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Q&A with Mike Z.
By Mark Evans | July 30, 2007
The Globe and Mail has a Q&A today with Nortel CEO Mike Zafirovski. One of the first questions is: “Do you pay attention to all the noise, such as the blogs that focus on Nortel?”, which makes me wonder whether the question is referring to All About Nortel. 
Sadly, Mike Z. deftly sidesteps the question by saying that “It does good to create jobs for people. With all those blogs, it is another way we are helping the Canadian economy.”
For the life of me, I have no clue what he means. I guess I was hoping he’d say something like “I love blogs, particularly All About Nortel because it’s so insightful”. One can dream, right?!
Anyway, one of the more interesting questions was whether Nortel has to make an acquisition given the speculation it made a bid for Avaya and may be interested in 3Com. Here’s what Mike Z. had to say:
“With respect to acquisitions, 80 per cent of them fail. But I’ve done 80 to 90 acquisitions in my life and I’m pretty comfortable that the majority were done well. I’m not prejudiced on where growth is going to come from - organically or through acquisitions. But we are committed to growth, and we have earned the right. Last year, we did not have the systems, the foundation, the processes to manage our company well, let alone integrate somebody else.”
If you boil down his answer, I think he’s saying “maybe”…or “yes”…or “no”.
Topics: Uncategorized |
July 30th, 2007 at 7:35 pm
This is another sign that Nortel’s management just doesn’t get it. Blogs are the way the current generation of new workers, customers, suppliers communicate with the world. Its obvious from his references to Jack Welch that time has passed Mr Zafirovski by. Nortel will never be able to become a great company again unless it embraces the new ways that younger workers now live and work, from the top of the company all the way to to the bottom.
July 31st, 2007 at 5:24 am
You mean like embracing Unified Communications through an Innovative Communications Alliance with Microsoft? You mean by their CTO starting up his own blog for the first time ever? etc etc The guy makes a bit of a joke and all of a sudden it’s a sign the management don’t get the world of today…. give me a break.
July 31st, 2007 at 7:39 am
The one main thing he said that I wholeheartedly agree with is “Also, Nortel used to have some of the best processes in the world in developing people, communications, and developing products. But in late 1999-early 2000, there was the view that the market was moving so fast, if you had a structured process, you’d never be able to keep up with the newcomers. So a lot of Nortel’s old processes were thrown away with a view to having a faster, go-to-market process.”
Nortel *did* throw away world class development and vendor-customer interaction process in favor of some IT guys wet dream. The bottom line: They lost their way.
July 31st, 2007 at 9:44 am
BIG $300M win for Nortel Government Solutions.
http://www.fbo.gov/spg/SSA/DCFIAM/OAG/Awards/SS00-07-60066.html
July 31st, 2007 at 3:52 pm
many….
I laughed at that part in the interview, LOL…processes!
I have been on the wireless division of Nortel since 1994, and know all about these processes Capt. Z speaks of. They came from the Wireline side of Nortel. When i think of the Wireline side i think of a Union of people. Nothing gets done very fast, and in my opinion that is why those processes were not used very often.
The Wireless side of Nortel came fast and keeping up using the existing processes was not going to work when jobs needed to get done fast! You cannot “shut the job down” because you are missing some bolts and wait a week to get the parts, PMs were not on a budget and had to get the jobs done quickly to me dates. This, of course, was not cheap….money was wasted right and left, but jobs got done.
I worked with alot of guys from the Wireline side and their mentality was not to get the job done but to do whatever it took to avoid the work, and yes, “shutting the job down” was heard so many times its incredible. I heard more about how many years they had been with Nortel and how they patted themselves on the back about what they have done, but when it came time to do the work, they didnt know what the F they were doing…LOL.
So I hope you understand my opinion of what Capt. Z says about the processes, the ones in place were not working for the fast pace Nortel was moving, but there needed to be something there to get some organization.
July 31st, 2007 at 7:44 pm
he did an interview on BNN too. Some of his answers to similar questions make them sound a little rehearsed. The answer on acquisitions (”80% fail”) is obviously a canned answer…
(this link probably won’t work past thursday)
http://www.bnn.ca/shows/past_archive.tv?day=thur
July 31st, 2007 at 8:21 pm
Still a Nortel Slave,
your comments on the wireless side of Nortel supports why Nortel screwed up in notable international markets like Brazil at such local accounts like TIM(if my memory doesn’t fail me)
July 31st, 2007 at 11:40 pm
Unifed Communications and the Innovative Communications Alliance is all you can come up with ? Can you name one company (not named Cisco, Google or Yahoo) that DOESN’T have an alliance w/ Microsoft ? Nortel is just another partner in Microsoft’s ecosystem….not the other way around as Nortel management would have you believe. Let’s face it - its Cisco, Google, Microsoft and IBM’s world and the everyone else including Nortel is just living in it.
I give the CTO credit for bringing a youthful feel, renewal and energy to the perception of the company by the market. Mike Z seems to just be a figurehead in all of it. He can claim credit if things go well and have plausible deniability if the rest of company doesn’t execute. He just seems to be a little distant and removed from running the company these days despite having the title of Chief Operating Officer.
Regarding the process piece, its funny he mentions the Motorola phone business. The reason that business temporarily turned around was b/c of the Razr which was developed by a rogue group which followed little process at Motorola. Essentially that group was a one trick pony which Mike took credit for. I guess he doesn’t deserve any of the blame now that that business has fallen on quality issues despite the product not having changed much since he left Motorola.
The quote “These things do not happen overnight” looks like another way of saying to the board “Please give me more time.” Even the point that the static “does not affect me” tells you Mike Z is out of touch. He doesn’t seem to realize that this blog does affect Nortel.
August 1st, 2007 at 10:33 am
Still a Nortel Slave,
These processes (mostly from BNR) were integral to Nortel successes and market share. I don’t think that the basic value of these processes has changed in the marketplace today. True, they were abused by some.
The ones that came to my mind when I read zafirovski’s statement were the PRS process where there was traceability from a problem report (customer) all they way to design and ownership end to end with a formal response required. This built customer loyalty and kept designers from retreating to the ivory tower
The development process that was the first to do multi-site, multi-timezone, multi-cultural software development. This process also had feedback loops and documentation into the standards bodies and early notification of changes that potentially affected the customers network. This allowed people to plan rather than being unpleasantly surprised. This was a good thing.
The problem I have with what nortel put in place to replace them is that they sacrificed the most important aspects in the name of speed. Fast is not necessarily good and nortel sacrificed good for fast in a big way.
I think that one of the reasons nortel failed in a big way on the wireless side because there was a lot of cowboy development, adventures in marketing and miscommunications with the customer. I agree that there must be lightweight process for rapid enterprise development and vertical markets, but the value and reason for success still must be understood and captured.
I am on the wireless service provider side now and I am exposed to all of the vendors products and processes, believe me when I tell you that one of the reasons nortel is selling product at all is there is still some semblance of predictable process.
I disagree with your generalization about people, but that is another subject.
August 1st, 2007 at 4:37 pm
The real question is: what has Mike Z done in almost two years with Nortel? The financials are not good, the stock price is lower than when he joined, and there are few signs of cool new products. Processes, the new management team, and strategy are means to an end: enhancing shareholder value. So far, shareholder value is heading South. If we broaden our corporate success criteria to include employee satisfaction, the results are also not good: layoffs and outsourcing.
August 1st, 2007 at 8:26 pm
yut iope
I tend to agree. Zafirovski is a delivery boy not a visionary this is not a bad thing, just that he needs to be COO and not CEO. His credibility is shot because of the hypocrisy surrounding his buddy hackney. OTOH, Roese has some good ideas and credentials. I know NT has the technical talent, it just needs to start pulling in the same direction and stop putting their ads in airports.
I will say I am happy to see him make statements that they are going to focus, however I have seen little walk to match the talk.
I think they have an opening. ALU is having trouble because no one is sure (even ALU) which of their duplicate products are going to be cut.
Ericsson is weak and slow in all areas from the RNC into the core network.
Cisco is well….. crisco…..slippery and expensive.
Juniper is having troubles and MPLS is losing traction.
Tellabs has a great product but is stretched too thin to support it.
I could go on, but NT continues to flounder and not capitalize on competitors mistakes, or find partners where they are not competitive for end-to-end offerings. Too bad.
August 2nd, 2007 at 1:21 pm
It is frustrating to watch Nortel fail to capitalize on a market ripe with opportunity given the assets Nortel could still leverage. Mike Z clearly doesn’t know Nortel’s market and hence can’t set direction. The new recruits are the wrong people. The CSO is invisible and so far the CTO is all talk and no plan. I can’t believe Hackney is still there - he’s a lawsuit waiting to happen. Get your money out while you can. As long as the current leadership team is in place, this is an over-valued stock.
August 2nd, 2007 at 4:55 pm
to Still a Nortel Slave
i have been on the wireline side for 20 yearsa nd just this year was assigned to the wireless side and i can say that the WASTE is on the WIRELESS side.. 8 months in my present assignment i have worked i say WORKED only 4 months, paid for 8… all i see is chaos and lack of consistant work flow to support the personel.. yes, missing parts and miss ordered parts have plaged us, but the wirless side is far worse on this front than wilreline, optical, and enterprize..
but, ‘Still a Nortel Slave’ sharks and aligators don’t feed on thier own.
joel hackney says ‘if you don’t like it here, leave’
August 3rd, 2007 at 11:23 pm
Casual Observer,
While Microsoft does have partnership arrangements with other companies (just as Nortel is partnered with other companies like IBM on UC), the relationship with Nortel is unique. It is the only one where joint R&D is being conducted (only 3 companies have badge access in Redmont, Intel, AMD and Nortel), the only one with a joint go-to market strategy (Nortel and Microsoft Sales Teams jointly marketing and selling product), and many networking engineering services are delivered via Nortel Professional Servicies. So it does go well beyond the standard interop agreements the Microsoft has signed with other PBX vendors. It also helps that Mike Z. and Steve B. are old friends.
August 5th, 2007 at 1:25 pm
Okay Spotticus,
I’ll give you that its somewhat a different relationship. I honestly think it could be a prelude to Microsoft acquiring Nortel outright in their war against Cisco. As we head into the next downturn, Nortel’s market value will decline relative to their true long term value in the network and enterprise market space. This would make them a ripe acquisition for a struggling giant like Microsoft as the networking market continues to diverge between the haves (Cisco) and have nots (everyone else). It just seems the entire market needs further consolidation because no one other than Cisco appears to be executing their plan well.
I find it hard to believe Mike Z. and Steve B. are “old” friends. One was woven from the frat boy crew that played sports in college and attended school in Europe, the other was a geek who was part of a tech company with a friend of his name Bill.
August 6th, 2007 at 8:15 pm
Casual Observer,
I would be interesting for sure, Microsoft definitely has the cash to buy Nortel if it desired.
As for the old friends, that is what I’ve been told (mind you it was from a marketing guy in the Innovative Communications Alliance, so make of it what you will). I would love to hear more details on Mike’s background, I’ve got the usual corporate bio stuff, I know his family immigrated from Macedonia and we went to University in Pennsylvania before joining GE .