Vodafone’s new boss still needs to dial up radicalism

theguardian.com:

I t is remarkable that a company, even one as big as Vodafone, can announce 11,000 job cuts over three years but also say that no net cost savings will flow to the bottom line. A notional €250m (£220m) gain will be consumed entirely by reinvestment. Such is life in the world of European big telecoms – there are few simple wins.

The point about Vodafone, however, is that its financial performance is worse than most of its peers. “Our performance has not been good enough,” said the new chief executive, Margherita Della Valle, on Tuesday, telling shareholders what they knew already. The share price, down 7% on Tuesday, has more than halved over the past five years.

As the former finance director, Della Valle was the insider candidate for the top job, and thus not everybody’s idea of a fresh start. One can, though, say this in her favour: in the plain-speaking department, she’s an upgrade on her predecessor Nick Read.

Whereas Read seemed perpetually to be making excuses for setbacks (to the point where even Vodafone’s traditionally indolent board was obliged to act), Della Valle is free to admit that the approach over the last few years has been “too incremental” and the company has baffled itself with internal complexity.

The cock-up in Germany, which ultimately cost Read his job, owed much to the failure both of head office in Paddington and management on the ground to recognise the significance of an unbundling change in local consumer law. Fleeter-footed rivals seized the opportunity to grab a share in Vodafone’s biggest market (30% of group revenues). So, yes, Della Valle’s prescription for a simpler management structure, a smaller head office and more local accountability sounds correct. Critics have pointed at Vodafone’s