Change agent: Derek McManus on the importance of replacing old thinking with new ways

Gus Sargent
Mar 1, 2022
  • 7 min read
  • News

Engineering success

Derek developed an expertise with transformation during his lengthy career in one of the world’s most dynamic and innovative business sectors. “I’m an engineer at heart,” he says, “with 37 years of experience in telecoms – including 34 in mobile. Along the way, I’ve seen lots of evolution.”

He explains: “In 2006, I became CTIO of O2, many pundits had written us off because we had no well-heeled parent company to look after us – so, we had a lot to prove. I spent those crucial early years getting us into a shape where we were punching above our weight – making the most of what we had and trying to look bigger than we really were.”

In 2008, O2 was acquired by Spanish corporate Telefonica. The following year, Derek was made COO. “Telefonica was never the biggest investor in technology,” he says, “so, once again, it was a case of maximising resources and innovating.”

Global catalyst

Derek points out: “At this stage we had the largest ratio of customers to spectrum of any operator globally. Think of spectrum as an expanse of motorways – that’s the total available bandwidth in which mobile companies operate. It’s typically the case that your customer base will fit your spectrum – so, it follows that if you have a low amount of spectrum, you will also have a low market share. But we had 13% of the spectrum, and 22% of the market.

“That was only achievable with an intense focus on customer experience and innovation. And some of the methods and practices we deployed in that effort have since been embraced by other mobile brands around the world.”

All that hard work paid off. “When the time came to pitch for UK iPhone exclusivity,” Derek notes, “Apple looked around at everyone in the market, and we really stood out: we were the fastest-growing mobile brand in the country, with the greatest levels of customer satisfaction, revenue growth and profit.”

From industry also-rans to prime movers: what made that journey possible? “Frequent transformation was key,” Derek says. “In my career, I’ve been lucky enough to preside over, and make happen, a whole series of ambitious transformations – not just within O2, but in the telecoms industry at large, and even on a global level.”

A pragmatic ally

One, major cornerstone of the transformations that Derek has overseen is efficiency. “When I first became CTIO,” he recalls, “one of the first things I had on my desk was a three-year investment plan that we just couldn’t afford – to make it work I set out a challenge to reduce its overall cost by 50%, cut the time-to-market of the relevant technology by 50% and boost our return on investment by 50%. We called it the ’50-50-50’ plan, and it was largely a ‘brain-shift’ project: we had to step back and take a completely different approach to how we built, delivered and partnered up on technology.”

Fittingly, the plan led to a transformative reassessment of O2’s relationship with a major rival – on terms that Derek thinks will have major implications for the telecoms sector as a whole. “As part of ’50-50-50’,” Derek says, “we started network sharing with Vodafone – to the point where we split the country in half. Vodafone handled one geographical chunk, we handled the other, and we created a joint venture to look after all the assets. There are a few variations of that in the world – but none that have stood the test of time quite like the model we came up with. Vodafone went from being our fiercest competitor to being a pragmatic infrastructure ally: a complete change of mindset.”

A fresh outlook

From just a glance at those career milestones, it is clear that if Derek can find an opportunity to replace old thinking with new ways, he will: a defining trait of a market disruptor. Which explains why he took a leading role at Tecknuovo. Indeed, his desire to shake up outmoded models makes him an ideal fit for Tecknuovo’s mission to overhaul the rigid and decidedly threadbare transformation sector.

Why, then, is the transformation industry so ripe for disruption? Derek explains: “If we look at the majority of the big delivery consultancies, they’re quite tired, and their offerings are more focused on utilising their existing resources and protecting revenues. A typical consultancy doesn’t offer great value for money, is expensive, slow to react, and doesn’t necessarily have access to all the skills that customers need. So, it becomes a challenge for the companies who want to transform to execute their plans.”

Forensic expertise

Derek points out that, according to McKinsey, 70% of transformation projects fail. In his view, that’s often because businesses:

  1. Are not ready, and haven’t thought through the impacts of transformation on their leaders and people, or
  2. Don’t have the required agility to move at pace, or
  3. Don’t have access to advisers who genuinely support their delivery agenda

Some companies may even have combinations of those issues. Focusing on the third point, Derek says: “Traditional change specialists are somewhat fragmented, and are struggling to keep up with what customers want. So, they tend to fasten themselves to a particularly promising revenue stream at the client – and, if they can execute well enough in that specific domain for an indefinite period, the customer ends up feeling trapped in that relationship. That is the polar opposite of the Zero Dependency model that Tecknuovo has established – and will continue to uphold – with its own clients.”

Looking in greater detail at how Tecknuovo operates, Derek says: “McKinsey’s failure figure stems largely from businesses undertaking technology transformations that they don’t fully understand. But the key benefit of our DevOps model is that it allows companies to make very discreet, surgical changes much more quickly – enabling clients to build upon, and extract value from, the systems they already have, rather than going down the tortuous route of completely shedding the old for the new. Our level of forensic expertise can unlock even the narrowest technology architecture to find value at speed for customers and shareholders.”

Fuelled by values

In parallel with Tecknuovo’s compelling business offer, Derek is equally impressed by, and committed to, the company’s values system: principles of excellence and ethical conduct – in both internal and external dealings – that are woven into the company’s DNA. “The business I came from was based on a set of very clear values,” he says, “and living and breathing them was part of our success. Since I joined Tecknuovo, I’ve joined the leadership team in pushing the message that our brand encapsulates as much a type of behaviour as any physical manifestation of our work. And if we can instil that in all our people, that will ultimately serve our customers well.”

He stresses: “I wouldn’t join a business if I didn’t feel that its values were aligned to my own. I believe that being consistently obsessive about your values, and making decisions based on the directions they set, will eventually lead to success.”

In Derek’s assessment, Tecknuovo’s values will fuel the company’s efforts to meet a significant market need for transformation assistance that marks a compelling departure from the traditional model. “For one reason or another,” he says, “almost every company in the world needs to transform its offering. Perhaps its market has changed or diminished in the wake of the pandemic, or it needs to create radically different products. Or maybe it’s grappling with the changing nature of employment.

“As a result, demand has never been higher for technology enablement that will help companies re-energise their relationships with customers and break new commercial ground. For that reason, I’m excited by the opportunity to be Deliberately Different, at the very time clients are looking for a reliable and trustworthy alternative solution that is guaranteed to have their best interests at heart.”

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