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Nortel CEO Maps Out His Vision

People matters
Zafirovski has already hired and fired extensively in the top tier of management, but he said he still has more to do. (See Nortel Poaches Juniper Strategist, Nortel's Clent Came & Went, and McFadden, Spradley out at Nortel).

There are still four key management positions to be filled: CTO, CMO (marketing), president of Asia, and president of services.

The CEO is also revamping Nortel's organizational structure. "This is a very complex organization, and decision-making is not where it needs to be... We have 10 layers of management, which is crazy. We'll be taking that down to six."

And the troops need reassuring, too. "There's a level of anxiety about where we're going next," which is being addressed in the current overhaul, noted Zafirovski.

Customers and contracts
The CEO is, not surprisingly, keen to crow about recent successes, including a significant piece of the next-generation wireless infrastructure action at Cingular Wireless . That's a "big contract that no one [outside Nortel] was expecting us to win," he bragged. (See Nortel, Cingular Ink Deal.)

What about India, though, where Nortel landed itself with a loss-making account at Bharat Sanchar Nigam Ltd. (BSNL) ? Will Nortel go back and bid for the second phase of network expansion? (See Mega BSNL Contract Looms.)

There were "big mistakes in analyzing that [BSNL phase one] contract -- we're not going to repeat those mistakes," said Zafirovski, who added that any further deals would have to be profitable, or Nortel wouldn't get involved.

He also noted that Nortel had "10-plus major customers that make up a big part of our business," including AT&T Inc. (NYSE: T) and Orange France . As for getting a foot in the door of major NGN contracts where Nortel had so far failed to make any impact, such as at BT Group plc (NYSE: BT; London: BTA) and Telstra Corp. Ltd. (ASX: TLS; NZK: TLS), he said talks were ongoing, and that such major network transformation projects were still at their very early stages. "This is a marathon... [Nortel is] looking to see how we can add value." (See BT Unveils 21CN Suppliers and Telstra Unveils Switch to IP.)

— Ray Le Maistre, International News Editor, Light Reading

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Stevery 12/5/2012 | 4:05:09 AM
re: Nortel CEO Maps Out His Vision
After watching this guy (from the peanut gallery), I have to say: it sounds like Nortel has a hope of the turn-around with him. Causing change at the top, setting clear financial/market goals...

It's all textbook leadership, but so few do it well. Would love to hear opinions from the inside.

Aside to LR/Ray: When did the 2 page articles start? For pete's sake, make that link to page 2 more pronounced. Who knows how many words of wisdom I've missed in other articles.
flam 12/5/2012 | 4:05:08 AM
re: Nortel CEO Maps Out His Vision His credentials appear to be good too - GE and Motorola. I hope that mix means that he has the right combination of ruthlessness and process focus to whip the competition's butt.

Between NT and LU, only one should survive. My money's on NT at this point.

opticalman 12/5/2012 | 4:05:07 AM
re: Nortel CEO Maps Out His Vision Mike Z. is definitely making an impact with the troops. It has given them hope that with better focus, Nortel can compete more effectively in the markets with greater potential to succeed.

His operations background and the people he has brought on-board are straight-shooters with a fresh perspective on how to run a world class organization.

The interesting part is what BU's are axed.

Best of luck.
Metropolitian 12/5/2012 | 4:05:06 AM
re: Nortel CEO Maps Out His Vision Mike Z. is definitely on the right track.
He has the potential to be another Jean Monty.

It will take an enormous amount of effort to undo the damage done by past CEOs: The reckless acquisitions made by John Roth and the quagmire of scandal brought on by Frank Dunn.

I agree with the two major steps he has taken so far:
1) He started to clear out significantly the dead wood at Nortel at the upper and middle levels. Unfortunately, Bill Owens did not have the courage to rock the boat and do this properly during his tenure.

2)He seems to have recognized that to compete in telecom you either have differentiate yourself by price (i.e. Huawei) or by innovation. I am glad he seems inclined towards the second option with his focus on R&D spending.

He has made one mistake so far. The joint venture with Huawei seems doomed to failure.
Who is really the winner in this deal ?
Not Nortel. Remember what a mess the last major JV turned to be when Nortel had partnered with Motorola about 10-15 years ago in the cellular arena.


ufo 12/5/2012 | 4:05:04 AM
re: Nortel CEO Maps Out His Vision Mike Z. promoted nothing but Six Sigma junks while at Motorola. Totally useless, troops hated it. Hey, do they really talk "big X and big Y"?!
ecipo 12/5/2012 | 4:05:02 AM
re: Nortel CEO Maps Out His Vision seems Nortel will be much smaller than it's now (I the number of markets they are in). a great chance for the competitors to increase market share.
Metropolitian 12/5/2012 | 4:04:59 AM
re: Nortel CEO Maps Out His Vision >>> I lay most of the blame at the feet of Clarance Chandran. Almost all the really big mistakes were done while he was CEO in all but name. In 2000 and the end of 1999, John Roth was in semi-retirement. <<<

Ulimately, the CEO is responsible for all the actions of his underlings. By doing nothing, signalled that Roth was in full agreement with Chandran's actions and decisions.

>>> As for Frank Dunn, whatever else he did, he saved the company. Nortel nearly perished in 2001. <<<

I disagree with this statement completely. What Dunn did, was to put a once highly respected company (that shared Cisco, Nokia & Motorola as its peers) and permenantly pigeon-holed it with the same corrupt group as Enron, Worldcom, Imclone & Adeplhia. Nortel will forever be remembered for this scandal, despite all the great things it did before or after the scandal.

Just look at Exxon (and the Exxon Valdez disaster) or Union Carbide (and Bhopal). These events are still associated with these companies 17 and 22 years later, respectively.

chook0 12/5/2012 | 4:04:59 AM
re: Nortel CEO Maps Out His Vision Actually I lay most of the blame at the feet of Clarance Chandran. Almost all the really big mistakes were done while he was CEO in all but name. In 2000 and the end of 1999, John Roth was in semi-retirement.

As for Frank Dunn, whatever else he did, he saved the company. Nortel nearly perished in 2001.

--chook

------------------------------
It will take an enormous amount of effort to undo the damage done by past CEOs: The reckless acquisitions made by John Roth and the quagmire of scandal brought on by Frank Dunn.
litedope 12/5/2012 | 4:04:58 AM
re: Nortel CEO Maps Out His Vision Monty was one of the best CEOs in big Tel-Netcom equip/service vendors. Not sure if the new CEO can match him.
A side note: Monty had his lunch in cafeteria very often, just like a regular employee. After he left the post, never saw Roth again ;-) in the same cafeteria. Agreed to the chookGÇÖs comment on Chandran.
DPD 12/5/2012 | 4:04:58 AM
re: Nortel CEO Maps Out His Vision Ed Zander, current MOT CEO is much better than Mike Z. He is doing what Mike Z. couldn't...that is, turn around MOT.
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