This appeared a little while ago.
- Updated May 18 2018 at 11:00 PM
Did Andy Penn cost Telstra shareholders $46 billion?
Andy Penn's timing couldn't have been worse. When the slick-haired accountant accepted what should have been the crowning job of his stellar career – chief executive officer of Telstra – the phone giant's share price was about to create a shareholder wasteland.
….. Most of article omitted
Throwing around cash
In the past, Telstra hasn't helped by engaging in behaviour classic to big companies fearful of structural decline: throwing cash around.
Penn inherited one of Thodey's pet projects: to place Telstra near the centre of the digitisation to healthcare. In Power Point presentations, the idea was fantastic. Telstra planned to use its expertise on government communications contracts to sell health software to medical departments, hospitals and related organisations.
The contracts were big and there was no dominant incumbent. Telstra thought it could walk in and talk over. It began a buying spree of health-IT startups. "We are trying to bring the digital revolution to health," Telstra Health's CEO Shane Solomon said in 2015.
Word spread around the small industry Telstra had opened its thick chequebook. Pretty quickly, Solomon had 1000 employees and a dozen or so businesses with different cultures that weren't sure how to work together.
Financially, Telstra Health was a failure. A $240 million buying spree couldn't even generate $240 million in revenue a year. Solomon resigned a year ago. Cynthia Whelan, Telstra's head of New Businesses, which includes Telstra Health, left in December.
With Telstra shares below $3, some are buying. Investors Mutual, which has about $150 million of Telstra shares, topped up in the last week or two. The Sydney-based fund manager acknowledges that Telstra has been caught in an industry-wide downturn, but likes that Penn is willing to get out of businesses with poor prospects and take tough decisions about paring back costs.
"He's doing a reasonable job," says investment director Anton Tagliaferro. "Can he do more? Probably."
with Max Mason
Read the rest of the long article here:
You would have to say that when summarised in a few paragraphs the Telstra Health saga is hardly a triumph – and that does not even mention the Cancer Registry woes!
Big vision, poor execution one would have to say, or maybe one might say “who knew health could be so complicated?”
David.
Wonder where Shane Solomon and his little pomme side kick are now? Oh right the ADHA, throwing good money after bad
ReplyDeleteIt was always I high risk undertaking. Things always look good on paper. If Telstra Health breaks up will the component parts survive, the market having changed somewhat. Or will it get a bail-out in the form of the lucrative MyHR operations contract that is up for renewal?
ReplyDelete7:33 AM. You might be onto something there, Greg Hunt spat with Matin Bowles seems to have a relationship with Telstra Health and the cancer screening, which is quite clear now is a debarcle. Perhaps a commission into the Health Department would be a useful exercise.
ReplyDeleteThe ADHA seems a hotbed of conflicts of interests.
Can't trust the government, can't trust ADHA or the myhealthrecord.gov.au website, can't trust pharmacists
ReplyDeletehttps://www.smh.com.au/national/nsw/when-chemists-go-bad-wave-of-drug-store-dealers-caught-pill-pushing-20180531-p4zimf.html
the only sensible and safe thing is to opt-out. And give the government a fright at the next election for abusing our trust.