A DOG-EARED piece of notepaper is tucked away in the desk of Sir Christopher Bland, chairman of BT Group. It has been there for all but 10 days of his four-and-half years at the top of the company, and has become not only his lucky talisman but a succinct lesson in corporate turnrounds.

The faded blue writing sets out a list of 10 items: “Rights issue. Sell Japan. Sell Spain. Sell Yell. Demerge Wireless. Unwind Concert joint venture. Sell and lease back property. Reshape group board. Appoint new chief executive. Sell Cegetel stake.” In the top right-hand corner is the number 29, followed by nine zeroes.

This was Bland’s plan to rescue the telecoms giant, which seemed in an unrecoverable nosedive when he joined. BT had a bad dotcom boom, engaging in a rash expansion drive that left it with a crippling pile of debt and an uncertain future.

The figure — £29 billion — on Bland’s note was BT’s overdraft. Eight of the 10 items (some of which he inherited) were fundraising measures aimed at reducing the figure to more manageable proportions. The rights issue and disposals were pushed through in double-quick time. The other two points — reshaping the board and changing the chief executive — were also tackled rapidly.

The list is now often cited as a masterclass in the art of corporate restructuring, but Bland himself said the 10 items “weren’t terribly profound”.

Bland was recruited from the BBC — he chaired both organisations for about five months — to replace Sir Iain Vallance. Thanks to his talks with large shareholders and board members, he had a “reasonably precise” idea of what needed to be done. The list was produced after 10 days on the job.

“Everything on that list was aimed at getting that overdraft down. What I didn’t have a precise picture of was how easily and quickly the 10 could be achieved.”

Bland had one powerful ally — a sense that the company was headed for the rocks, and drastic action was needed. “There is no question that a crisis helps when you are trying to make change,” he said. “Crisis might be a slightly strong word for the situation at BT, but there was a change of top management. All the non-executive directors were changed and within a year there was a new chief executive, finance director, company secretary and, of course, a new chairman. So people knew we were not in a great state.”

The penultimate item on the list — the recruitment of a new chief executive — Bland described as the most important job for any company chairman. “If he gets that wrong, it doesn’t matter what else he does right.”

Bland is now full of praise for Sir Peter Bonfield, the incumbent on his arrival, even though replacing him was a priority. “He made a significant and, I think, underrated contribution. He was very active in the disposals programme.”

Searching for Bonfield’s successor, Bland and a small group of directors originally thought they would have to find a British executive. “If we had been asked what our ideal candidate was, we probably would have said someone who was British.” They ended up with a Dutchman, Ben Verwaayen.

The appointment raised eyebrows, as Verwaayen’s nationality, and time spent working in America for Lucent, meant he was a virtual unknown in Britain. This had its advantages.

“People didn’t spend a lot of time telling him that BT was a great British institution and it must be treated accordingly. He short-circuited all that.”

The crash programme of disposals and the management upheaval concentrated employees’ minds on another malaise — an industry-wide negligence of business basics. At BT, executives had forgotten cash generation and profits were important.

“It was a disease that swept through telecoms. It was part of the dotcom thing. Nobody looked at cash, everybody looked at ebitda (earnings before interest, tax and depreciation) and growth. Companies like Thus and Energis joined the FTSE 100 with negative profits, while solidly profitable groups like Thames Water, NatWest and Imperial Tobacco were being pushed out, and you thought: how can this be?” Bland’s list did not, he said, amount to a strategy, but was “a series of tactical moves. Setting the strategy was phase two”.

A strategic change on Bland’s watch was the embracing of broadband. BT under Vallance and Bonfield had regarded broadband as a distraction, a product without mass-market appeal. Bland had other ideas.

“I was converted to broadband by the cable companies. They could offer individuals a genuine triple play of telephony, broadband and television. If we could only offer a single play, they would eat our lunch.”

BT then sold broadband at £39.99 per connection and lost money. It was, said Bland, within weeks of bumping the charge up to £43.99. Now, under Verwaayen’s leadership, it has slashed prices and sells 70,000 connections a week.

Bland also had to deal with the government and regulators. When he arrived, there was considerable debate about a break-up of BT to encourage competition and anger in Whitehall about the company not helping the government’s vision for “broadband Britain”.

The break-up proposal was not just a paper tiger. Under the glamorous leadership of Robin Saunders, WestLB’s principal finance unit floated ideas for a £15 billion break-up bid.

Bland said: “We were convinced it was wrong. The bid obviously never arrived, and the pleasing thing is that now it is not seriously discussed.”

The embracing of broadband, and in particular the planned £10 billion, five-year investment in a “21st century network” to speed data through the telephone network, have helped answer governmental criticism. BT will launch a video-on- demand service next year, with movies sent down the existing copper-wire network.

Also exciting Bland is the “fusion” phone, which automatically diverts calls to the cheapest network. “If you have ever got the vapours when your teenager has stood beside your fixed-line phone making an expensive mobile call, then this addresses the problem,” he said. “It only works, of course, for companies like us that have a fixed-line network. We think it has the potential to be a really disruptive technology.”

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