How Kelly Bayer Rosmarin knew it was time to manage her own outage

Before fronting a Senate inquiry into Optus’s massive outage, Kelly Bayer Rosmarin knew her time at the telco was nearing its end but still felt the need to put in a ‘good showing’.

Optus CEO Kelly Bayer Rosmarin wanted to put in a good showing at a Senate inquiry into the outage despite knowing her time was nearly up. Picture: NCA NewsWire / Martin Ollman

As Kelly Bayer Rosmarin left Parliament House after facing a bruising Senate inquiry on Friday, she felt like she had put in a good showing.

She had the support of the Australians on Singtel’s board – former Westpac boss Gail Kelly and corporate lawyer John Arthur. But in the end, she couldn’t restore confidence among the telco’s Singapore-based directors, who had her on close watch over her communication skills following last year’s disastrous cyber attack.

The fact that she left Parliament House flanked by police officers, cemented the perception she was under siege, out of touch and it was time for her to go.

She also then came to the view that she was increasingly ­becoming a distraction to Optus.

But she’d been under scrutiny long before the outage.

In the months after the cyber attack in September last year, Singtel – which is controlled by the Singapore government – initiated plans to ensure such a reputational disaster did not happen again.

Bayer Rosmarin – known for being one the smartest people in the room but not necessarily the best to read that room – had nobody on her executive leadership team who was responsible for communication. This would cost her job.

The closest person Bayer Rosmarin had was former NSW Premier Gladys Berejiklian, who manages Optus’ business arm. But hanging over Berejiklian was the Independent Commission Against Corruption’s finding that she engaged in serious corrupt conduct while in office – a finding which she is appealing.

This hindered the ability for Berejiklian to be publicly visible in the hours following the outage, leaving Bayer Rosmarin to perform media duties alone.

But even without ICAC’s ruling, running NSW is different to running a corporation. Not having a strong executive who is an expert in crisis communication to deliver frank advice to Bayer Rosmarin was a glaring capability gap at Optus.

Singtel was quick to highlight this shortcoming in the aftermath of the cyber attack in which Bayer Rosmarin’s communication skills were roundly criticised.

Singtel was heavily involved in recruiting someone who could deliver sound and trusted advice to Bayer Rosmarin. But finding top talent and bringing them through the door takes time.

In early October – a month before the outage – Optus announced it had secured Danielle Keighery from Crown Resorts to sit on its executive, leading corporate communication, marketing and reputation.

Danielle Keighery will join Optus’s executive early next year. Picture: Britta Campion

Keighery had previously been the public face at Virgin when there were flight delays after the airline sank into administration before being sold to Bain. And at Crown Resorts, she had led a turnaround from three inquiries in three states, which found the casino group had facilitated money laundering and organised crime – a dire state of affairs far worse than a cyber attack.

But Keighery was not to start at Optus until early next year. So when the outage cut off more than 10 million Australians – with some not even able to dial triple-0 for emergency services – Optus regressed to the same behaviour that condemned it following the cyber attack.

For Bayer Rosmarin, her crime was not overseeing an unprecedented outage, it was a failure to communicate effectively. It took seven hours for her to face the media – she was the only representative from Optus to do so – by which time Canberra had already taken over.

Communications Minister Michelle Rowland completed her first radio interview about the outage at 7.30am, following up with another at 8.30am. It took Bayer Rosmarin another two hours to do the same.

Crisis communications is all about speed and containing the narrative before it races off. And despite doing 11 media interviews the day of the outage, Bayer Rosmarin lost control, sparking unforced errors such as when Bayer Rosmarin flatly denied that a network upgrade triggered the outage.

Optus later revealed that an upgrade did indeed spark the meltdown but it was on an international peering network, not its own. It stressed that it was a foreign operator before revealing that it was its parent company Singtel.

Less than 24 hours later, Singtel issued its own statement – as Singapore regulators were watching the unfolding crisis closely – placing the blame back with Optus, prompting its troubled Australian subsidiary to clarify that the fault was completely in its own network. Again a communications blunder that exposed Singtel’s sensitivity and embarrassment.

Adding to tensions was Maybank sending a note to Singtel investors estimating that Optus’s compensation bill from the outage could be up to $400m – almost three times higher than the clean up from the cyber attack – while predicting an exodus of customers to rivals Telstra and TPG.

It was then that Bayer Rosmarin is understood to have started to feel she had lost the support of some Singtel directors.

Insiders say the feeling was that a reset was the only rational way forward, without which overcoming Optus’s second reputational crisis in 13 months would be insurmountable.

But rather than decide to resign ahead of a Senate inquiry into the outage, Bayer Rosmarin chose to put on a good showing in Canberra. She had Optus chairman Paul O’Sullivan’s support.

Bayer Rosmarin was pummelled. Inquiry chair Greens Senator Sarah Hanson-Young said he communication was “lousy” while Labor Senator Karen Grogan said her evidence was “fluffy”. But despite knowing her time at Optus was nearing its end, she said she had not considered her own future at the telco, saying it was not the time to think about herself.

Such stoicism created some warmth among Singtel directors but it wasn’t enough to completely win them over, particularly after Bayer Rosmarin was filmed leaving the inquiry flanked by police – another optics blunder and one which a trusted and authoritative communications professional could have prevented.

Her decision to go crystallised at the weekend, with Singtel preparing a statement quickly ahead of the market opening on Monday.

Crucially, Singtel moved to install another member to Optus’s executive – Peter Kaliaropoulos as chief operating officer – a position that had long been talked about but never actioned during Bayer Rosmarin’s tenure.

Singtel chief executive Yuen Kuan Moon said: “We recognise the need for Optus to regain customer trust and confidence as the team works through the impact and consequences of the recent outage and continues to improve”.

“Optus’ priority is about setting on a path of renewal for the benefit of the community and customers.”

Originally published as How Kelly Bayer Rosmarin knew it was time to manage her own outage