Innovation and Culture Change: Taking the Long View

February 22, 2016

kateby Kate McKenzie
Chief Operations Officer, Telstra Corporation

As part of the Senior Management Team at Telstra, I and my colleagues spend a lot of time thinking about and discussing innovation and culture change. We do this because we know innovation is a key driver of growth – not only for companies, but also for our customers, the economy and society as a whole.

I have formed the view that to succeed, an innovation strategy must be multi-pronged and multi-dimensional. It must be integrated into the company’s core processes, the senior leadership’s strategic agenda, as well as the behaviour of both individuals and teams. By its very nature, then, innovation requires a root and branch process of culture change, which in turn means it cannot happen overnight. It demands patience, optimism and a ten to twenty-year horizon.

Telstra began its journey of evolving from a traditional, fully integrated telco to a modern digital technology company several years ago. To remain sustainable in the longer term, we must simultaneously keep growing our traditional businesses, while staying up to speed with the debate and experience of our colleagues and peers around the globe, and investing in new partnerships and up-and-coming young start-ups. We can no longer remain in our silos, expecting to rely solely on home grown ideas. We must actively seek out and apply the best approaches that we can find around the world.

As part of this strategy, in late 2015 I travelled to Estonia and Israel to meet the key players in two of the world’s fastest growing tech hubs. Here I met and exchanged views with a variety of companies and individuals on how we can further join forces to enhance our individual innovation and culture change processes. And in both countries I found parents who are no longer encouraging their children to become doctors or lawyers – they are now getting their kids to study science and information technology and become entrepreneurs, as a way to build and also take advantage of opportunities in the digital economy.

I am now more than ever convinced that we as an industry need a three pronged innovation strategy, which focusses on:

•People and their individual characteristics

•Systems and environments

•Business models and processes.

I am happy to say that at Telstra we have made great strides over the past 12 months in our people strategy, and an important component of that is the work we’ve done to diversify our workforce. We have established a new community of women and men across all business units, who are passionate about championing the values, experiences and careers of everyone in the Telstra community, particularly our women. We are making Telstra more welcoming and more supportive for women in tech, while also giving them a space to collaborate and support other women across the company. Brilliant Connected Women, as the group is called, has been a great success. This is in no small part thanks to the drive of Telstra’s Group Executive for International and New Businesses, Cynthia Whelan, and her team. Our ‘All Roles Flex’ policy has also helped managers across Telstra change the way they work so we can hire and promote people who bring different backgrounds, life circumstances and skills to the table. We have also stepped up our efforts to encourage more young people, including young women, to study STEM subjects and to enter the tech sector. We want to make parents in Australia see the opportunities for their children in digital tech, just like those I have met overseas. It is vital, if we are to remain a driver of innovation in the economy, that we attract the brightest minds to our industry.


TELSTRA: City of Melbourne Chief Digital Officer Michelle Fitzgerald addresses competitors on the first day of the IoT Challenge, co-hosted by Telstra.

The physical workplace environment is often overlooked as a key element of corporate culture. However, if you want people to think differently, question the status quo and collaborate on new ideas, you have to give them an appropriate space in which to do so. Last year we opened Telstra’s new Gurrowa Innovation Lab in Melbourne, which is a space that allows different teams from across Telstra and our customer and partner network to come together and drive the new wavof innovation of Telstra. 1

Gurrowa, which means ‘interchange’ in the local Aboriginal Wurung language, has been designed specifically as a co-creation environment, and at the moment we’re working on projects to connect haptic robots to rural ultrasound equipment, to design portable systems that can locate lost children in remote areas, and to develop sensor applications to predict when equipment or structures may fail.

And to be truly innovative, we need to design new processes, systems and business models that will deliver speed at scale for new and enhanced products and services for our customers. For example, with Gurrowa we can develop a fully integrated and iterative design process. It provides a space for the design and prototype IoT devices, the network services to connect them, and the software developers to bring the services to life. We have also partnered with Pivotal to bring Pivotal Labs to Australia, which is a fantastic extension of Telstra’s innovation network and our capacity to deliver world-class technology solutions to our customers. We believe this will create a pipeline of skills in a range of areas, which in turn will further our innovation and culture change agendas. I am also very pleased that our start-up accelerator, Muru-D2, which since 2013 has seen 100 start-ups accelerated, 34 successful companies launched, and now operates also out of 4 locations including Singapore and Brisbane, and has partner agreements with other start-up incubators in key markets.

But of course truly innovative cultures are innovative everywhere. We’re working hard to encourage all of our people to develop, share and bring ideas to life in every part of the business. It’s about supporting people to be creative, to take calculated risks, to speak up and have the courage to solve problems in new and different ways. We do that partly through good leadership across the company, but also through specific initiatives such as our Innovation Hub and Pitch Nights.

In summary, then, to be truly innovative companies, we can no longer just focus on the technology driving the digital revolution. We need to look at the culture, people, environment and processes that influence our everyday work. We need a holistic approach, based on collaboration, networking and idea exchange. This is why I value my interactions with the membership of the GTWN. Let us continue to work together to keep our industry the driver of social and economic innovation around the world.

1 For more detail see


Kate McKenzie is GTWN’s President for Australia. Kate has been Telstra’s Chief Operations Officer since October 2013.

Kate says that she loves her job, as the Operations team is the backbone of Telstra’s business and because the Innovation, Technology and Networks teams are leading Telstra’s evolution as a world class technology company.

Before this role, Kate led teams overseeing product, promotion and pricing, strategy marketing, and Telstra’s regulatory, policy and communications activity. Prior to Telstra, Kate was Director-General of the Department of Commerce in New South Wales. She is also a Director of Pay TV operator FOXTEL and Allianz Australia. She is also a self-confessed big science fiction fan.