, “You can’t be a CFO if you’re not an accountant.” Then I became CMO. And I’d never done branding or campaigns or customer service. What was critical about these roles was the focus on the people – bringing teams together, setting the agenda, challenging people. I’m doing the same things today. I’ve never been CEO before, but I’ve been acting CEO and deputy CEO. So, I have the exposure and I know what’s the job about. There are, of course, differences in the responsibilities. But I hope I’m still the same as I was before in dealing with the people issues – in engaging with people to get them together, to understand each other, to innovate, to be challenged and to be passionate. It’s about infusing them with energy and then just run with it. That’s what I do.
But surely, in the time you’ve spent as CFO and CMO, you’ve gained other valuable insights in these areas?
Especially on the marketing side. I’m glad I had that year as CMO because DiGi is a lot about branding and the people and the passion. Having insight into how marketing and the commercial sector works and having a part in bringing the value proposition to the consumers, have been very, very useful for me today. Otherwise, I would have had to spend a lot of time as CEO to get into the inner circles of commercial marketing. I don’t have to do that now. I know the people, settings, issue and opportunities. I can spend more time on people and priority areas.
Marketing is perhaps the most visible part of DiGi. What can you tell us about the other aspects of DiGi?
DiGi is all about our people. We talk about our value proposition for the consumers. We talk about our brand to the outside. But we have a value proposition to our people, and we have to deliver our internal value proposition first. If we don’t do this, we can never deliver our external value proposition. So I think we do have something very unique as a company. It’s the passion of the people here. It’s something very, very special that I want to nurture even more. Take football as a comparison. You can have the best players and you can still fare very badly. But you can form a truly cohesive team and I think DiGi has found this. We probably don’t have the smartest guys with the best CVs in every aspect. We don’t have the Harvard guys. But I feel that we have people who put in a little bit extra and have a little bit more passion, and that makes the difference. If that’s not true, it has to become true.
We’re not really there yet in terms of delivering to all our people. I can see that in my first couple of months. We’re failing here and there in our promise to the people, and I take that seriously. That’s at the top of my agenda. It’s a question of what we are going to do with all that passion and experience that we have.
Then we can start delivering great things to engage the consumers. Last year, we started gearing up for what we call excellent customer experience. It’s not customer service as such, but it covers the whole value chain. When you are a consumer or an enterprise, you engage with DiGi in so many ways. You use our services. You make enquiries. You see our brand somewhere. You see our SMSes coming. There are so many touch points. And at all those touch points, the customer experience has to be excellent. You fail somewhere along the value chain, you’re going to get a little bit of negative perception.
So we have gone through our value chain and we did some quick fixes. But it’s bigger than that. We are disappointed every time there’s a customer experience below excellent. That’s a core initiative for the whole company. It’s driven as a programme, not just for customer service, sales or technology, but across the company. That should be seen on the outside. We are measuring it.
On our strengths and weaknesses, we now have so many things that we didn’t have before. Say, five years ago, we’re still a sub-scale company with inferior coverage and questionable quality. Now we have a network that’s equal in coverage. We have the quality that’s better than the others in so many aspects. We’re getting into 3G, which giving us credibility in certain segments of the market. We have services that I would claim are better and more user-friendly than the others. There’s no doubt that we have the value perception, with better prices and innovations. What we have is a fantastic platform if we just use it correctly. And that’s what we need to understand — how to use it correctly.
Over the past months, my agenda has also been to balance this. In certain areas, we are very strong in the market. In some places, we are quite weak. Going back to the sports analogy, it’s about playing offence in some places and playing defence in some other places. You’ve got to balance that.
And also, taking from the fact that DiGi has a new organisational setup, we need to focus on Compete Today. We can talk a lot about Compete Today as a function and why we need to focus even more. The world is changing. The competition is changing. The maturity is here. Compete Today is a division headed by (head of marketing) Tom Schnitker.
And now, we have broken loose a bunch of people into Compete Tomorrow, which is about strategic business. We put some of our best people from Compete Today in this new area. We’re thinking a little bit ahead and not the traditional way. We’re breaking out of our normal thinking and challenging ourselves.
Happy is an example. It’s driven from Compete Tomorrow because we’re doing different things. We’re challenging DiGi with Happy. The broadband initiative that we’re going into is being set up from Compete Tomorrow. It requires a different thinking. You can’t go into broadband thinking mobile. You go into mobile thinking mobile. So that’s also driven from this separate setting. So that’s how it is with the new initiatives – they are inside mobile but also outside mobile.
Should we be a player in another industry? Maybe. Let’s explore it. We have some time to evaluate this, but not too much. Revenue growth, as has been for the past years, will not continue forever. If you want to find new streams, you have to move outside the existing ball game. That’s the challenge. But that’s the kind of challenge we like. We like to try new things and we have a track record for being innovative and for coming up with new staff.
You say the people in DiGi have the extra passion. Where does that come from?
We do realise that as the management team, we are simply here to empower, to put the power in the hands of the people to do what they know. They know so many things that we don’t. People think that the management teams are smart. That’s wrong. Management teams are not the smartest guys. If you want to debate something with smart people, you have to go to the grassroots — the team leaders and the experts out there — and engage them. So, hopefully, it (the extra passion) comes from the fact that we’re empowering them and that we have an informal, open concept. That could be a wish. If that’s so, we can work on it to become reality. I don’t really know where we are, but I think we’re definitely in a better position than the others to give even more to our people. First of all, we’re not overstaffed. We should be able to deliver on our promises to the people, the staff. I really care about that.
Can you talk about the DiGi you have taken over and the company you want DiGi to be?
The DiGi three months ago is very much the DiGi today as well. But the DiGi three years from now will hopefully be different. We have to talk a bit about the challenges before leading into the need for change. The biggest impact is the fact that the economy and the marketplace are changing. We cannot assume that there’ll be automatic growth. That’s obvious. We have to be even better. We have to look beyond the way we normally do business. To do that, we also need to shape up. Maybe yesterday you got away with some standard performance; the consumers accepted it. Tomorrow, they won’t let you get away with that. Tomorrow, the consumers will expect more. One bad experience is enough for a consumer or an enterprise to leave you or to use less of your products and services. That drives change and the way we go to market. So hopefully, three years from now, we can bring truly superior customer experience to the users. I don’t mean randomly. I don’t mean here and there. I mean truly excellent customer experience throughout the value chain. So, I think the biggest change will be in the user experience.
The other thing is broadband will be a core part of the DiGi story three years from now. By then, our ambition of delivering Internet to the people will be highly visible. And when I say delivering Internet to the people, it is to your handsets in the form of advanced data services that you want and need wherever you are and whenever you need them.
Big screens are a part of Internet delivery. How do we deliver broadband to you on the PC or laptop or the TV? That is something that will have change the way we do things. As I’ve said, you cannot go into the broadband business thinking mobile. You have to go into broadband thinking broadband. We’re moving into a new business model. We have to understand the Internet business. We’re suddenly in the Internet arena much more visibly than we have been before.
How exactly will entry into the Internet business change how DiGi operates?
It changes the way we go to market. It changes the way we innovate. It changes how we need to have superior quality all the time. It changes the way we do customer interaction. It changes how we do billing. I mean, it changes many, many things we do today. This new business requires changes basically everywhere — in the organisational structure, business model, branding and so on. Today, we are trying it out (in DiGi), but I have had that experience back in Sweden. There, we were running two business models. Sometimes they come together and sometimes they don’t.
So, in effect, you’ll have DiGi splitting in two?
Whether we split in two or not, that remains to be seen. But now, we should be open to it. Whatever it takes to deliver Internet to the people, we will do it. We will use our existing setup as much as we can, but we also have to be prepared to look outside the way we are doing things. And that’s why we decided to set up our broadband programme under Compete Tomorrow. It’s not run under commercial.
Such wholesale changes sound like a bit of a roll of the dice. How do you ensure that DiGi is not taking too big a risk?
We realise that going into this new revenue stream is high-risk. But it is an even higher risk to stay outside. We have to do it. When you accept this, you’re then dealing with the risk. The risk doesn’t scare us; it just wakes us up and makes sure that we are pro-active about dealing with it.
It’s not like we’ll be the first to do this. We can learn a lot from the experiences within the Telenor group. We’re doing it in Sweden, where I was heading the consumer division for a few months. So I’m comfortable that we’re not risking the entire DiGi. We’re just enhancing it by making the broadband business part of our next stage.
It’s also a great opportunity for people to get exposed to new areas. It opens doors to new arenas for the staff. For me, it is the future.
When will we start seeing DiGi rolling out its broadband service?
We have committed to going to market later this year or early next year. We’re right now in the final negotiations of the vendor selection. In parallel, we will roll out a test network with a limited number of sites. We are gearing up the resources internally and also with support from Telenor.
What will consumers see between the commercial rollout and your vision of DiGi three year from now?
A lot. Hopefully, they will be as excited about our go-to-market rollout as they have been with our other services. We need to leverage our way of going to market, which has been excellent in using distribution, brand, pricing and innovation. All of that has to be taken into the new context. Instead of re-inventing everything, we can take the core of these and turn it into something new. If we can do that well, we can give the market a positive surprise.
In broadband, you will be addressing a different market than you do in mobile. How do approach this?
We will be competing against different players. There will be different components of the go-to-market mix – the pricing, the bundling, the distribution. Where do you go to get broadband access? Is it your normal DiGi shop? Probably not. You can go to the computer store. You have to think differently through the value chain and leverage what you have. That’s the whole thinking on how to do it.
I’m holding back a little bit with our plans. As we go through the next few months, we will reveal more with our launches and activities.
DiGi is No. 3 in the mobile market. What does it take to move to No. 2 or No. 1?
It again starts with the people. If we can maintain the passion and energise it around our new initiatives, that will be the cornerstone of our future success. We are No. 3 overall. As long as we gain revenue market share or do better than the others every quarter, we are doing fine. Question is, how far will that take us?
In prepaid, based on Q1 (first quarter of 2008) numbers, I would argue that we are very close to being No. 2, if we are not already No. 2. In postpaid, we are a distant No. 3. We are not happy with that. We don’t see that as fair. We have equal coverage. We have better quality. We have innovative services. We have best value. Why shouldn’t we be on top in everything we do? That’s our mindset. That triggers this unhappiness about being No. 3. Let’s see how far this takes us. Over time, we cannot help but overtake No. 2 if we do things right. I can’t tell you when or how much, but I can tell you it’s possible.
Can you put in equal effort in both postpaid and prepaid? How do you balance that?
I think you can. At the core, they’re the same. You should deliver quality service, innovation and good value. There are various customer segments, of course. You see a much clearer tendency for postpaid to reach out to the masses, where prepaid used to be dominant in the past. Last year and in Q1, our postpaid grew tremendously. And if we can continue, I think we can do better in postpaid in some areas, where we have been weak. People take it as a challenge. On average, we are the clear No. 3 in postpaid, but we are very low in some areas. Why should that be? That’s what we’re trying to understand. Can we be better? How do we become better?
How big a factor is mobile number portability (MNP) in winning market share?
It’s among the components but MNP is not the most important thing. The quality of our network and the value of our services are the key. If you don’t have that, you will never earn the right to become a supplier for corporates, for example. Now that we have established, MNP can help make it easier for consumers to change. That’s an opportunity. The most important thing is that the freedom of choice will be there. That puts a lot of pressure on us, the industry. If we disappoint you, you leave us. And that’s a good driver for superior customer experience.
And what do you have to say about DiGi’s ability to retain customers?
This a good shake-up for us, to stay agile and to stay on top of our customers’ demands. But we have said in the past, MNP won’t really be a big thing. If you look at markets around the world, MNP hasn’t really changed the industry. Realistically speaking, it won’t spur a lot of switching. But you need to think about it and prepare for it. There are upsides and there are also downsides. We are ready and we are looking forward to it.
In the annual report 2007, Morten Lundal wrote that 2008 will be “a year filled with immense challenges and opportunities”. How do you see the year so far and what do you see just down the road?
I couldn’t agree more with my predecessor. Look at the external factors. Look at the economy — the slowdown and the inflation. It is changing the way consumers and enterprises think about their pockets. Eventually, that will have an impact on us.
Based on Q1. we said we didn’t see big changes. We saw a slowdown but not a very dramatic one. We will give our latest updates based on the Q2 performance at the end of July.
That’s on the macro side. The immense challenges that we have in the competition, with new players coming in, are good. Competition gives you another reason not to fall asleep. We need more reasons to stay awake and they are keeping us busy. New competition will definitely challenge our strongholds in the value space. I like to be challenged. We are strong there and we are looking to reinvent ourselves. We will give them a tough time. It also makes us more disciplined in our corporate decisions.
There are a lot of internal challenges as well. But these are more manageable. I can influence the way we deal with our internal challenges. I can help people. I have people coming here every week, having the fruits and a chat. I do it individually with anyone who wants to meet me anytime. I do it with groups of people from any part of the company. I have questions, we chat and we get a lot of ideas.
You have spoken a few times about DiGi reaching out to people in Malaysia who don’t own mobile phones. What does this require and what is DiGi’s advantage here?
The advantage that comes to mind is the fact that we are seen as a value-for-money brand. Normally, the last batch of people who get on board the mobile way are in the lower income tier. So we need to adapt to that in terms of pricing and how we reach out to them. There are several millions of people in this country without mobile phones. There are various estimates but I think it’s close to size of the population of Sweden.
At this point, if somebody doesn’t have a mobile phone, doesn’t it mean that he doesn’t really need one?
Well, it could be that. Or it could be that he hasn’t had the experience of having a mobile phone. Once you do, you become addicted.
How do you convince these people then?
So far, people haven’t really needed to be convinced. But in the future, I think we have to tailor more to the consumer needs. First of all, we have to convince them why they should be mobile users, and secondly, why they should choose DiGi. And that’s a good pressure for us. We have some ideas there, which we will talk about when we do the relevant launches. So when people say the subscriber growth is over in Malaysia, I see that as a challenge. Sure there is growth. Let’s find it.