Sol Trujillo charmed his chairman and the hacks who attended his first
media conference. The analysts seemed to like what they heard as well. Two
months later and the honeymoon is over – the pack is turning on Telstra’s Top
Tortilla as all sorts of people wonder just what has chairman Don McGauchie
done.

Alan Kohler’s
Smage column this morning gives the impression McGauchie might be wondering the
same thing. Try this :

In addition to Sol Trujillo there is Greg Winn, now chief operations
officer, Bill Stewart, now group managing director strategic marketing and Phil
Burgess, head of policy and communications. This team of four is now running
Telstra. They seem to have come as a package: there were no executive searches
for the positions occupied by Winn, Stewart and Burgess. In addition there is
Andrew Klein of Bain reviewing the cost structure. No real problem with all
that, but it would be interesting to know whether the board understood exactly
what was coming.

The other important aspect to it is they bring US
experience and attitudes to the company. That means an aggressive approach to
dealing with the Government and regulatory agencies — already in evidence — and
perhaps a belief that regulation can be rolled back…

There are already signs that such an
approach will backfire in Australia, but it will be fun for those of us watching in the front
row.

The backlash
has penetrated the Canberra press gallery as well. Here’s Michelle
Grattan this morning:

With four out of five of the company’s
top executives (including Trujillo) new arrivals from the US, it’s
no wonder that there is a disconnect between the Government and Telstra. And
this is apart from Trujillo’s style.

Governments don’t like to be held to ransom by companies,
especially when the government is the majority shareholder, a point Trujillo
either doesn’t understand or isn’t concerned about.

One Government source said: “He hasn’t dealt with a
government that is one of his shareholders before. He feels if he pokes us in
the eye he’ll get what he wants. His ways have baffled ministers. We’re
Australian – we’re not used to bolshie tactics from companies.”

And there’s Malcolm Maiden pondering whether Sol will
happily tour the world’s capitals talking up T3 if he doesn’t get his way on
regulation, never mind the effort he’s made to talk the company down. It’d be nice to claim this
mass wake-up about Trujillo was
started by a story in yesterday’s Eureka Report about Sol barging and bashing
towards a lesson in cultural differences, but it was inevitable from the moment
he signalled he knew everything about Telstra and the locals knew nothing.

The contrast with the most
successful imported American CEO, BHP’s
Paul Anderson, couldn’t be greater. Anderson
believed the people within the company best knew the way to run it. He saw his
job as helping them do so – and that wasn’t just a management cliché in his
case. It was the approached he used very successfully before BHP and
is using successfully again now at Duke Energy.

The first thing Anderson did
after arriving at BHP was
to listen to as many people as possible, asking them what they thought needed
to be done. Sol Trujillo’s message is
that he and his three amigos know everything, the locals know nothing and they
better get on board the American bus damned fast.

There’s no downside in this
for Sol and friends. They are paid a bundle whether it works or not, whether
they’re sacked or succeed. Whatever happens, they’re only here for a few years
and then they’re gone. It’s not so easy for Don McGauchie
and his board. It is arguable that McGauchie was a risky choice as Telstra
chairman, that he lacked major experience outside agri-politics. Don is
irretrievably in the Trujillo
taxi and could yet find himself leaving with it.