What leaders can learn from the Telstra outage

Every leader should assume that at some stage their organisation will face a crisis that threatens both performance and public trust. The recent Telstra outage offers an important lesson in leading under pressure.

Every CEO hopes they never have to explain why customers could not call emergency services. Yet every leader should assume that sooner or later their organisation will face a crisis that threatens both operational performance and public trust. The operational failure may dominate the headlines, but it is how leaders respond in the hours, weeks and months that follow that determines whether trust is restored or permanently damaged. This is the challenge Vicki Brady, CEO of Telstra, is facing right now.

This week's Telstra outage, which disrupted mobile services and affected access to triple zero for some Australians, offers an important lesson in leading under pressure. While every crisis is different, the leadership principles that protect reputation are remarkably consistent. They can be distilled into three tests of leadership: acknowledge the problem, address the problem and act to ensure it does not happen again.

The first test of leaders is to acknowledge the problem

Customers expect organisations to apologise quickly, explain what happened as clearly as possible, and accept responsibility. This is not a task to delegate to a spokesperson. The CEO must be visible, supported by the Chair where appropriate, signalling that the issue is being taken seriously at the highest levels of the organisation. An apology carries greater weight when it is accompanied by an acknowledgement that the failure falls short of the organisation's own standards.

The second test is to address the problem

This requires more than fixing the technical fault, which Telstra did relatively quickly. Leaders need to explain, in language customers can understand, what went wrong, what has been done to restore services, and what safeguards are being put in place to reduce the likelihood of it happening again. Transparency matters, particularly when the full picture is still emerging. Stakeholders are generally more forgiving of uncertainty than they are of silence or defensiveness, which allows rumours and speculation to fill the vacuum. Given the Optus outage last year, Australians are understandably sensitive to failures affecting critical telecommunications infrastructure, making the reputational stakes particularly high.

By most measures, Telstra's response reflected several sound principles of crisis leadership. The company responded quickly, with the CFO communicating publicly within hours of the outage while the CEO was overseas, despite not yet knowing the precise cause. It continued to update customers as the situation evolved, accepted accountability, provided clear information about the impact on emergency calls, and explained the welfare checks undertaken for affected customers. Rather than attempting to minimise the incident, Telstra maintained visibility throughout the response.

One caution, however, is the temptation to declare success too early. Organisations understandably want to reassure customers, but credibility suffers if official assurances do not match people's lived experience. In a crisis, trust is strengthened by accuracy more than optimism. This highlights one of the hardest dilemmas in crisis leadership. Organisations understandably want to reassure customers quickly, but they also need confidence that what they are saying is accurate. On this occasion, Telstra may have declared victory a little too soon.

The third test, and ultimately the most important, is to act

This is where reputation is either restored or further damaged. Customers are unlikely to judge an organisation solely on whether an outage occurred. Modern networks are extraordinarily complex and, as Brady herself acknowledged, they are "not infallible". Instead, stakeholders will judge whether the organisation learns from failure and demonstrates meaningful change.

That means commissioning credible internal and independent reviews, being transparent about the findings, implementing improvements before regulators demand them, and providing evidence that lessons have been embedded. As Brady herself observed, "We know we have a job to do to rebuild that trust with our customers, and that is through our actions."

The real challenge begins after the headlines fade. Apologies are remembered for days, but actions are judged for years.

For Telstra, avoiding another major outage will now be just as important as responding well to this one. For every executive and board, however, the lesson is broader. Crisis leadership does not start at the beginning of a crisis, but much earlier by building an organisation that communicates openly, empowers leaders to act quickly, rehearses difficult decisions, and creates a culture where accountability is expected rather than feared.

The instinct during a crisis is often to appear infallible, yet the opposite is usually true. Leaders who openly acknowledge uncertainty, apologise sincerely and commit to learning frequently strengthen rather than weaken their credibility. Authenticity is not a weakness, but the foundation of rebuilding trust.

The leaders who emerge with their reputations intact are not those who never make mistakes. They are those who acknowledge problems honestly, address them transparently and act decisively so stakeholders can see that the organisation has genuinely changed. Leaders are judged not only by what organisations achieve when everything goes right, but by how they respond when the chips are down.

Will Harvey is Professor of Leadership at Melbourne Business School and the Director of the School's Sustainable Value Creation Institute. He is also the author of Reputations at Stake.