Optus channels Qantas approach to crisis management

Come again? Has Optus been channelling Qantas in crisis management skills? What is the cost of a severely damaged brand confronting millions of outraged customers?

Insisting that Optus first needs to do a highly technical “root cause” investigation doesn’t register with the public. Telco experts are meanwhile swapping theories about the possibility of faulty “route reflectors” that direct internet traffic routing instructions or “border gateway protocols” being overwhelmed.

Would this have anything to do with Optus relocating its network operations centre offshore, for example? Or Optus not investing enough in back-up technology systems? Who knows?

It’s little wonder government ministers are falling over themselves to condemn Optus’ “bizarre” approach and question its competence. Big engineering problems with basic services translate into big political problems. Directing blame elsewhere is inevitable.

Michelle Rowland’s predictable announcement of a “post incident” review into telecommunications will be designed to help all telco providers improve their processes in any further outages.

These are certain to be tested, along with the adequacy of redundancy systems in a digitised, data dependent world. In that sense, the Optus disaster is a timely warning about broader vulnerabilities across networks, including the risks or benefits of being able to shift networks in the event one goes down.

But it’s Optus’ response, or lack thereof, that’s the immediate fiasco requiring attention. It has already become another instant case study of what not to do in a crisis. Surely, any low-ranking manager, let alone a CEO, would have known a quick call to the communications minister should be one of the first steps.

Thursday’s establishment of a separate Senate inquiry – pushed by the Greens with Coalition backing – is another version of the political purgatory to come for Optus executives.

“While we welcome that Optus services were restored over the course of the day, it is critical the government conducts a process to identify lessons to be learned from yesterday’s outage,” Rowland said. “Connectivity is absolutely essential for Australian consumers and businesses, and the impacts of this outage were particularly concerning.”

The minister clearly has no patience with Optus’ airy dismissal of the need for direct financial compensation for affected customers, including small businesses. Company executives have made vague suggestions about thinking of how to say thank you and “reward customers for their loyalty and patience”.

“I think that there is a reasonable expectation here if there is an outage of this nature that causes them to suffer loss in some way – be that economic or otherwise – that corporations will do the right thing by them,” Rowland said in one of her many radio interviews.

“Australians expect providers to compensate them when things go wrong, and I think that’s reasonable.”

What’s obviously not reasonable, or even commercially rational, is trying to dodge financial responsibility until forced into it. As Optus, and its owner Singtel, most certainly will be sooner or later.

The CEO of the Australian Chamber of Commerce and Industry, Andrew McKellar, is not alone in describing Optus’ response as well as its lack of communication as a “clown show”.

It doesn’t help that Optus’ reputation, and that of its CEO in particular, are still recovering from last year’s data breach.

A review by Deloitte into what happened has not been released despite the company’s original commitment to do so.

Class action lawyers are currently attempting to gain access to the review. This week’s events can only reinvigorate demands for the findings to be public and more accusations that Optus wants to hide them.

Customer dissatisfaction with Optus had already led to many of its customers switching providers after cyber criminals hacked into the company’s database and published personal financial information and other details. Increasingly sophisticated cyberattacks are now a fact of life for any company, many of them totally ill-prepared.

No company is immune. But the government was extremely critical of Optus’ response and its inadequate communications 13 months ago too. Why were lessons not learned?

In a coincidence of timing, Optus released its half-year results on Thursday, showing a slide in earnings before interest and tax to $141 million despite a slight rise in revenue to $4 billion for the six months to September. This debacle will undoubtedly make for much tougher figures by the time of the full-year results.

Between now and then, Optus will have a lot more explaining to do. The prospect of Kelly Bayer Rosmarin remaining as CEO must be under question in an era where chief executives are the very public face of their organisation – for better or worse.

Even though she cannot be held directly responsible for “technical” network faults, she is certainly responsible for managing the response.

So far, that’s being marked as an F.