- Managing Me
- Big Ideas
- Managing People
Last week at midnight, a user posted a whinge on the popular broadband forum, Whirlpool. User 80XER5ANTAR05 was railing at his internet service provider [ISP], Internode, for allegedly slowing down the speed of his connection.
“WTF [What The F--k] Internode?? Why slow me down again?”
By 9am the next day, his post had been replied to personally by Simon Hackett, the founder of Internode, which is now a division of the telecommunications company and ISP, iiNet.
Hackett explained to the complainer that his internet wasn’t being slowed deliberately, and gave him some suggestions on how to fix the problem. He linked him to the Internode customer feedback email address.
“Have you contacted Internode support? If not, can you please do so … we can help you!” wrote Hackett.
Some might wonder if this is a productive use of a leader’s time. But consumer ratings suggest customers appreciate it. In 2011, a Roy Morgan survey of ISP customer satisfaction found that Internode had a 94% satisfaction rating. By comparison, the biggest provider, Telstra, has a rating of 72%.
The only other ISP rating more than 80% was iiNet, which bought Internode at the beginning of this year. Hackett remained on the executive team of Internode until August, and then stepped down and took up a role as director of iiNet, working closely with the founder and CEO, Michael Malone.
Hackett’s response to user 80XER5ANTAR05 is typical of his leadership style: he takes a personal interest in customers, staff and executives.
Hackett believes that if you provide your existing customers with quality service, word of mouth will take care of bringing in the new ones.
Hackett describes his model of customer service as a virtuous circle of engagement. “It’s been Internode’s marketing strategy for as long as I can remember,” he says. “If someone hops on a public forum and complains about you, they’re not trying to damage you; they just want [their problem] fixed. If you fix it early, you gain a massive supporter. If you don’t, they go further against you.”
This approach has served Hackett and Internode well. “There’s an enormous credibility I’ve gained over time by being engaged at that frontline level,” he says. “It’s an incredibly powerful mechanism to understand who our customers are.”
Riding the wave
Hackett has been involved with the internet in Australia from the start. A self-described lover of technology, he graduated from the University of Adelaide in 1986 with a bachelor’s degree in mathematics and computer science.
Afterwards he joined the university’s IT division and was part of the AARNet project, which brought the internet to Australia for the first time. “It was a fabulous learning experience,” he says.
But Hackett had no intention to stay at the university; he wanted a company of his own. That ambition was realised in 1991, when he co-founded Internode with fellow graduate, Robyn Taylor, who left in 1993.
Hackett’s company spent three years finding a direction, and then focused on being an ISP. “It was a perfect time to catch the internet wave in Australia in 1994,” he says. “As soon as ADSL was available we were onto it.
“The biggest challenge for us was trying to catch the balls as they fell out of the sky. It was like a gold rush and by serendipity we were where we needed to be,” he says.
Picking the right moment to hit the market is an important part of any business and it’s no different in the tech world, says Hackett. “Timing can be critical in technology waves; five years earlier and no one would have bought it, five years later and I would have been behind the wave,” he says.
This year, it was another new wave of technology that led him to sell his company to iiNet. The deal was completed in January. “Things are happening in the industry and the national broadband network (NBN) is accelerating them,” he says. “The internet is heading towards commoditisation and to succeed in that world you need enormous scale. iiNet/Internode is one of the four entities in Australia that have the scale to compete.”
Growth through sale
It was the similar culture between the two companies, and his relationship with iiNet founder Michael Malone, that gave Hackett the confidence to sell. “I previously said to Michael that Internode wasn’t for sale, but if it was, he’d be the first guy I’d call,” says Hackett. “Both companies have some very similar drivers: high quality of service and high quality of outcome.”
Hackett has had a friendly rivalry with Malone, who started iiNet a couple of years after Internode. “I’ve known [him] for the better part of a decade,” says Hackett. “We felt we were on the right side of the fence … both of the ‘challenger’ mentality. In Australia, everything is Telstra and everyone else is a challenger.”
The “challenger” mentality has now become part of Internode’s brand. “I think I would like us to be the challenger that makes people happy. We already hold that position and I think we have a good chance of holding it.”
Hackett says customers will pay a premium for quality. “Because I started out serving high quality software to a small number of customers, I realised … I could sell quality outcomes for slightly higher prices. There’d always be a market for quality. It may be a smaller market, but it’s a market that doesn’t go away,” he says. “I’ve always been personally driven by quality.”
Board member and aviator
Hackett doesn’t intend to take his money from the sale and run; he’s in the business for the long haul (although he did fulfil a lifelong dream of buying a plane with the sale proceeds).
In July this year, he left his position as leader of Internode to take up a board position with iiNet.
“My strategy was to [equip] Internode [to] continue to succeed in this era, not just to pull money out of it,” he says. “It’s because I’m so mentally involved in this industry that I didn’t just want to sell and move away. I’m now the second largest shareholder in iiNet [after Malone]. I’m not on the board for the money; I actually really like this stuff.”
When LeadingCompany asked if the merger had been what he expected, he said: “Because there’s been a lot of good blood between the businesses for a long time, the actual integration of the companies has been almost spooky smooth,” he says.
Again it seems like Hackett has chosen his timing well. iiNet made its debut on the ASX200 this month, helped by the addition of Internode.
In a volatile global economic environment, both companies have kept growing. “In the GFC, if we hadn’t known it was happening, we wouldn’t have seen it in the numbers,” says Hackett. “[In terms of spending, the internet] was number three after beer and smokes in the list of things residential users wouldn’t cancel if they lost their job.”
When asked what he would do differently in his career, he pauses for a moment.
“How do I put this? I’ve made a hell of a lot of mistakes and like everybody that’s what you learn from. If I hadn’t made mistakes, I couldn’t have learned from them. My whole business career was started from a decision; I had an opportunity to travel to California and sell software there or I could indulge this bee in my bonnet and start a business. I’m glad I did.”
What should a leader never say or do?
“Lie. It’s that simple. Ten years of social media has told me that, as well as being a parent for slightly longer. It’s always better not to lie.”
What elements are critical to achieving change?
“Belief in yourself. If you believe you have a great idea, don’t let anyone tell you you’re wrong. The genuinely brilliant ideas look idiotic at the start because no one else has thought of it. There’s a flipside to this. A lot of people hold on very tight to exclusivity and ideas. Chances are you’re not the first person to have that idea, but you can be the first person to implement it. Run faster than the other guy – get it done.”
He mentions a business inspiration of his, South African-born American entrepreneur Elon Musk. “He really is the world's best 'commercialiser' of good, but hard, technical ideas. Taking them and making them succeed as businesses where others find it too hard to do so,” he said. Hackett is in the process of starting up a management company, called base64, for new investments he’s interested in.
What makes a workforce productive or more productive?
“Active involvement in what you’re doing; a sense of involvement in the mission of the organisation. If they know why they’re coming to work, if they have access to what the point of [their work] is, then everything changes. If you can somehow maintain the sense that your team can make a visible difference in the world then they will. It’s not just about the money.”
What qualities do you look for in your direct reports?
“Self-motivated and a feeling I can trust them. The trick is if you have a direct report that you’re afraid to delegate to, that’s not a good sign. It’s the old platitude about making yourself dispensable and that only works if you trust the people you’re working with.”
What is your favourite source of leadership inspiration or ideas?
“Watching other entrepreneurs in the industry do what they do. Whether it’s Steve Jobs and Elon Musk, [or] watching people do what they do and figuring out why. You can learn things from business leaders by simply asking them and often they’ll be fearless in answering.”
What was the most challenging moment of your career?
“Probably the moment when we got to about 15 staff for the first time; I realised it was going badly wrong and I had to go back to eight. We had a near-death experience at one of the plateaus, where the bills suddenly go up. I spent some time then staring at every single bill and wondering if I could pay it. Certainly focuses the mind.”