How working with start-ups taught O2 the importance of purpose

Telefonica's start-up incubator Wayra
Telefonica's start-up incubator Wayra

What is your purpose? A deceptively simple question can be hard for businesses to answer, says Telefónica's Jonathan Earle.

I was lucky enough to be part of the Central European Wayra set-up team - a start-up accelerator for Telefonica O2 - during a two-year secondment as CMO of O2 Slovakia.

At its inception, I was asked to mentor the finalists and found some common traits. While the candidates were bubbling with energy, had a desire to succeed and were enthusiastic, with a large helping of brain-power, only a handful could answer three fundamental questions:

  • Why were they in business and what was their purpose?
  • What were they going to offer and what customer need was that meeting?
  • How were they going to win in the marketplace?

Many could answer fluently what they would offer their customers, and how, but missed the 'why' they were doing so. Or, in simpler terms, what would make their team get out of bed in the morning and why their customers would have a connection with their service.

As part of the final pitch, I pushed them to think about all three questions, because I felt it would help move the relationship with their customers from a transactional one to a more emotional one.

I was able to apply this thinking during my time in Slovakia. To start, I looked for key insights. Slovakia is a beautiful country, but one that has been through a lot in the past 40 years and, while Westernisation is here to stay, many of the older generation rarely, if ever, complain, for fear of retribution - a fear rooted in their history. Given this, the big corporations take their customers for granted and a low service level is accepted as the norm.

With a fraction of the budget of my competitors, it was clear that our positioning would be about how we do things differently, because acting as a traditional mobile-phone service wouldn't create any standout.

So our purpose was that we believed that Slovak people were cheated and that Telefonica O2 would make a stand against this common practice (the 'why we were in business' and the movement we wanted to create for our own people). We saw our positioning as challengers in the market, always putting our own customers first (the 'what we stood for'), while offering incredible digital services and experiences was the 'how we were going to win'.

That purpose and positioning helped create real momentum, allowing O2 to achieve double-digit growth in revenue and profits; greater net customer growth than our competitors combined; and the highest internal and customer satisfaction scores across the Telefonica Group.

'What's your purpose?' is a tough question to answer, but one that, I believe, is essential if you want your start-up to have any emotional relationship with its own people and, more importantly, its customers.

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