John Roese Has a Big Fan

Malik makes my point for me with his statement: “Our conversation was unusual in that we didn’t talk about hardware, the gear that his company sells.” John Roese is the master pontificator but seems clueless so far when it comes to Nortel execution.

exnt… you hit the nail on the head and I'm still laughing.

BB amen.

I have attempted to engage John on a number of topics. He seems content to pontificate and really is not engaged in his own blog. I have seen no glimmer of insight (or incite) from him outside of his firmware comfort zone.

You are bang on about the architecture. He seems comfortable at L1 and L2, but nothing above that. The real action is in the applications and their interactions. Edholm at least seems to realize this, although he too plays things far too close to the vest and I don't see any useful taxonomies, patterns or profound ontology's from him either.

Cisco is (IMO) most vulnerable in their applications software (quire plainly – it sucks). Nortel had (still has?) the understanding about how the higher layers work and might interact with the myriad of other applications. However, I don't count cisco out. They have the platforms in place (market share), they are not stupid and will get better at applications very quickly.

Nortel seems content to think it is all going to happen tha the device. My sense is that the three tired browser-client-server will be around for a long time to come, and there is *lots* of interesting stuff happening in the neetwork cloud and at the provider edge/customer edge.

Its hyperconnectivity boy, hyperconnectivity! You listenin to me? Why when I was a boy and CTO of Broadcomm, I invented hyperconnectivity, after I invented the Internet, IP, and the transistor! Boy, you listenin? Anyway, I invented hyperconnectivity, everyone connected to everyone, all the time, electronically, you know?! Its marvelous, stupendous, any fool can see that! Why they will probably give me the Order of Canada for it, maybe the Queen will knight me, who knows!! …………….

After reading this post and the latest on the Nortel Buzzboard, a simple way of explaining Nortel's dilemma occured to me.

The CTO office has lots of ideas, but no clue how to execute. They never talk in the context of Nortel execution or deliverables.

The Carrier and Enterprise business units know how to execute but have no ideas. They never talk about what's going on in the market and with only a couple of exceptions they're invisible at industry fora.

The sales teams don't have a clue what's in the pipeline – or what might be cut from the pipeline next quarter – so they're cautious instead of aggressive.

The large accounts are frightened by their dependency on such a long running train wreck. They throw a bone every now and then to ensure the customer support teams don't disappear.

Investors just look past all the hype to the bottom line. Is the business growing? No. Do we know where growth is going to come from? Maybe. Is it enough to replace declining businesses? Unlikely.

And who is accountable for all of the disconnect? Mike Z. And who is accountable for the Mike Z trainwreck? The board.

Mark – Why no mention of the hiring of Sanjay Jha by Motorola for their phone division President and CO-CEO ? Wasn''t Mike Z the head of this business during his stint at Motorola ? What does it say about the business unit that Mike Z left behind ? He wanted to be promoted to CEO of Motorola but the board didn't go for it. Several years later Motorola's business is floundering and has fallen behind in the handset business again to Nokia, RIM and Apple. In my opinion, this proves that focus on six sigma and the GE way at Motorola simply failed them because they fell so far behind in studying the market and technology. Sound familiar ? When will the board of Nortel wake up and look what the GE way has left in its wake ? Using manufacturing thinking and techniques simply doesn't work for technology companies. Mark – you are much too much the Nortel cheerleader and not good at reading or interpreting the industry

Yeah, you're probably right that I should have done something on Jha's appointment but it was a busy post-vacation week. Expect to see some more industry perspective posts going forward.

Mark

By the way, Canada is following the US into recession. Unemployment ticked up appreciably this week. The commodity boom will take a breather as the dollar recovers. The world is following the united states into recession.

bb – nicely stated. I agree completely. The GE-style is fine, but it isn't appropriate for Nortel. GE acquires businesses that are established and running well with solid executive teams. GE sticks a guy like choker Hackney at the top of each business to manage efficiencies (six sigma style) and monitor performance. If/when the business starts to underperform relative to other investment opportunities, the business is sold off and investment funds are moved to a new opportunity that is already on a growth curve. It's actually a decent system for a big holding company and MZ and his GEniuses are probably perfectly appropriate leaders for that kind of business.

If Nortel's issue was purely one of operational efficiency, this model would be beneficial for Nortel too, for a short period of time. But Nortel's troubles go way beyond operational efficiency. The business units aren't already being led by industry names and the core revenue engines are eroding with no new replacement on the near-term horizon. The GE model would dictate selling off at least the Carrier business and moving the money to something else. Ooops…that doesn't work with a company like Nortel. It doesn't have the right kind of brand.

So what to do? Mike Z recognized that his leaders knew a little bit about the business but were underperforming on execution. So he replaced them with people who have an execution track-record but who know nothing about the business. He turns a problem into a bigger problem. I think Mike Z was extremely lucky at Moto. He arrived at the early stage of the RAZR growth curve and added some operational efficiency. His biggest contribution was not getting in the way of the RAZR program. wow.

I conclude that Nortel is an unfixable problem for the current leadership team. Not because they're bad people (well, I guess at least one of them is) but because they're the wrong people in the wrong roles. This is a BoD problem now. Things won't get better until the board acts.

many – I actually do think there are a number of ideas floating around in the CTO group…not necessarily original Nortel concepts…but ideas on the kinds of things Nortel could get involved with technically. The problem is that there is no skill set that knows how to turn the ideas into a product/portfolio plan with a credible monetization strategy that would be appropriate for Nortel. The business leaders in Nortel are manufacturing oriented. They're going to be no help to the CTO team in trying to figure out how to monetize Internet-based opportunities. In fact, I'm sure the business guys feel threatened, which ensures the disconnects between functions will stay in place. This issue predates MZ and Roese, but they've done nothing to fix it, IMHO.

Sigh.

By the way, look at the age of the board members. If they believed Nortel had a future, they would replace themselves with younger advisors who are more savvy about understanding hardware & software technology, applications and business. It would appear the board has been constructed to ask the Canadian government for a bailout as opposed to grow the company for the long term benefit of the shareholders.

many – one example would be the virtual world conferencing concept. Certainly not a Nortel-originated idea, but I see evidence that somebody in Nortel is thinking about how to add value to it. As we've agreed, the problem is that Nortel doesn't have the right people to figure out how to monetize or sell whatever they might come up with because it's out of the comfort zone.

I know longer know what the output of the CTO group is or how success is measured. Same goes for the CSO team.

ANW Project Chainsaw is a prime example of what I am talking about.

What is the practical and marketable application for Avatars in their business? I understand they are licensing this stuff, but is it simply improved voice? Is it the client? Why is this something more that second life with a nortel brand?

Where is it that they see it going? What's the vision/strategy/tactics/logistics?

To me, championing something is only the first step in the CTO responsibilities.

My guess is that they will throw it over the wall without due diligence on the part of CTO.

The disconnect between the CTO and strategy (read: CSO) runs deeper than most people really understand, especially when one considers how the CTO actually ended up at Nortel. John Roese, you’ve been a bad boy and JUDGEMENT DAY is ‘a coming!!! Better eat your Whitties!!! –bb

many – and how about rewarding BU Presidents that take new ideas to market and firing those that don't. Growth is now like air to this company. If Nortel doesn't find growth, it will die. Each President should be measured on how much air they've supplied. Selling more of what they already produce doesn't count – that reward goes to the sales team.

ANW I like it. Perhaps you are the future nortel CEO?

BB – I agree. The CMO strategy is too transparent and the CSO/CTO not enough.

many – appreciate the humor but anybody would be a fool to replace MZ without a major BoD refresh. Nortel is a big, big, problem. We need to see board shakeup and cabinet cleansing before things will turn around.

CTO and CSO are both irrelevant, IMHO. Show me ONE thing that came from either group in the last 5 years that is a revenue engine. I think both functions are needed so I'm not advocating that either should be abolished, but current leadership is clearly ineffective when measured by output. Flush.

The CMO function is interesting. The new campaign looks exactly like a clone of Clent Richardson's campaign to me. If there is a major difference then I argue it takes a marketing expert to see it and that means it isn't significant to the market.

Nortel is a sick puppy.