Leveraging insight: The neglected strategic capability

High quality insights are crucial for telcos

Each year telcos invest in external insights from strategic and tactical research houses, alongside primary research budgets. This investment is a response to the ever-evolving trends that are shaping the industry, the need to understand them and support decision-making. It is therefore critical that telcos develop the capability to leverage them well.

What drives the need for insight?

Learning and seeking evidence drive the insight needs across the business. This ranges from individuals drafting a one-off client proposal, to strategy teams developing the corporate response to an emerging opportunity. The breadth of the insight need has implications for research buying and funding practices, as well as how insight is distributed.

Being in the business of external insights, STL Partners is always keen to understand how telco customers use insights and what research management practices they deploy to derive more value from insight services. STL Partners asked Olga Holin, a seasoned research buyer with recent telecoms experience, to talk to a group of her peers and synthesise their perspectives on what “good” insight practice looks like.

The report examines the drivers for external insight acquisition and the types of insights typically acquired. It outlines the insight management approaches at four telcos (representative of Olga’s sample) and highlights the benefits and challenges of each. It then sets forth several guidelines for operators and other organisations to ensure insight quality and derive more value from insight acquisitions going forward.

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Why are external insights necessary?

Across all the organisations we spoke to, respondents agreed that research insights were necessary and valuable, chiefly to drive learning and aid business decision making. The stated reasons for acquiring research include:

  • To identify future growth opportunities and threats in order to plan and innovate accordingly,
  • To inform and educate employees, thereby complementing existing capabilities,
  • To validate internal assumptions and build a deeper understanding of the business and its environment,
  • To assess business performance in context and validate effectiveness.

While some of this insight could conceivably be generated internally, the value drivers of external research over an internal function are:

  • “We don’t know what we don’t know” – To gain access to topics and trends potentially not on the organisational radar. Drawing on the expertise from external sources allows organisations to capture insight more easily and assures no threats or opportunities are missed.
  • To remove blind spots in internal thinking – To challenge mental models, by providing objectivity to change the way an organisation might perceive a certain technology or topic.
  • To influence senior executives – To strengthen the credibility of business cases and market overviews. The insights of analyst houses with strong reputations make analyses more convincing to senior management. As one telco put it, “They don’t always listen to us, but they usually listen to external reputable sources.”
  • To increase the speed of internal knowledge acquisition and learning – To develop the knowledge of employees quickly (they don’t have to find the information, just contextualise it).
  • To secure quality information – To ensure information is robust, unbiased, consistent with industry definitions (external agencies validate information via multiple sources and have no vested interests to protect).
  • To supplement limited internal insight resources – To answer information einquiries more quickly and through experts versus having to recruit internal experts to understand an emerging area.
  • To get access to information that might otherwise be unattainable (e.g. competitor information).
  • To seed change – The outside and informed perspective of a research house can highlight a need for change that may not be recognised due to internal mindsets and environment.

The value to the organisation of having these insights will be influenced by the extent to which findings can inform learning or decisions in more than one part of the business – and the longevity of the findings (how quickly they go out of date) or whether they have a future focus.

External insights may only be required to address needs in a limited business area at a specific point in time, e.g. where a product team wants to know how a newly launched product is faring versus competitor offerings. This type of insight can be considered tactical insight, as it provides the information to enable quick adjustments and decision making in the shorter term, more likely the type of decisions taken by middle managers.

Strategic insights, on the other hand, can generally inform decision making across the organisation more broadly. The topics are relevant to more than one area (e.g. digital transformation) and over a longer period (they say something about the future).

Strategic insights are able to influence decision making at an executive level, equipping teams for discussions around larger investments and those concerned with long-term returns rather than immediate gains. This is illustrated below.

 Tactical versus strategic research

external insights

Source: STL Partners

The nature of the research has implications as to how it should be managed to maximise value.

Table of Contents

  • Executive Summary
    • Recommendations to maximise insight value
    • Telco insights challenge
    • Next steps
  • Introduction
  • Why are external insights necessary?
  • Insight management across the research lifecycle
    • Basic insight management process
    • Advanced insight management process
  • Telco insight management case studies
    • Telco 1
    • Telco 2
    • Telco 3
    • Telco 4
    • Set-up versus research type
  • How to increase the value of research in organisations
  • Index

Related research

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The Future of Work: How AI can help telcos keep up

What will the Future of Work look like?

The Future of Work is a complex mix of external and internal drivers which will exert pressure on the telco to change – both immediately and into the long-term. Drivers include government policy, general changes in cultural attitudes and new types of technology. For example, intelligent tools will see humans and machines working more closely together. AI and automation will be major drivers of change, but they are also tools to address the impact of this change.

AI and automation both drive and solve Future of Work challenges

Futuore of work AI automation analytics

Source: STL Partners

This report leverages secondary research from a variety of consultancies, research houses and academic institutions. It also builds on STL Partners’ previous research around the use of A3 and future new technologies in telecoms, as well as organisational learning to increase telco ability to absorb change and thrive in dynamic environments:

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The Future of Work

We begin by summarising secondary research around the Future of Work. Key topics we explore are:

Components of the Future of Work

Future of work equation

Source: STL Partners

  1. The term Fourth Industrial Revolution is often used interchangeably with the technologies involved in Industry 4.0. However, this report uses a broader definition (quoted from Salesforce):
    • “The blurring of boundaries between the physical, digital, and biological worlds. It’s a fusion of advances in artificial intelligence (AI), robotics, the Internet of Things (IoT), 3D printing, genetic engineering, quantum computing, and other technologies.” 
  2. Societal and cultural change includes changes in government and public attitude, particularly around climate change and issues of equality. It also includes changing attitudes of employees towards work.
  3. Business environment change encompasses a variety of topics around competitive dynamics (e.g. national versus global economies of scale) and changing market conditions, in particular with relation to changing corporate structures (hierarchies, team structures, employees versus contractors).
  4. Pandemic-related change: The move towards homeworking and hastening of some existing/new trends (e.g. automation, ecommerce).

Content

  • Executive Summary
  • Introduction
  • The Future of Work
    1. The Fourth Industrial Revolution
    2. Societal and cultural change
    3. Business environment change
    4. Pandemic-related change
  • How will FoW trends impact telcos in the next 5 to 10 years?
    • Expected market conditions
    • Implications for telcos’ strategic direction
    • Workforce and cultural change
  • Telco responses to FoW trends and how A3 can help
    • Strategic direction
    • Skills development
    • Organisational and cultural change
  • Appendix 1
  • Index

Related Research

 

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Building the learning telco

Organisational learning is key to telcos’ success in the Coordination Age

Developments in technology and organisational digital transformations increased the pressure on learning and development (L&D) departments in telcos. L&D departments, many of which were compliance-focused, were tasked with upgrading telcos’ entire skills inventories to ensure that workforces were fit for new ways of working (e.g. AT&T’s “Workforce Reskilling” effort announced in 2016).

What was perhaps under-appreciated initially was that the need for L&D would not go away:

  • Telcos continue to operate in dynamic environments that are inherently unstable (e.g. pandemics, climate crises, new and evolving technologies);
  • Traditional telco revenue streams have remained under pressure, requiring new and innovative thinking to identify opportunities for growth.

The VUCA acronym (first coined in 1987) – standing for volatility, uncertainty, complexity, ambiguity – provides a useful framework to describe the current telco environment.

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The telco’s highly VUCA environment

learning telco

Source: STL Partners

Telcos have made changes to organisation structures in order to accommodate this reality, e.g. “flattening” the organisation and decentralising decision-making to accelerate the pace at which organisations can take action (absorb change and innovate).

Additionally, they are recognising the importance of learning to this process. Workforce skills must remain relevant and collective corporate intelligence must evolve to decide and inform winning strategies.

This type of “organisational learning” requires conscious efforts on the part of both the organisation and individual employees. It is not enough to make L&D the sole responsibility of an L&D team, or an HR department and to task them with identifying appropriate content and courses to push out to employees.

Organisations need to foster an environment where learning is encouraged and enabled in pursuit of organisational improvement, customer satisfaction, innovation and growth. After all, it is impossible to improve/do something new without learning in the first instance. Learning tools, processes and practices are required – and barriers to learning should be removed.

Learning barriers can include:

  • L&D teams creating bottlenecks to learning (e.g. restricted course access)
  • The existence of knowledge silos
  • Beliefs that “knowledge is power”
  • A lack of clear goals around using knowledge/new capabilities for improvement (i.e. learningto create behaviour change)
  • No incentives for individuals or teams to engage in learning
  • Uncertainty about processes for capturing and sharing learning
  • Fear of failure inhibiting trials in order to learn something new.

This report considers the key practices associated with organisational learning and identifies lessons from telcos who are progressing towards becoming a learning organisation.

Table of contents

  • Executive Summary
  • Introduction
  • The value of organisational learning
  • Enabling organisational learning
    • Types of learning in organisations
  • Organisational learning in practice
    • Learning as an organisational priority
    • Identifying learning purpose
    • Content-based learning
    • Person-led learning (knowledge sharing)
    • Process-led learning
    • Trial, reflection and practice
    • Recognition and rewards for learning
  • Towards learning organisations
    • Findings
    • Evaluation
  • Conclusions
  • Index

Related Research

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Mapping the telco’s cloud native approach

cloud native

Based on operator interviews and market understanding, STL Partners mapped telco approaches to cloud native across two dimensions with the aim of drawing insights and wider recommendations for all telco leaders considering their stance on cloud native.

Dimension 1 (the horizontal axis) reflects differences in telcos’ operating model visions, ambitions and capabilities. Dimension 2 (the vertical axis) is a measure of the operators’ market outlook expressed as the perceived level of pressure on their current business model.

Operators’ change ambition (dimension 1) can vary from “cautious evolution” to “ambitious transformation”:

  • Some operators are more cautious about their own capabilities and accordingly, their expectations on how they would deploy cloud native network code. They see themselves as operating others’ technology delivered to them in a turnkey fashion. This is more akin to how legacy networks have been deployed and managed. By limiting or deferring change and adopting a best-of-suite approach, they hope to evolve to cloud native operations over time. These tend to be smaller operators with significant legacy operations. These operators’ customer-facing teams have little visibility of or see little relevance for their customers in cloud native networking.
  • Other operators, with more ambitious transformation objectives, anticipate that they take a stronger, hands-on, more accountable approach in combining and operating others’ technology, potentially from multiple suppliers. This is more akin to how cloud native applications are managed in enterprise IT domains. At their heart, these operators see themselves as software-based technology firms. Although these tend to be larger operators or operator groups, we also found some smaller operators with a strong automation focus that fall into this group. Customer-facing teams also understand what cloud native networking means in practice and what it enables for customers.

Telco perceptions of current business model pressure (dimension 2) ranges from “current model remains viable” to “current model is unviable”:

  • Some operators recognise that they are experiencing considerable immediate pressures on their existing telco models. Consumer revenues are in decline, due to intensifying competition from other operators, including current challengers and new entrants. Strong local tech competitors (including the hyperscalers) also constrain the opportunities for operators to grow their ‘share of wallet’ from enterprises. This being all the harder with largely undifferentiated applications and solutions. This pressure on revenues is coupled with a new wave of (5G) investment and a substantial ongoing cost base. The leadership knows that things must change and fast.
  • Other operators perceive that they face less pressure on their existing telco model. It may be that consumer demand and connectivity revenues are still growing for them and competition may have been less intense (e.g. a duopoly). These operators believe that they are in a strong position to expand their service offerings to enterprises without having to be particularly innovative; in many cases they have trusted brands and are seen as local tech leaders by enterprises and consumers. Regulatory and/or geographic market characteristics may provide barriers to entry. Although there are undoubtably operators who enjoy a favourable market environment, this is a shrinking group. Furthermore, perceptions can be misleading. They may be in for a shock.

STL Partners report Cloud native: Just another technology generation? contains recommendations for the leadership of telcos in each of the resultant four broad groups.

See our other in-depth research on Telco Cloud: