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The Telco Generation Gap

By: Mark Cummings, Ph.D.

Today’s telco industry is facing a challenge. As the industry goes through wrenching technology, ecosystem, and business changes, it is confronting a generational shift. One generation is at or nearing retirement, while another ascendant. The two generations are not working well together and, if this doesn’t change, the industry will encounter serious difficulties.

What’s going on? Simply put, the problem is that the two groups aren’t listening to each other. Each generation thinks it is right—and that the other is wrong. The truth is that they both are right—and if they don’t start connecting and collaborating, their standoff is going to have deleterious effects on individual companies and on society as a whole. The only way out seems to be a small, bottoms-up, mentoring process.

Will history repeat itself?

I have seen this movie before. I have witnessed industry failures driven by one or the other generation not listening to the other. Let me tell you two stories, one in which the older generation didn’t listen, and one in which the younger generation tuned out.

In the mid-1970s, the Western Union Telegraph Company faced technology and business challenges. The company was the dominant network carrying digital information in the US going into this period. The appearance of LSI (Large Scale Integrated Circuits) semiconductor technology was completely disrupting digital networking. For a year, I was a member of the younger-generation split in that company before I left to move to Silicon Valley.

The younger generation had a sense that a sea change was coming, but the older generation didn’t see it. At Western Union, there wasn’t even disagreement between the generations; the older generation members only talked to themselves and held power tightly. They had good processes and procedures for implementing new products and services, but they just used them to make small incremental changes to existing technology bases—and left no room for the new ideas that were needed.

So, what happened? In the end, Western Union as a communications network operator ceased to exist, leaving behind only a small cash transfer business running on other companies’ networks. A lack of willingness to listen spelled the end.

This situation can cut both ways, though, so let me tell you another story. Heading into the 1990s, Motorola was a dominant cellular equipment supplier, but it had started out as a family-owned mobile communications company.  Its early product (on which its name was based – a combination of “motor” and “victrola”) was an AM radio receiver for cars. Motorola followed up on this product with the first special radio receivers for police cars.

At the advent of the 1990s, leadership changed generational hands: a second-generation son took over as CEO. At the time, I was developing SDR (Software Defined Radio) technology, had founded an SDR company, and was running an SDR industry association (SDR Forum). As a result, I had the opportunity to work closely with Motorola.

What I saw was the younger generation not listening to the older generation. Younger leadership had initiated many new product efforts. These new product efforts were focused on new and exciting technologies. But the younger people didn’t listen to the older people when it came to evaluation, planning, and implementation. What happened? These new products proved to be a series of failures.

In most cases, the failures were quiet and not noticed in the wider world. Sometimes, however, the failures were spectacular and widely observed. One example of such a high profile failure is Iridium, the low earth orbit communication system that was a technical success and a financial failure. A proper financial analysis at the beginning of that project would have shown that there was not enough revenue opportunity—even with the most wildly optimistic assumptions—to support the cost of deployment and operations.



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