Nortel: Still Waiting For Mike Z. To Deliver
In the wake of disappointing financial results and yet another 2,000 jobs to be eliminated, the spotlight - and pressure - is clearly on Nortel (NT) CEO Mike Zafirovski and his hand-picked senior management team.
For all the talk about revitalizing Nortel and Six Sigma (aka cost reductions), you have to ask what Zafirovski has really done over the past two and half a years. Nortel has made exactly one acquisition (Tasman Networks), dumped one major asset (the money-losing UMTS business to Alcatel (ALU)), chopped about 5,000 jobs, while moving others to lower cost countries such as Turkey, Mexico and China.
But at the end of the day, Nortel is pretty much the same as it was three years ago - a company trying to be all things to all people without a dynamic growth engine. (Note: it would be unfair not to give Mike Z. credit for navigating Nortel though the accounting scandal he inherited, and giving the company some financial stability).
It got me thinking
about what could have been if the Cisco (CSCO) Kids - Gary Daichendt (above
left) and Gary Kunis - had been given the freedom by Nortel’s board to
performance radical surgery on the company.
Their strategy would have seen Nortel focus on fewer businesses, which would have given it a sharper strategic focus and significantly lower R&D costs. At the same time, it’s likely the Garys would have sold a number of businesses, closed superfluous facilities and streamlined the books.
Unfortunately, their plans never came to fruition as Daichendt abruptly resigned as president and COO three months after he was hired after butting heads with CEO Bill Owens and failing to convince Nortel’s board of the new, radical strategic direction that was required. Soon after, Kunis, the CTO, followed him out the door.
Hindsight is always 20/20 but it would have been interesting to see what the two Garys would have done to Nortel.
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This article has 8 comments:
here. Hey, make sure all the new officers get a big bonus.
rver
Seriously. Moses coming down from the mountain couldn’t rescue this company.
In another case, one poor little guy was let go, and 3-4 people took over his responsibility. But they have no idea how those 3 apps work. The manager kept bugging that little guy, asking for knowledge transfer and even promised to give him $10k cash.
Now you know why Nortel has been kept going down?
r