Five critical errors that have compounded the Optus crisis after triple-0 deaths
Friday night’s abrupt press conference was an exercise in how not to handle a potentially fatal crisis, and now another triple-0 outage has emerged. Can Australians trust Optus?
Any chief executive should assume a company-defining crisis could strike at any moment. For Optus, a crisis appears to be business as usual.
The telco has had three defining shocks in as many years: the massive cyber attack in 2022, the 16-hour network outage in 2023 and last week’s fatal triple-0 blackout – by far the most damaging.
That’s why Optus’s response to its latest crisis is so perplexing. It simply hasn’t learnt from the past.
The 13-hour outage that prevented hundreds of Optus customers from connecting to emergency phone numbers has since been linked to the deaths of three people, and exposed a series of cascading failures inside Optus.
Chief executive Stephen Rue thought his hastily arranged Friday night press conference would get ahead of the story. Instead, his confused messaging and lack of calm made everything worse.
Health insurer Medibank botched its initial response to its 2022 cyber attack, playing down the sensitivity of the stolen data. But it quickly changed narrative. CEO David Koczkar apologised, was visible, and took the fight to hackers.
Through a series of mistakes, Optus has compounded its own crisis.
Stakeholders
Heading into last Friday’s press conference, it was clear Optus still didn’t know who its stakeholders were – a stunning omission after two national crises.
It is clear Optus still doesn’t have good relationships in Canberra or with its main regulator, ACMA.
Communications Minister Anika Wells’ office was emailed only after the triple-0 service was restored, and even then the extent of the outage was downplayed.
Then Optus botched the way it told the premiers of South Australia and Western Australia, who only found out there had been deaths in their states when Rue was running his press conference.
In any corporate crisis, particularly one on a national scale, politicians can make a situation better or worse. In this case, it got a lot worse.
A furious South Australian Premier Peter Malinauskas attacked Optus as “incompetent”. This then resulted in Optus’ handling of the situation quickly becoming the story, putting the telco on the back foot as it came under broader criticism, including from Prime Minister Anthony Albanese.
The botched strategy during the crisis and the aftermath seemed like the telco was lacking a crisis checklist.
No fix
Crisis management has three simple steps: acknowledge, apologise and fix. There was no fix.
Parent Singtel committed two years ago to learn from the nationwide outage and rebuild its Australian network. “Network resilience and security remains a top priority,” it said. To customers, this priority has clearly slipped.
Apart from Rue announcing an independent review, there’s been little in the past week about a commitment to increase capex or “do whatever it takes” to fix the core network or process failures. This will hurt Optus in the near and long term by undermining confidence. Consumers will think twice about the network’s reliability. Business customers will be increasingly nervous. Network down time costs businesses money.
Missing in action
Make no mistake, the buck stops with Singtel chief executive Yuen Kuan Moon – not local boss Rue. Moon has been missing in action, as though he is waiting until the worst of the storm passes.
It took Singtel five days to issue a short statement, in a move which smacks of offshore arrogance. Moon won’t arrive in Australia until the weekend and his visit had already been planned for a scheduled local board meeting.
Message: no need to change plans for a scandal in Australia of his company’s making.
Even if Moon has been on the phone to Rue daily, nothing signals management commitment and accountability like boots on the ground.
There are two examples that stand out in recent times. When there was a collapse in the tailings dam at BHP’s Brazilian joint venture that caused an environmental catastrophe, the then chief executive, Andrew MacKenzie, held a hurried Friday night press conference at the miner’s offices in Melbourne.
Just hours later, MacKenzie was flying out to the inland Brazilian state of Minas Gerais. There was no deflection or quibbling about ownership status of Samarco, the company behind the disaster. (BHP has a 50 per cent non-operating stake.)
When four Rio Tinto workers died in a Canadian mine plane crash last year, CEO Jakob Stausholm cut short commitments in Gladstone and flew immediately to the remote Diavik mine, spending the week with staff, while signalling his company’s support for an official investigation.
Chain of command
Rue isn’t in charge – Singtel is, but it prefers arm’s length management. The optics weren’t helped by Optus enterprise executive Gladys Berejiklian being spotted enjoying Saturday morning sun while the company reeled from being linked to triple-0 deaths.
In crisis conditions, it’s all hands on deck. Berejiklian, a former NSW premier, should have offered to smooth relationships or provide insights.
This highlights Optus’s fundamental problem: fragmented command. There’s a local advisory board without real authority, while Rue’s pay and incentives are set in Singapore.
Rue’s newness to the role protects him from resignation calls for now. But when he promises to rebuild trust, it lacks authority. He doesn’t look in charge because he isn’t.
Response
The response so far to one of Australia’s worst corporate disasters has been feeble. Rue was quick to announce an independent review (former Australian Energy Regulator chair Kerry Schott was named this week to lead the review). But this will take until the end of the year to complete and kicks the can down the road.
Optus already has a poor record on transparency. Following its massive cyber attack in 2022 that affected millions of existing and former customers, it promised full disclosure of a review, then fought in the Federal Court to keep the Deloitte report a secret. It lost.
Rue has already acknowledged procedures weren’t followed and multiple warnings about triple-0 failures were ignored.
The outage apparently was technical, but accountability must be swift.
Telstra had its own issues with a 90-minute outage in connecting customers to the triple-0 network early last year. This was linked to one death in Victoria.
Telstra immediately informed emergency services. Chief executive Vicki Brady apologised, and personally oversaw the fix. Critically, she also released the results of the telco’s investigation and detailed what actions were taken to prevent it happening again.
That’s how crisis management should look. Optus failed on each count.
johnstone@theaustralian.com.au
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