Primed to play in tune with the Scottish Parliament

They reflect BT's recognition that it has become too centralised, too distant from employees and customers.

And they signify that one of the nation's hugely important companies is thinking harder not only about its shareholders, but all its stakeholders.

The move in Scotland, and at least some of the momentum nationally, is being spearheaded by BT's new Scottish director Doug Riley.

He says: ''Out of our two million customers, one assumes that they voted three to one for devolution, and they expect us to respond to the political reality in Scotland.''

Next month Riley hopes to unveil an ambitious reorganisation of BT Scotland. Its mission is to reverse the drift of control across the Border, engage with economic development in tune with the new Parliament, target the group's community activities more into disadvantaged areas, and remotivate staff who feel BT has become an impersonal downsizer, rather than a caring innovator. And in so doing, to strengthen BT's competitive position.

Riley says: ''We have brought a lot of call centre type work here. But a lot of really senior jobs moved south. I am reversing that trend.''

Riley is a refreshingly frank, broad-Yorkshire speaking incomer who won European awards for his management revolution in BT Northern Ireland, where he also chaired the CBI's cross-border initiative with the Irish Business Confederation.

''I have had my 100 days grace, and I have now got a very clear view of what needs to be done,'' Riley says. ''I have been down to London and had some long and interesting discussions with the group managing director responsible for BT UK (new chief Bill Cockburn) and we have an agreement internally for the first time on exactly how Scotland will be organised and managed.'' The first novelty is a business plan for BT Scotland.

''We used to have a geographic organisation and it worked very well, but times changed. As you got ubiquitous service, people wanted to know exactly what they were getting, and the way to manage it was not by regional fiefdoms but by single products.

''When you are being regulated at RPI-minus, and it goes up to RPI-minus 7.5%, we were in the process of reducing our tariffs, our profit, by #600m a year, for a company making #3000m a year. We had to drive costs out of our business.''

But in many ways the pendulum appears, even to Riley, to have swung too far. ''Times have changed again. Now we have regionalisation. Our customers are now looking for a local and a global service. They are also looking for local customisation, which is not the same as (service) being completely different.''

Competitors such as ScottishPower's Scottish Telecom and Atlantic Telecom have hit BT where it is vulnerable with their Scottish tariffs. So at one level, BT's response will be crudely market reactive.

But Riley says: ''We are going to look at having a genuine Scottish sense of identity in dealing with our customers and putting back into the community. We are going to get very involved in economic development, and we are going to react to the Parliament, because Scotland's success and BT Scotland's success go together. Everybody is coming round to that now.''

On senior jobs, he says: ''There will not be a massive new structure in Scotland, but we will be putting back some of the jobs that relate to BT Scotland.''

Riley says employee concerns voiced by unions have some validity. ''A lot of them feel management decision-taking is done outside Scotland. In some cases it is true and in some cases it isn't, but it is still how they feel. Lack of career path is another thing we can fix quite easily.''

By ensuring that responsibility for running employees' performance target regimes is seen to rest with local management, ''we can quite quickly turn round perceptions,'' Riley insists.

He says: ''The further away you get from your management the more impersonal it is and therefore the harder it seems compared to dealing with someone day in day out.''

On the negative reactions of staff to the performance regime, Riley says candidly: ''I am not surprised our people feel like that. That is one of the things we have to get back.''

Is the regime too tough? ''A lot of it is that we have failed to explain why we have to do what we are doing. We have got to get costs out and revenue up. Undoubtedly we have concentrated too long now on getting costs out and not concentrated enough on growing the market. That's where innovative products and services designed for Scotland come in.''

On training, Riley says: ''We are totally committed to the New Deal. When Ian Robinson came to talk to me about it I said 'what's different, are you going to take the screens away, give people a cup of coffee, treat people as though they are included, not excluded?' Unless you do something about genuinely breaking that cycle of a person's self-esteem, you have had it. Welfare to Work is the first time a government is taking a holistic approach and making a serious attempt to do something.''

Intriguingly for BT's huge community budget, Riley says of Northern Ireland: ''If you start to genuinely address the social issues of exclusion and long-term unemployed, then you would start to make a change and I think that is just as true in Scotland. Increasingly I think we will see our community type things move towards that.''

He says much more accurate diagnosis of line faults is needed to reduce costs, while network service packages offered at different price levels are now on BT's competitive agenda.

And what of BT's formal mission statement and values, put in place by Sir Iain Vallance 12 years ago?

''It is probably time to revisit some of that.'' The values could perhaps be refreshed, and that should be done by talking (and listening) to people.

''Some of the things we say we do, we do really really well. Some of the things we say we do we have let slip.''

Simon Bain

The Verdict

BT has all the hallmarks of one of Britain's most enlightened and respected companies. But like other giant corporations which split themselves into profit centres and business units, it is now an agglomeration of mini-companies focused on their own short-term goals. One former managing director of a large corporation says: ''What happens is that the corporate glue comes unstuck.'' BT Scotland is in the vanguard of a move to glue BT back together. Longer-term commercial and financial goals for shareholders can only be met if the group now concentrates on growing revenue as well as cutting costs. BT appears to be recognising that to do that successfully, it's good to talk to all your people.