Call to arms for BT troubleshooter

A MAMMOTH task lies ahead for Hanif Lalani. He has the job of turning around BT's Global Services division.

Analysts call Global Services the telecoms giant's "engine of growth".

But the division, which networks huge organisations from Visa to the National Health Service, is misfiring badly.

It was behind a recent a

profits warning which sent BT's share price crashing to a 20-year low.

Global Services chief executive Francois Barrault fell on his sword and up stepped finance director Lalani.

Last week's results showed the depth of the rot. Group second quarter pre-tax profits were down 11 per cent to 590m.

Global Services had been forecast to bring in underlying earnings of 200m. They came in at 119m.

There have been no problems attracting business – revenue was up 15 per cent at 2.2bn. The simple fact is savings have not kept up with its rapid growth.

Adverse foreign exchange rates and a decline in higher margin UK business were also blamed, but the inescapable fact remains that in a recession, the fat must be stripped away.

"The difficulty we have had is we're just not making enough profit and cash from the business," said Lalani.

"We need to take a much more aggressive step. I will streamline the business so that it has the right cost base."

Eradicating duplication, slashing the cost base – these are phrases BT staff can expect to hear much more of in the first phase of Lalani's plan.

Job losses will be a major feature of this, but Lalani won't say how many of the division's 37,000 people face the axe.

BT last week said it will shed a total 10,000 jobs by the end of its financial year, with 6,000 of these indirectly employed staff such as agency workers and subcontractors.

Lalani, whom you suspect commands fear and respect in equal measure, has created action teams who report their progress to him every Friday afternoon.

He has stopped spending worth 20m after nine days in the role – sponsorship of a jazz festival, a sales conference in Las Vegas and excessive consultancy have all been axed. He plans to drive down the number of suppliers "from thousands to hundreds".

Staff are clamouring to play their part in the turnaround. After asking for suggestions, he's had 550 emails from staff.

"This is a company where people want to be led and make a difference," said Lalani.

"If you are a good leader, people want to follow you. When I have made a success of this – which I will – I want people to say that was a fantastic time. Hard, horrible and fair, but I had a great time in the process.

"The one thing that we have been is very decisive on everything. I cannot imagine many companies that would have moved at the pace that we have."

For phase two, once 90 days of cost cutting are done, Lalani hints at a more fundamental change he may bring to the division.

"If you're doing business with a bank, it doesn't matter whether it's the bank of Ireland, RBS or Citi, they all want very similar things, they just do it in different geographies."

Lalani suggests he may create a sector-based division – moving from the current country-based split to sectors such as banking, pharmaceutical and commercial. "If you move to being a sector-driven company you have a much better understanding of your customers' needs."

Meanwhile he's retained the FD role while the search goes on for his replacement. He snatches three hours' sleep a night these days. Lalani had no hesitation accepting the global services role.

"My initial thought was this is where I can make a difference and I can make it happen.

"The second was I have got to do the finance job, pensions and this."

Then again, Lalani knows

all about doing things the hard way.

Born in Uganda in 1962, his family fled Idi Amin's regime when he was 10 to arrive in the UK.

His was one of thousands of families uprooted by the military dictator, and they found themselves in Wetherby.

"My parents probably had the toughest time because they left a very affluent lifestyle to arrive with a suitcase and 5 in their hands in a council estate in Wetherby.

"For them I think it would have been very tough to come from a very affluent background to starting all over again."

But as only the second Asian family to arrive in the neighbourhood, they were met with open arms. Random acts of kindness to the stray family left a heavy impression on the young Lalani.

Toys left on the doorstep; the teacher who walked him around the playground to point out names of trees. "It's probably the best thing that ever happened because we integrated very quickly," he said. "It's a very warm, welcoming community, and the majority of people understood the difficulties you were going through. Those kind of things you enjoyed as a child that you didn't realise other people did for you."

He now returns to Yorkshire six or seven times a year, mainly to watch his beloved Leeds United.

Lalani has been with BT for a quarter of a century since joining in 1983 as a graduate trainee in its international division. Since then, he has risen through the ranks, tasting life in BT's former high street stores, experiencing manufacturing in the Far East, mergers and acquisitions across Europe, running BT's business in Ireland and, most recently, directing the group's finances.

Does he harbour ambitions to become chief executive of the company he's served so loyally?

"I have never asked for any job in the company," said Lalani. "I didn't go out of my way to say, 'Please make me group finance director. Please can I have the global services job.' If you have a habit of delivering, people can see the capabilities you have and they will find you if there's a job to be done."

Hanif Lalani

HANIF Lalani was born in Uganda in 1962 and moved to the UK with his family in 1972 after fleeing Idi Amin's regime.

He was educated at Wetherby High School and later attended Essex University where he studied Mathematics, Operations Research and Economics.

Lalani joined BT in 1983 as a 21-year-old graduate entrant and has worked in a variety of roles in the company's UK and international divisions.

He moved to Northern Ireland with his family in 1998 to take up the post of finance director of BT Northern Ireland.

A year later, he was appointed chief executive of BT Northern Ireland, increasing its revenue and profit while cutting costs. He was also chairman of Ocean Communications, BT's subsidiary in the Republic of Ireland from June 1999 to September 2000.

In April 2002, Lalani was appointed managing director BT Regions. In September 2002, he returned to London as chief finance officer for BT Wholesale and in January 2003, he was awarded the OBE for his services to business in Northern Ireland.

He joined the BT board in February 2005 as finance director. In 2007, Lalani was named finance director of the year by the Confederation of British Industry.

Lalani was appointed chief executive of BT Global Services on October 31.

He is married to Sharmin and has a young family.