Lessons for CEOs from the Optus outage communications crisis

Experts have completed an autopsy of the Optus’s massive outage and here is what big corporations can take away from the crisis.

Optus CEO Kelly Bayer Rosmarin (in cream) being escorted by AFP at Parliament House in Canberra. Picture: Sky News

Crisis communications experts have completed an autopsy of the Optus’s massive outage that cut off more than 10 million Australians from phone and internet services and ultimately cost Kelly Bayer Rosmarin her job leading the telco.

A month after the meltdown - which left more than 220 Australians unable to call triple-0 and small businesses up to $10,000 out of pocket - crisis communications have revealed the biggest lesson for chief executives is to walk and chew gum at the same time.

This is something all corporate leaders can learn from as they face an era of increasing customer expectations as well as pressure from investors over complying with environment, social and governance obligations, while ensuring their business stays afloat.

C-suite executives must also be attuned to their customers needs, otherwise they run the risk of disastrously misreading the public mood - as was the case during the failed Indigenous Voice referendum, which most ASX20 companies supported and donated millions of dollars to.

According to crisis communications experts, Ms Bayer Rosmarin, who had led Optus since April 2020, failed on those two key areas, leading her to depart the telco on a wave of negativity.

Ms Bayer Rosmarin’s mistake was she was focused on what triggered the outage and restoring Optus’s services rather than customers, who were grappling with a crashed network and demanding answers.

Politicians have seized on this failure, effectively putting all chief executives on notice.

A Senate inquiry - established to investigate the impact of the outage on customers and services - asked Ms Bayer Rosmarin why she hadn’t held a press conference earlier in the crisis, leaving Communications Minister Michelle Rowland to fill the void.

Ms Bayer Rosmarin said: “It’s actually unusual for a CEO to appear during an outage because the public would expect that my focus is on working with the team to resolve the issue”.

But public relations and communications experts say she was wrong: the CEO must face the customers, early and often during a crisis.

Sefiani Communications CEO and reputation counsel Robyn Sefiani says during an outage like the one that hit Optus, the chief executive should keep stakeholders informed, while engineers sort out the technical aspects.

“It’s interesting to note that Ms Bayer Rosmarin came from an engineering background … she said her focus was on fixing the network – but she has a team of people to do that,” Ms Sefiani says.

Kelly Bayer Rosmarin, then Optus CEO, appeared before a Senate inquiry this month.

Morrow Sodali managing director Susan Redden Makatoa agreed. “A common mistake that people make in this area is that they wait until they have all the information,” Ms Redden Makatoa said.

“What (the Optus outage) has shown is that in the public arena … people want to know quickly. If you have an issue of that significance, then at some point, the big boss is going to have to step in.”

Making matters worse was the outage was Optus’s second reputational disaster under Ms Bayer Rosmarin’s leadership after a cyber attack in September last year - and she hadn’t appeared to have learnt the lessons from that crisis.

A television appearance to apologise for the outage backfired when Ms Bayer Rosmarin commented about a Sydney barber whose business had been unable to process payments from customers or make bookings went viral on social media.

“I’m disappointed that a barber couldn’t do haircuts today,” she said. “That seems like one of the few things you can do without connectivity,” she said.

Senator Hollie Hughes, then-Optus CEO Kelly Bayer Rosmarin and Senator Sarah Hanson-Young at the senate inquiry.

BBS Communications Group managing director Lisa Nixon said the lack of a compassionate response proved costly for Optus and Ms Bayer Rosmarin.

“Optus was already on shaky ground with customers after the data breach. If you follow social media or know anyone who was affected by that, the wounds are still very raw, both because of the breach itself but also, again, the lack of a compassionate response,” Ms Nixon says.

“Thousands of small businesses … have a right to be outraged.”

Ms Sefiani said every business needs a solid crisis communications plan to avoid an Optus-style backlash.

“The golden rules to effective crisis communication are to be prepared with your risk analysis and crisis communications in advance, have your crisis team ready to convene at short notice, identify the facts and act swiftly to inform stakeholders and the public of what is happened and what you’re doing to rectify the situation, show genuine empathy and commit to keeping people informed,” Ms Sefiani says.

The lack of robust plan left Optus scrambling - not just during the outage but the days that followed, which were peppered by a spate of unforced errors, including denials and clarifications about what sparked the shutdown. This proved costly for Ms Bayer Rosmarin’s leadership after Optus’s Singapore parent Singtel was blamed for triggering the outage during the bungled communications.

Ms Redden Makatoa says the crisis communications plan must plug into the general crisis plan.

“While I’m sure the team at Optus were frantically trying to do a whole lot of things for the good of the company and their customers … because there were delays between updates, announcements and what have you, other people started to come in and take that narrative.”

Optus was approached for comment and referred queries to its answers to the Senate committee and the questions taken on notice. The Senate inquiry is due to report in February.

Originally published as Lessons for CEOs from the Optus outage communications crisis