Arun Sarin succeeded Sir Christopher Charles Gent in the summer of 2003, to run Vodafone, the £2bn telecommunications giant, after it had gone through a period of intensive acquisitions. The acquisition phase, Sarin says, is largely over. The focus now is to complete the integration of Vodafone’s disparate companies. ‘We acquired a lot of companies to become what we are today. Now we have to make this series of companies work as one operating company.’ Mr Sarin says he is happy to be steering that course. ‘No company runs on automatic pilot. You need to manage and steer and direct a company not as an individual but as a group of senior team members that bring different skills to the table. After the discussion we figure out where we want to go, at what speed we want to go, what sector we want to go in. All of those things are important.’ That approach reflects a management style built on consensus. The new chief executive spreads the Vodafone operating mission in person at so-called ‘town-hall meetings’ to some of the group’s 68,000 employees in some 28 countries. Sir Christopher, who started the practice, addressed more than
30,000 workers in such meetings in 2002 alone. Mr Sarin also relies on the company’s flagship wireless devices to communicate with the workforce by e-mail and webcam. A graduate of the Indian Institute of Technology and the University of California at Berkeley, he relies heavily on performance targets, benchmarking and stiff financial measures to monitor results. Anything that threatens Vodafone’s annual revenues of c50bn, underlying earnings of c20bn and free cash flow of c10bn is viewed dimly. Referring to Vodafone’s ‘play-book’, he says: ‘One of the nicest things about Vodafone is that we benchmark everything. We benchmark churn, we benchmark revenue, we benchmark cost of acquisition . . . and then we put all the charts up and we say, “OK, Italy does this really well and the UK does this really well and Germany does this really well. Can we learn something from their business model that we can apply in our other markets?”’ ‘We do this absolutely rigorously and with great enthusiasm every month. But, frankly, we don’t talk a lot about it externally. I would say this is part of the internal management and process that helps us stay ahead of the competition.’ Vodafone’s new chief executive does not see anything particularly smart about employing such measures. They are seen as logical tools for a global corporation in evolutionary mode. Sarin pays tribute to his predecessors: the company ‘is in very good shape’. As a long-serving Vodafone non-executive director, he could hardly do otherwise. But colleagues suggest he is also determined to strip out duplication and savings from far-flung areas. This is expected to involve more centralised product development at Vodafone’s new headquarters campus, where 3000 staff work in seven large buildings, each named after a communications legend such as Baird, Bell and Edison. Marketing, branding and sales will be more carefully co-ordinated across different territories. Summing up the Sarin challenge, one executive says: ‘The verdict is that Vodafone has got through its acquisition phase with a range of decentralised operating businesses. The issue now is to run it like one business while giving local operations a measure of autonomy. It’s not an easy trick to pull off.’
What role can performance measurement play in aligning and integrating Vodaphone’s operations to become a market-facing innovator?