Audio Quick Take: Globe Telecom’s Ernest Cu on Adapting to New Customer Habits
Julie Devoll, HBR
Welcome to HBR’s Quick Take. I’m Julie Devoll, editor for special projects at HBR, and today I’m joined by Globe Telecom’s CEO, Ernest Cu. Cu’s leadership and vision for operating in a digitized world has played a big part in Globe’s success. His push for digital transformation initiatives, such as leveraging the cloud, allowed the company to adapt quickly to new consumer habits, creating innovative products and services that enhanced the customer experience. Cu led Globe to become the number one mobile brand in the Philippines and the purveyor of the Filipino digital lifestyle. Ernest, thank you so much for joining us today.
Ernest Cu, Globe Telecom
My pleasure, Julie. Great to be here.
Julie Devoll, HBR
Why don’t we start by having you tell us a little about Globe Telecom?
Ernest Cu, Globe Telecom
Globe Telecom is the leading mobile operator in the Philippines today, with about 80-plus million subscribers. We do have fixed line as well, fiber broadband, but really our forte is on the mobile services side, where we led the transformation of the Filipino lifestyle to that of digital. Aside from telephone services, we also have the leading e-wallet in the Philippines, called GCash. It now has 33 million users in the country and generates approximately 20 billion pesos, or dollars I should say, in transactions in a 12-month period, and it’s growing extensively. So as you can tell, Globe has been really leading the digitization of the lifestyle of the Filipinos over the past few years.
Julie Devoll, HBR
What prompted Globe Telecom to pivot to digital in such a big way in 2013?
Ernest Cu, Globe Telecom
For us, it is about the internal systems. Actually, it’s all about efficiency and delivering services quicker to the Filipino public. We saw that our systems were indeed antiquated, and if we were going to espouse a digital lifestyle, we ourselves should be digital. We were experiencing things like delays in deployment because of the procurement of servers. We were seeing capacity constraints crop up. If we build a system in trial mode and suddenly, whatever it’s running on, it explodes in terms of traffic, we’d be caught, basically, and have to deliver more capacity in a very short time. So it’s the flexibility and the speed, and really, we saw that digital and particularly the cloud was a great way of addressing those issues.
Julie Devoll, HBR
How much of the innovator mindset is now a part of Globe’s DNA, and how has that benefited the company in its digital transformation journey?
Ernest Cu, Globe Telecom
The innovator mindset, I think, is very much burnt into the company. It’s a reflection of my own personality and my own interest in newer technologies, not for technology’s sake, but technologies that will help the company get faster, get better, and also help consumers in terms of helping their lifestyles and improving their lives through digital solutions. Right? And so we tried to espouse that every step of the way in the company and really try to have people experiment with different innovations. And failure, as you know, is a given at some point, but as long as the risks are managed, we’re fine with people failing as well.
Julie Devoll, HBR
You mentioned consumers. Does intuitively understanding your consumers help with your longer-term bits?
Ernest Cu, Globe Telecom
I think it’s a fair amount of importance. After all, we treat Globe not just as a telco but as a consumer service company, and anticipating the needs of our consumers really drives everything we do in terms of what partnerships we strike, what new products we release, what new services we offer, and generally how we interact with the public. Being a customer-driven and customer-first company as well, I think having customers’ best interests and needs at the forefront will help serve us moving forward.
Julie Devoll, HBR
What kind of internal transformation did Globe have that helped propel it to such success?
Ernest Cu, Globe Telecom
One of the major transformations was becoming a cloud-first company. We said that we would make sure no more new systems or projects were set up that were not either virtualized or set up in the cloud. That’s one of the first things we did, and one of the first systems we actually, say, transformed, was our email system—the most basic to demonstrate to our people that it does work. And from then on, all our systems have been slowly transformed, and we’re still on that journey today. We still have some core systems that are sitting on on-premises equipment that eventually we’d like to move to the cloud.
Julie Devoll, HBR
Can you talk about some of these initiatives for A) Globe’s business and B) its customers, and what were some of the outcomes?
Ernest Cu, Globe Telecom
We have a philosophy at Globe that we would not sell anything to our customers before we try it ourselves, right? Or kind of saying, we want the permission to play in that particular market. And so, several things: security was a big thing for us, cybersecurity, again, mostly in the cloud. We developed a very strong program to bring us to the top 5% in the world in terms of cybersecurity practices. We turned that into a service now for our customers. It took us a while to convince people that that was important. Philippine corporates tend to be more conservative with regard to change and adopting new technologies. And so, with the advent of more digitization and more digital transactions, people are more aware of cybersecurity.
The second thing we’ve been doing is helping customers transform to the cloud the same way we did. We recently acquired a couple of consulting firms to help us gain the expertise and assist our customers with moving to the cloud. A lot of customers approached us and said, “We like what you did in your cloud transformation journey. Can you help us?” And what we were finding was we didn’t have enough capacity; we did not have enough expertise to do what the customers wanted. So we’re beefing up our capabilities and staff to be able to deliver for our customers in that manner.
Julie Devoll, HBR
What are your plans for Globe over the next 18 to 24 months?
Ernest Cu, Globe Telecom
Our plans are to continue to evolve our services, to make them relevant to the Filipino public. The telco, over its 20-plus-year history, has built quite a number of assets in terms of customers, customers’ data, marketing and distribution skills, our ability to partner, and our capital as well. Telco is a high, cash flow–positive industry. And of course, our people, right?
And through our incubation vehicle, 917Ventures, we intend to leverage all these assets into building many more, hopefully, unicorns. Our GCash business, our company Mynt, recently attained unicorn status with its last funding round. And we hope that we’ll be able to address more problems as well as build up these startups into larger entities for the future; again, solving Filipino life problems.
Julie Devoll, HBR
So what are the technologies that are helping Globe’s operations through this pandemic?
Ernest Cu, Globe Telecom
Well, certainly, the shift to cloud services like AWS has been instrumental; imagine, with the pandemic and the severe lockdowns we experienced in the Philippines, our people were still able to do major upgrades. We were able to do migrations. A lot of it because we didn’t really have to set up anything physical; a lot of it was done virtually. A lot of people were still working from home. And I think that’s really played a key role in us achieving continuity during this pandemic.
Julie Devoll, HBR
How are these technologies also helping employees and customers?
Ernest Cu, Globe Telecom
I think for our employees they present a nice progression into learning new skills and also make life easier. I mean, speaking of the migrations that I mentioned before, in the pre-pandemic days, a migration would entail us clearing out a whole floor of our conference center, having people camped out for almost two nights, monitoring the migrations, bringing catering in—all the logistics.
We did two major migrations during the pandemic and people did them from home. I think it’s a great realization that life can be much easier if you try and force yourself to adopt the new practices as well. And customers are benefiting because I think the migrations are more seamless, they’re more trouble-free, and that means uninterrupted service for our customers.
Julie Devoll, HBR
Where does 5G play a role in this?
Ernest Cu, Globe Telecom
I think 5G for Globe at the moment plays a key role in expanding our capacity for data connectivity. The Philippines suffers from a constraint of not having enough cell sites due to factors like geography and topography, and difficulty in obtaining permits. Up until about four or five months ago, it took us 28 permits and about four to six months to obtain all the needed permissions to be able to build a cell site. And so that’s really hampered the building of cell sites in this country. So building a 5G network on top of the current 4G network gives us a new highway to reach our customers. I think the higher speeds and lower latency eventually will evolve into many more use cases that will eventually benefit a lot of Filipinos.
Julie Devoll, HBR
What do you think some of the new skills will be needed to help Globe get there and what programs have you started to fulfill this?
Ernest Cu, Globe Telecom
One thing that I think would be really helpful is employing the agile work style. We’ve been struggling with that, we started with two years ago. There are some projects that are working very well on agile and some that are not. We’re actually undergoing a very extensive review right now, saying, “What are the key success factors and what makes projects succeed and not under this new environment?”
Because we do feel that development under agile will deliver many more improvements and services through more frequent releases if we can make it happen—but then again, there’s a lot of dependency on other departments, right? It’s not just one self-contained unit. And when you have a telco where there’s more dependency than most with other departments than just your own, we’re hoping that keeping that one particular aspect working will help us through and continue the progress that we are making.
Julie Devoll, HBR
Ernest, this has been great, and I want to thank you for joining us today.
Ernest Cu, Globe Telecom
My pleasure. Thanks for the opportunity.
Julie Devoll, HBR
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Audio Quick Take: Globe Telecom’s Ernest Cu on Adapting to New Customer Habits
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