FireMr.Z

What to Expect from Nortel in '09

Nortel was a decent company until the CEO incompetense parade lead by John Roth. Mr. Z is just latest overly paid CEO with an even bigger ego, leading the same sad parade of his generation. Add to the disfunctional era, board members on so many different boards involved in so many activities they can not provide sound governance.

Nortel's problem is that it was one of the many victums at the end of a generation of management only interested in what they could earn on the way out to retirement. There was no restructuring plan, it was purely resume stepping stones, paychecks and bonus stops for Mr. Z and his insiders. One more [big] CEO bonus pow-wow to go for M&A, now that most of the big indians are all gone.

This is not rocket science, had there really been a real restructuring plan; It would have been acompanied by a real marketing plan. C'mon!

Nortel News: Rethinking Bay Networks Acquisition, Delisting Threat

In the final analysis, Nortel Networks became the General Motors of Telecommunications Manufacturing.

What Would John Chambers Have Done for Nortel?

Considering Cisco has 70 - 80% of marketshare vs. Nortel in the single to low double digits. The net loss of Nortel's marketshare is far more substantial to Cisco's loss of marketshare, in terms of strategic brand importance in the hearts and minds of IT professionals.

Long after this economic crisis is over. The global community will still be saying I want to buy a 'Cisco' [Router], as they do in Latin America. Little if anyone says I want to buy a 'Nortel' when it comes to brand recognition, unless it is practically given away.

The true test of a brand is its ability to retain value, which ultimately leads to the purist form of marketshare...

my 2 cents.


On Nov 26 09:53 AM Keldogs wrote:

> Just curious -
> What is the total loss in terms of percentage of Market Cap -- Is
> it possible the NT lost a bigger percentage of it's total than Cisco?
>

What Would John Chambers Have Done for Nortel?

I completely agree with your assessment regarding Nortel's fundemental lack of marketing expertise. I remember the hard time a certain CMO [from Apply] had changing hearts and minds at Nortel with respect to real marketing tactics. In the end, he just got the good o'le Nortel nodd for his efforts. A true waste of proven talent and a major waste of opportunity.

However, I would argue that marketing all be it in a minor part of the company at the time was alive and well in the Enterprise Business Networks leadship category. Classic examples of Meridian Mail customer partnering did a fair job of implementing customer driven features, and eventually leading to the only unified messaging application with a separate voice/fax message store from email. Which was later copied by Avaya and Cisco, long after Nortel dominated marketshare. Even the SL-1, Meridian 1 and CS 1000 was largely customer driven on the feature side of product development. Still, too much of marketing was spees and fees driven in the end.


On Nov 20 01:04 PM Keldogs wrote:

> The major change Chambers would have brought to Nortel is a cultural
> one – being marketing. One thing Chamber's knows is that the best
> technical solution is NOT needed to be the winner.. Just as Ray Norda
> knew how to propel Novell over the technically superior Banyon. Chamber’s
> is well aware that while Cisco does not have technically superior
> gear – he has created the Cisco image - everyone knows the name,
> students at high schools, colleges and trade schools are being taught
> the CLI and technology - and created the "no one gets fired choosing
> Cisco" mantra. John did that while competing with companies offering
> a more scalable and extensible architecture.
>
> The fall of Nortel and it’s gene pool (which includes Synoptics,
> WellFleet and BayNetworks) were all engineering driven companies,
> all of which have/had the failed philosophy that the best technical
> solution wins..
> While I agree with many comments of what changes are needed inside
> Nortel –I believe Chamber's biggest challenge and ultimate victory
> would happen by making Nortel in to a Marketing company... creating
> a culture where customer requirements actually take precedence of
> some technical Phd buried in the labs and being out of touch with
> the customer base.. I have two examples – 1. Wellfleet routers while
> technically superior to Cisco did not have a CLI – the techs rebelled
> and always purchased Cisco. 2. Synoptics tech founder was bent on
> ATM and refused the sales departments (screaming) requests to put
> an FDDI connector on a 10mbit enet swich – all because ATM was the
> technical direction of the day --- Two classic examples where technology
> was allowed by CEO to ignore the market…. Chambers would not have
> made that fatal mistake..

What Would John Chambers Have Done for Nortel?

Meanwhile, executive greed continues to plunder Nortel as insiders cash in their early holiday bonuses.

Really, no kidding! Go look at the ' insiders transactions ' on the Nortel ticker page...

... can you believe this group of managers actually believe they deserve a bonus after their 3Q performance and the company just announced salary freezes?

Hey, I know; lets sink employee moral down a bit farther just in time for another xmas layoff session. Why make the holidays even remotely fun for the have-nots in the company, their lucky to keep their jobs, right?

What Would John Chambers Have Done for Nortel?

What really frustrates me is the spineless board of directors at companies like Nortel and across America that write ridiculous senior management hiring contracts without consequence for lower share-holder value. Even more ridiculous is share-holders often vote to approve these illfated hiring agreements, like their visionaries to market success.

Since when does a corporate executive warrant a severence for failure to execute a successful business plan? If a wanna-bee CxO wants a leadership role in a company, they should be willing to bet their compensation on their personal success in my opinion.

I hope the day is near when a new crop of senior talent comes into power with integrity of success. Pushing-out and nulifying the existence of the 1990s and 2000 erea executive whose track-record for success is dismal to say the least. I think that would make for interesting cocktail-party gossup, where legacy executives mingle with the new age of responsible management.

What Would John Chambers Have Done for Nortel?

Actually the real issue with Nortel is middle management from Director to VP and GM. This level of management speak in the 100,000 foot view, take little to zero risk and avoid day to day operational responsibility like the plague for fear of bonus impact. Senior management is so detached from daily operations it is not even funny, so get real!

I witnessed many a VP promote grand ideas such as outsourcing, only to have key details come back and bite the company in the ass. Leaving the worker bees to fight-fire preventable issues while distracting the business of winning business.

Accountability is completely abscent at Nortel, so long as a good idea looks good on paper while being implemented. The spinner of the idea typically goes off with bonus or options in hand to disrupt another business unit or department, with little or no copability to previous duties.

Profitable product lines are bled to bolster under-performing product lines purely in the name of intra-business politics and power grabbing. Business units routinely undercut eachother in the name of marketshare rather than colaborative winning strategies.

Until you've actually worked at Nortel for any length of time, which in its hay-day used to be the funniest company to work at, most of you have zero understanding of what the reality on the ground is all about...

...moral is shoot

...management is a joke

...layoff pkgs are salvation

I wish all the pundits would look at companies from the zero-foot level instead of trying to be a virtual CEO!

Nortel: Is it Time for a Change At the Top?

The real un-told story of Nortel is the employees, past, present and future. Everyone is so fixated on the management. I wonder how many Americans realize that Canadian Nortel employees are forced to invest a significant portion of their company retirement in Nortel stock?

How hard it must be for Canadian Nortel employees to stomach working for the company that is not only failing their career, but, failing their retirement as well.

Not like an Enron that was a quick death, this is a slow agonizing cerbal hemorage on a monumental proportion for the average Canadian employee.

Do you think we could think about ythe employee for a change...?

Nortel: Is it Time for a Change At the Top?

I believe the demise of Northern Telecom was when it was taken over by Bay Networks. Until that merger disaster it was a terrific place to work, but, today it is the worst place to work. Why would anyone invest in a company where its employees are so un-happy, they hope for a lay-off package? All you have to do is compare the insider transactions to see management getting their fat bonuses. While the employees get little more than stress-related mental break-downs for being over worked while their saleries loose ground to cost of living as they work from round to round of lay-offs.

If anything, Nortel should be the key business school example of how to ruin a company and demoralize employees...

Nortel: Is it Time for a Change At the Top?

Poor Nortel, it never recovered from the tech bubble-burst and it has let go of most of the legacy talent that made the company great. Nortel has become a sweat-shop of process, and lacks the support of products that made it profitable. Suffering from a stream of management decisions without accountability, the worker bees get the shaft and the senior management get the bonuses. Bell Northern Research has become the bell weather of dysfunctuality...