Telenor Xpress 4 - 2000

SERVANT OF THE PEOPLE

As President and CEO of Telenor, Tormod Hermansen insists that the real strength of the company is in its employees, not in its network or cutting-edge technologies.

Facing his long moustache, determined expression and a reputation for speaking his mind, visitors to the office of Telenor's President and CEO can be forgiven for being somewhat intimidated by Tormod Hermansen. Here's a tip: ask him about Telenor. Once he starts talking about the company, its history, its future and all the people who make it work, Hermansen's excitement is contagious.

A DECADE AT THE HELM
Hermansen joined Telenor in 1991. For the last ten years, he has helped guide Telenor's remarkable transformation from a rigidly structured state-owned Norwegian monopoly to a dynamic publicly-traded telecommunications company with operations throughout the world. According to Hermansen, the key to that transformation was to change not only Telenor's organisational structure, but also how the company's employees approached their work.

"From the beginning, I argued that telecommunications is part of the service industry, not the technology industry," says Hermansen. "While we provide cutting-edge technological communications solutions, our business is about people, not technology."

TELENOR, THEN AND NOW
Hermansen explains that in the early 1990s, many believed that Telenor's greatest asset was its network. But Hermansen insisted that the company's key resources were its employees and customers. Oddly enough, he was supported by engineers at Telenor, including former CTO Ole Petter Haakonsen, who was instrumental in realising Telenor's potential as a customer-focused telecommunications company.

10 years ago, Telenor had an inflexible centralised structure, which left little opportunity for employees to develop initiatives without intrusive managerial supervision. Today, Telenor employees are encouraged to take responsibility for their decisions, innovate, and be more entrepreneurial. "A good manager is one who serves his people," says Hermansen. "I can't do much on my own, except create the right environment to help Telenor's employees develop the business units in which they operate."

MAKING CHANGES, ONE STEP AT A TIME
Change processes are nothing new to Hermansen. Prior to becoming CEO, Hermansen worked as a reformer in various government ministries (including Labour, Finance, and Health & Social Affairs), helping Norway embrace mixed market. Hermansen quickly earned a reputation for his innovative reforms and his skill in negotiating with government officials, many of whom were reluctant to upset the status quo.

His experience earned him Telenor's top spot and has been instrumental to his success over the last decade. Under his direction, Telenor has been streamlined and decentralised while becoming more international, entrepreneurial and customer-focused. Construction of Telenor Fornebu, a cutting-edge office facility that will house 7,000 Telenor employees by 2002, is well under way, and on 4 December 2000, shares in Telenor were offered to the public for the first time, both in Oslo and on the Nasdaq in New York.

50,000 BOSSES
Now that Telenor has become a publicly listed company, Hermansen must not only answer to officials in the Norwegian government (which maintains a majority share) but to the more than 50,000 retail and 300 institutional investors that purchased shares. "I feel a tremendous sense of responsibility to our shareholders," Hermansen says. "They have demonstrated their confidence in Telenor and we must continue to earn their confidence by offering good returns."

Hermansen is a well-known figure in Norway and is often stopped on the street by customers and investors who offer encouragement, advice and occasionally, criticism. For the most part, Hermansen welcomes these encounters as a reminder of his responsibilities. "Being listed on the financial markets has given us access to capital markets, encouraged us to continue seeking growth opportunities at home and abroad, and helped improve customer relations. After all, many of our customers are also shareholders."

MANAGEMENT BOARD, NOT BORED MANAGERS
With 50,000 shareholders examining their performance every day, Hermansen and Telenor's executive management team are under a lot of pressure. And with each director responsible for their respective business units, competition for Telenor's capital resources can be fierce. But according to Hermansen, the management team works well together, despite their occasional disagreements. "We encourage each other to be direct, open, and give and receive constructive criticism," he says. Hermansen welcomes these occasional conflicts, believing that they help create dynamism and energy. "We have fun, but it's not a social club."

In many ways, Telenor's management team is a model of how the company's horizontal teamwork structure should work. "By giving our workers responsibility and making them accountable for their actions, we create a dynamic and entrepreneurial environment that breeds creativity and innovation," says Hermansen. "I don't believe in one school of management. I believe in managers who find solutions that work."

THE HERMANSEN LEGACY
While Hermansen is reluctant to take individual credit for Telenor's remarkable transformation, he does acknowledge that he will probably be remembered for developing and implementing Telenor's new people-oriented organisational structure, nurturing a generation of talented young workers, and guiding the company through its first steps as a publicly traded company. But he's not done yet. Hermansen has been working closely with Gun Bente Johansen, director of Human Resources, to find ways to attract and maintain skilled workers; he has been instrumental in developing Telenor's'ethics guidelines and in launching Telenor Corporate University and Telenor Fornebu, and he continues to press for more expansion into international markets. "We will continue to invest in foreign markets where we are confident that we can leverage our cutting-edge technology and skilled personnel," he says.

THE FORTUNATE CEO
However Telenor changes in the next few years, Hermansen insists that the company's strength can never be accurately measured by the quality of its technologies, its market share or its success in foreign markets, but only by all the skilled, dedicated and motivated people who work there. "I feel very fortunate to have been a part of Telenor's change process," says Hermansen.
Based on his record as president and CEO, it would seem Telenor is fortunate to have him too.



Text by: Alexander Wardwell
Photo by: Jens Sølvberg