This month I had the pleasure of sitting down with two of Nortel Networks’ marketing and communications people. The three of us acknowledged what a tough job they have ahead of them.
These two women have the task of turning around the negative perception of Nortel.
At one time the company
was known as a technology innovator, and in some respects it still is. Competitor Cisco Systems has acquired most of its technology, while Nortel grew organically during Jean Monty’s reign.
As Nortel announces more staff cuts — 3,500 just last month alone — and the company faces a criminal investigation by the RCMP, I wonder what went wrong. Most pundits will blame the poor economy, but I think it lies squarely on the shoulders of former CEO Frank Dunn.
Dunn believed Nortel should concentrate its efforts in the U.S. and basically ignore Canada, to forget that more than 95 per cent of its stakeholders were Canadians. I will never forget when a Nortel executive from Richardson, Tex. visited me a few years ago and said in a heavy southern U.S. accent how proud she was of Nortel’s Brampton, Ont. roots. With respect to my many American friends, it was totally unbelieveable.
Dunn also basically ignored the channel in this country. Meanwhile, Cisco cultivated its channel and raised the bar in terms of its partner expertise. It also raised margins significantly. The result was that the leading solution providers became loyal Cisco partners, while the rest sold Nortel and others.
This was a serious mistake on Dunn’s part. Instead of playing the commodity game, slashing prices and going direct, he should have stuck it out with the channel.
Also, Dunn created friction for Nortel and its stakeholders because he wasn’t in Canada enough. I am glad that new CEO William Owens, a native of Seattle, has decided to move here.
This may be cosmetic, but I think it is a positive first step in the company’s resurgence.
Another step is talking to the press. Under Dunn’s regime reporters were persona non grata. Owens not only has agreed to talk to reporters, he seeks out journalists from technology magazines. This has always been a bone of contention for me. Our audience is interested in what Nortel does from a business perspective, while readers of our sister publication, Computing Canada, want to know what the company is doing from a technology point of view. Shutting us out over the years, while competitors such as Cisco curried our favour, put Nortel behind in the information delivery game. So the company has to play catch up, but at least it realizes that now.