Arun Sarin succeeded Sir Christopher Charles Gent in the summer of 2003, to run Vodafone, the £2bn..

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
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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?

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