A Troubling Communications Gap

One thing that’s become more apparent is the growing sense of frustration among Nortel employees.

Perhaps the biggest issue is the information gap between what the company is saying – or, for that matter, not saying – and the amount of information about the company from the court documents filed in Canada and the U.S.

It’s clear that some Nortel employees are spending time scouring these documents for information about Nortel’s structure, corporate structure and financial obligations. Meanwhile, Nortel seems have gone into proverbial hiding. Even Buzzboard, Nortel’s blog, has been silence other than this round-up of media coverage.

What many employees want is guidance from CEO Mike Zafirovski. Other than a video done when the company filed for bankruptcy protection, Mike Z. has disappeared. I’m sure he’s busy behind the scenes talking to suppliers, customers and investors but many employees are feeling increasingly abandoned.

Along with customers seriously contemplating alternative suppliers, the uneasiness of Nortel’s employees is a huge issue.

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  • NortelEmp

    I agree. My point, however, is that I don't think the CEO has anything to share at this point. I don't think he is in control and therefore communication from his office is moot. Although the argument is that Chapter 11 should not affect ongoing operations, it most certainly does. Just look at the filed documents. The company had to request permission to pay utility companies so they don't turn the lights off. That's probably a typically procedure in Chapter 11, but it points to the spill over between the structural issues and the company as a going concern. The company also had to petition to pay employees, benefits, 401K plans etc… and requested the freedom to change such plans in the future without going back to the courts. What is happening is very real. I believe that companies can most certainly come out of Chapter 11 but my guess is that those who are successful go into the filing with a well thought out plan already in hand. It seems that in this case a plan is being developed as we type, which would imply that a significant amount of reacting is taking place, as opposed to strategic thinking. I know… not a surprise. But disappointing none the less.

    What I keep wondering: who is going to step up with more equity when even some of the more successful companies (eg. Google, MS, etc…) are having to cut back. Really, who? The entire world is struggling with the current economic situation. Most people are trying to grab money back, even if they have lost a lot on the dollar. Is there someone out there with a ton of cash saying “hey, I think Nortel is my best bet”? Yes, assets can be sold, but the same argument still stands.

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Excellent way to put it BBB.

    I have said it before and I will say it again: The way executive management treats employees is all too reminiscent of Animal Farm. The pigs are in control, living high off the hog.

    I can't help but think of Boxer whenever I get another Zmail urging all employees to ignore the media, ignore the “negative bias” and keep working “business as usual”, so that any major events are always “unexpected”.

    They may have no credibility but their disinformation campaigns are surely working. One need only look at how many employees (and outside members of the public as well) who were caught entirely off guard by the bankruptcy filing, despite ALL the warning signs being present and actively denied by the Nortel spin room.

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Yes, it is in the hands of the courts. But who allowed it to come to this? Who allowed the control to be wrested away from the company? Who abandoned the employees and left them to suffer in silence, all while continually ensuring us that everything would be okay?

    One need only answer these simple questions to trace back the chain of responsibility for the current predicament.

    It's like someone committing a major crime and then just saying “it's in the hands of the courts now, I can't do anything about it”

  • broadbandbill

    NE,

    Here’s a suggestion: how about just walking around ensuring employees they are doing everything possible, even communicating the fact there is nothing to communicate. But that takes empathy, doesn’t it? ..–bb

  • NortelEmp

    Agreed. If there was a real survival plan, I think this is what would be happening. Which is why I have my doubts. The behaviour that got the company here will not get it out of here. Unfortunately, I don't think that is well understood. Things need to change dramatically, in all aspects. To date, not much has changed – except of course, considerable damage to the employee base.

  • broadbandbill

    DJ,

    Once again, thanks. Having spent my summers on a farm I can tell you that pigs are pretty intelligent animals, at least a lot more than the jack-assess :) .

    The MOST negative bias is self-created every time they ‘wordsmith’ one of their communiqués thinking the employees have never seen a wordsmith-ed email. They are SO OUT OF TOUCH but mostly out of touch with themselves and their center of spirituality. Lost boys…–bb

  • Another_Nortel_Watcher

    As I have posted before, the GE-way is appropriate for holding companies. You buy a company that is sound and you send in the six-sigma teams to squeeze earnings and efficiencies from them. You send goons like Hackney in to squeeze the factories. As soon as you think the company is peaking – or If it shows signs of underperforming – you unload the company and it becomes someone else's problem. The GE-way does NOT work for companies that are in a disruptive market segment and are in strategy formation or reset stage when vision, insight, and experience is essential.

    I think that Nortel's creditors understand where the problem lies – with the leadership team.

    This means that IF the restructuring activity includes a new leader and some house cleaning, Nortel might emerge from chapter 11 and keep going.

    BUT, if the plan is more of the same crap from the same people that have driven Nortel to the edge, Chapter 7 – here we come! WHY would a creditor approve a restructuring plan if the well-understood core issues haven't been addressed? Doing so would just lead to a smaller debt recovery when the company finally goes under.

    I encourage all Nortel employees, investors, and creditors to bombard the board of directors with demands for action. I am. Now is the time for influence. If you wait until chapter 7, you will lose everything and all that will be left to you is to cry into your (great canadian) beer. TAKE ACTION NOW – YOU HAVE *NOTHING* TO LOSE AND EVERYTHING TO GAIN. YOUR LIVELIHOOD IS ON THE LINE *RIGHT NOW*.

  • ex_norteler

    The Z man could not control the situation at this point. He is the man to deliver the message the BOD has decided. Just like it's your manager or HR to deliver the message that you was let go. The BOD has to do everything they can to satify the creditors, NOT the employees.

    I am expecting a big lay-off in the coming weeks.

  • broadbandbill

    A great summary of Nortel’s management from the top down:

    ‘Pride precedes a disaster, and an arrogant attitude precedes a fall.’ – Proverb 16:18 (thank you Google)…–bb

  • http://nortelinsider.wordpress.com/ Desk Jockey

    An excellent verse, could not have summed up the situation better with so few words.

    Unfortunately, management reads from the Book of Judas: How much silver is in it for me? (And how many do I have to sell out to get it?)

  • Another_Nortel_Watcher

    Meridian – another good post. Thank you for sharing the information you're receiving.

    During this time of crisis, Mike Z is showing himself to be just as shallow a leader as he was when sentiment was on his side. Does this guy not have even an ounce of innovative spirit? For example, he could issue a statement something like “Because of the circumstances we find ourselves in, our hands are tied and we may have to make concessions to our creditors when it comes to pensions and severance payments. However, as the leader of Nortel, I commit to you that it is my goal to return Nortel to profitability, and when that happens – with your help – we will make good on our pension and severance obligations.” Such a statement is just one example and would cost MZ nothing except personal commitment and integrity.

    Mike Z is a disgrace.

  • Anonymous

    …and we all know what happens when you trade your integrity for 30 pieces of silver…–bb

  • Another_Nortel_Watcher

    Richard Lowe is the emptiest suit of them all.

  • broadbandbill

    e_n,

    Totally disagree! Great leaders know what to do in tough times, which is to look their employees and tell them the truth!!!…–bb

  • broadbandbill

    Yes, You Can! …–bb

  • exnt2

    which is why layoffs are going to be announced around jan 31. 10-15% cut coming. Z is not a great leader. get over it.

  • exnt2

    I'd advise the I believe people to stop sending their crap to their customers. Some of them are incensed at getting this garbage to join via facebook, myspace and email. Have these people lost their minds?

  • Nortel_honey

    Anyone who believes anything that the Z clown says is as deluded as he is. I have stopped drinking the Koolaid. I have a job interview on Monday with an opportunity for a new position and career, would I have taken it prior ..no way… now i can't wait to get off this rollercoaster thats being driven by Z, Hackney and Flannigan.

    I'll miss the people, the challenges, the absolute incredilbe feeling of being a part of a great team. It has to happen, you lose faith and become absolutely disengaged…I'm there!

    I won't miss Z or his plane trips and Z mails full of crazy talk telling us how much he appreicates our hard work…!

  • broadbandbill

    knew that 3 years ago…–bb

  • Hotel_Notel

    All these posts are excellent and a great way to learn, share and vent. Thank you Mark.

    It is obvious, and unanimously agreed, that Zman and his cronies must go in order for any REAL restructuring to take place.

    Since his grand arrival he and his misguided staff have done nothing more than tap dance and use smoke and mirrors with regard to leading Norel into any viable avenue which would have precluded and possibly prevented our current demise. We all waited after the first few months for the man behind the curtain to speak, and lead us in a direction we could all follow. We got nothing more than Six Sigma. Our reaction, “You've got to be sh**ting us!”

    Then came the only REAL plan Zman and company were ever capable of creating: Cost Restructering…i.e Layoff and COEs. Yep, that's right. His past GE experience was invaluable in this regard and he soon proved his merit in that aspect.

    As profits continued to dwindle and ESAT erode, the downward death spiral continued.

    Sill no plan, only more double-speak and expensive useless slogans. “This is the Way”…..yeah right!

    We begged for training on products we were required to support. We got none. Instead, we got KT training, yet another tool to only increase the amount of useless tasks and templates to be filled out, adding to the ever increasing pile of crap we had to wade through in order to do our job. Not to mention the extra hoops and other useless cost saving programs that added more time and inefficieny to our productivity, but yet we were told, somehow save the company millions????

    Its evident in Zmails that the Six Sigma program would become a shield from blame that Zman had intended to use for areas that did not meet or achieve his required expectations, and thus grant the ligitimization for elimination. In other words, if you don't drink the Kool-Aid, then you aren't on board with us and you should now leave.

    ESAT continued to erode, but the happy thought campaign was never ending.

    Its demoralizing to see friends and coworkers who are top talent being walked to door. Its even more demoralizing when they finally do land on their feet (yes, we are happy for them in that regard) and tell us from the outside looking in, how much happier they are and how the stress is gone.

    Its been going on 9 years of this, cost restructuring, layoffs, out sourcing…..and now, the Chpt 11. The last gasp of breath has been drawn

    Some continue to drink the Kool-Aid, even to the end. Very Jonestownesque, and sad.

    In some aspects, it is as the Kamikaze warriors of WWII looked on the aspect of dying, a glorious death. And so will be the end of Nortel, a once massive presence in the global marketplace. Only to be brought to its knees in the end by greed, a useless and clueless leadership team, and the inability to listen to its most vital resource……..its people..

    God's speed Nortel workers, past and present………….

  • NortelTragedy

    I wish Mike Z would simply go away as he has become IR-RELEVANT. Nothing he can *say* will ever bring confidence, motivation, inspiration, belief or hope so long as he is CEO.

    He has zero credibility with employees, and likely as little with customers or suppliers. Would you trust a person that has as recently as December perpetuated the longevity of the company and its cash position, only knowing that a Chapter 11 filing was “imminent”? Or Richard Lowe's rhetoric that Nortel is “no shrinking violet”? Trust has been lost on mere words, rhetorical spin and fluff, half-truths and outright deception and deceit.

    One of Mike's cornerstones of sales conference in 2008 was to make (keep) Nortel relevant. Ironically, yet, not surprisingly in reflection, it is Mike Z who has become IR-RELEVANT. Unfortunately, it is his leadership – or lack thereof – that has increasingly burdened Nortel with eroded market share, lost market cap and devalued brand.

    Mike Z, his “cabinet” and the BoD are IRRELEVANT. They should be replaced IMMEDIATELY to re-establish “solid footing” and a foundation of trust, truth and hope. The longer Mike Z is at the helm, the lesser probability Nortel has in emerging from Chapter 11, and Canada restoring this 116-year-old company, its brand and any hope for a future. Remove Mike Z!

  • broadbandbill

    You should send your post to him; very genuine…–bb

  • AcrimoniousAl

    From The 1st Report of the Monitor, dated January 14, 2009 you can see who the so called “leadership” team is concerned for:

    See item 115
    The “leadership” has proposed to the Monitor that a Key Employee Incentive Plan (“KEIP”) should be established to retain key employees. I am guessing these key employees consist of Z's “leadership” team.

    See item 116
    The “leadership” has proposed that the Directors receive cash “Remuneration” (from Latin remunerari – “to reward”) rather than stock as previously agreed.
    This is deemed “appropriate” because otherwise the Directors' may not otherwise receive any remuneration.

    Hmm, so it is appropriate that the laid off employees get kicked out on to the street without any of their promised severance
    but it is not “appropriate” that the wealthy directors loose their “reward” for occasionaly meeting with Mike Z
    in some fancy hotel ? (I would like to see the expense report for these little parties)

    Like the wise Desk_Jockey, I too am reminded of Animal Farm.
    The horse Boxer, the pigs most loyal and hardest worker, is only a few days into recovering from a fall when the pigs send him to the Knaker's yard to be made into glue and dog food.
    The pigs tell the other animals that Boxer had died at a veterinary hospital. The pigs use the proceeds from the Knakers to buy a case of wiskey. Poor Boxer had been looking looking forward his upcoming birthday when he could retire on a pension “5lbs of corn a day and in winter 15lbs of hey with a carrot or possible an apple on public holidays”.

  • 22years

    A few years back, right after he came to Nortel, I had the opportunity to arrange a meeting between JJ and a key customer. The subject was Quality. This particular customer representative was well versed on what it took to establish and maintain a reliable communications network and to provide a high grade of service to his customers. All JJ could talk about was Six Sigma and margin improvement. It was obvious to me and to this customer that JJ had no clue. Shortly after this Six Sigma was launched at Nortel by JJ. To this day I still do not believe that he has a clue.

  • horace_grimswold

    It's an acute case of cranial-rectal inversion syndrome at the top. Doctors say it is incurable, but they do know it has its roots in an egomaniacal personality disorder…

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Nice catch Al! One upside to the BK filing is that they can no longer hide their corruptions. It is all their in plain view.

    What employees need to know:

    KEIP – another way for upper management to continue their outrageously lavish bonuses, even through the bankruptcy that they themselves caused.

    Remuneration changes – Since NT stock is worthless, directors now get their bonuses in cold, hard cash. This is yet another slap in the fact for regular employees, many of which STILL have worthless underwater stock options issued at ridiculous strike prices of $80-120 pre-reverse split.

  • broadbandbill

    I know for a fact that doctors are right…–bb

  • Nortelguy

    I seem to remember that there was no ESAT survey in 2008. I guess they knew the reslts would be shocking, so decided to take the Ostrich approach.

    I am so pleased I left the business under my own steam at the end of Q4. From what I hear from talking to ex-colleagues, it is pretty awful there at the moment.

  • Hotel_Notel

    Oh yea….I remember 08…….

    We started the year watching the multi-million dollar sales extravaganza blowout in Vegas with a new slogan “Accellerate in 08″ …..

    Then instead of an ESAT survey, they sent a Black Belt to head up an ESAT initiative with our group. Like good Nortelites, we got in line. It then became apparent, after several non productive meetings, which seemed to typify anything to do with a Black Belts, we were left to fend on our own ESAT….yes, I guess that was the “Own It” part. Bottom line, nothing happened, since we didn't want to fall into the Black Belt's preconceived notions of what we SHOULD adhere to with regard to the Official ESAT categories pushed down to us from the exec teams.

    Next came the multiple ethics certifications, as you recall.

    These obviously were only meant for the worker bees, since its apparent these did not apply to Zman and company.

    As far as the current atmosphere………..

    Its like being in a hot zone in a war. You don't know who's gonna get it next. You go to work to be there for your fellow workers, and go through the motions. When customer's ask if you are still in business, you hear yourself answer yes, but in the back of your mind you hear the question echo off the chasms of doubt.

    You go home and try to act as if nothing has changed and that life is good. Inside your a turmoil of anguish, doubt and fear. Your preacher prays with you and for you more often than you've ever recalled before in your life.

    Yes Nortelguy, its hard, its awful and we're sick and tired of being sick and tired. Someday in another life, we'll do more with more and God will smile upon us.

    God's speed Nortel workers, past and present……..tomorrow is a new day.

  • jamming1

    Come on guys….While I left the company over a year ago because I did not believe. You can't sit here and think that any company's CEO would just come out and say, “Hey we suck and we will never be a good company again.” “Your all going to loose yoru job and it will never amount to anything again.” Is that what you wan to hear?

    I understand teh frustration but be real on your expectations. While Z made bad choices do you really think this is all about him. No one ever comes into a job saying “This company sucks and no matter what I do it won't matter!”

    This has been a long time comming and should have happened a while back. This could be the best thing for the company. Nortel is not going to go away, we might call it someting else but it will be around in some shape or form. Don't forget Avaya used to be called something else.

    Now I don't disagree with the comments about the road Nortel has taken but it has been that way long before Z. Call a spade a spade!

  • Enterprise_Hopeful

    There was one in May. We never saw any results, even after Mr. H stated they were important to him, and committed to providing them as soon as they were available. That was in late June, after we'd already found a chart deck with results for other orgs dated early-June. It must not have been important to him at all, as that was the last we heard about it. No need to have followed up, think everyone knew they continued to drop…

  • scalpcutter

    Agreed.
    Z just took the helm of the titanic after it hit the iceberg.
    He did however expedite the sinking.
    He put some huge holes in it for the water to come in quicker after it hit the iceberg. Both he, the Board, Senior management and for that matter all levels of management at Nortel.
    Too much attention is being paid to “how it was” and “what went wrong”.
    Who cares who the past CEO's were and who cares how much money they stole or continue to steal by getting bonuses and cheques.
    It won't help your situation anyway.
    Living in the past is never a good thing. Take it from somebody who knows.
    Continue to Rant, but move on.
    If you want to get ugly or push somebody take it up with your local MPP or the feds. They and their social systems are the only thing that can help you if you qualify. At least in Canada.

  • scalpcutter

    10-15 percent eh?
    Where?
    Put your money where your mouth is.

  • Anonymous

    Who cares.
    This is Canada. You don’t get prosecuted.
    We give terrorists money and asylum.
    You really think Frank Dunn will ever see jail time.
    Not in your lifetime.

  • less

    I like a leader who might attempt to turn a negative into a positive by admiiting they bollixed their job, regret it, and are increasing efforts to undo said bollix while still moving the company forward, not just request more time to “think”, alone, putting more lipstick on the pig.

    Cmon – “We're busy doing adult stuff you don't understand, whancha just go clean your room or something. Get with the program. Do your share, we'll do ours.”

  • scalpcutter

    Sounds like the comments of somebody working in the Enterprise, Carrier Voice and UC/Apps?
    Nortel has four distinct lines of true business that are either making money or have the potential to do so.
    They are CDMA, Optical, LTE and Enterprise. That's it.
    The rest is useless crap with the exception of their incredilby large legacy installed base in the field that customers are keeping and sustaining. Any new innovations, plans or projects that are on the drawing board or about to be put on the drawing are in the process of being S***canned. You can count on that. In this environment and Nortels position that is a fact jack. If Nortel management look at it any other way they are proving they will continue to mismanage like they have for the past 10 years or so.
    Why do you think Enterprise is the only key asset to survive.
    Let's read your argument?

  • less

    This is precisely why the masses wind up getting screwed ever and anon – lazy and/or dishonest individuals consistenlty form and/or hide within large groups for peronal gain, promising to share some of the accumulated wealth along the way.
    The suckers buy into it, literally, rewarding their chosen idols and prophets by wearing Paris Hilton's fashions cuz Paris says its cool to, the Che Guevara t-shirt for peace and love, the cheesehead hat that will help yerPackers take the SuperBowl, as if that means anything.

    This “survival of the fittest” has a long and colorful history, and it doesn't appear to diminishing even in this dawning Age of Aquarius. I've long gotten over the idea that the masses can ever lead anything effectively over a longer period of time, collectively lacking the the patience, stamina and IQ to help keep the brass honest.

    Looking at “how it was” and the reasons things “went wrong” are pretty much identical across the board – in relationships, politics, fame, fortune. Folks will never really “learn”.

    But tell me – I expect you keep your home unlocked at night cuz it doesn't real matter what you have/had and how you earned/lost it. No need to rant over spilled milk, eh?

  • scalpcutter

    You need certain character qualities to survive as an executive. Charm, wit, ability to lie, ability to tell people everything is good when you are playing russian roulette, ability to turn negatives into positives. Kind of like being president of the U.S. This is why they make big dollars, because for the most part they can fool the average sucker. Kudos to them. Do you realize there are people who think the WWE is real? How these guys milked us, the rewards and bonuses they get is banter for suckers. Either aspire to be like them or state the truth. Look at cops. You need to be arrogant, egotistical and lack sympathy to really excel at that job. That's the way of the world. I said it is fine to rant, but people need to be realistic. I really find it boring and disturbing that so many people whine about how much money Z makes, or bonuses the execs get, or special privileges. Wah Wah Wah. That's the way it is. Either aspire to be one of them or shutup. Your piddly whining voice isn't going to change a thing.
    This is capitalism.

  • Nortelguy

    Hang in there. I maintain (& will continue to do so) that the people I worked with in NN are the very pinnacle of the industry. I still have an immense feeling of pride for being able to spend 5 years working with some of the finest individuals I have come across.

    Z & is his bunch of cronies have decimated what was left of the company over the past 3 years, but it is the JCI 3 / 4 / 5 employees that will pull NN through this if they are given half a chance.

    My thoughts are with the folks every single day at the moment.

  • less

    But. But. How, where, why, did capitalism sneek in? Canadians have embraced democratic socialism for over a century?

    Its virtually foolproof to distract the masses by pointing a calloused finger at “capitalism” in general, which makes the downtrodden gush all noble inside and has 'em organizing protests, waving banners to raise awareness about and garner votes for the New World Order; the global village that, if fully embraced by the moral majority, will most certainly forever eliminate the evil grip of the global for-profit oil corporations on all things good – essentially the speeches of the “I believe” crowd painted red. Everything would be 100% free and non-profit, if only…

    To aspire to be like Mike and the BoD would have the masses interpreting “Own It!” by cleaning out everything in their offices and cubicles, including Nortel property: ” 'Wheres the printer?' Its out of ink so we, uh, sent in. It should back in, oh, 6 months.” Because it belongs to the masses.

    So different, yet so alike, all these noble masses.

    Nay, its ultimately useless, but the proles should (be allowed to) skip the chain of command and publicly support/criticize their bosses as they saw fit at his stage in the game, if only to make them know that they (and their successors) are being watched. Make em at least work at bit more for their ill-gotten gains.

  • broadbandbill

    That is not capitalism, it is Greed-ism, Ivan Boskey style…–bb

  • sham7426

    The problem with Nortel they don’t have an access product and there is none in their future. They have no way of delivering great services such as Centex IP, siplines services to the end users. Since, Nortel sold off their dsl access in the 90’s the have been loosing market share as telco’s look for more services to sell to the end users (eg triple play etc). I am expecting them to loose all of their business to other vendors like Calix. The present management team seems to think that the only way to grow the business is to cut jobs rather develop products and can win in the market (eg oc 192). .It’s sad but I don’t see Nortel coming out of bankruptcy unless some major changes are made in direction the company takes.

  • broadbandbill

    Sorry but I disagree! Z took the helm at the right time and then, singlehandedly, turned the Nortanic straight into the Iceberg. He egotistically BELIEVED he knew marketing better than the best marketing guys around (for info “Business Made Simple” was HIS call); hired George Riedel (a superb market strategist) and over-rode every one of George’s strategy initiatives; gave TOP Wall Street analysts 80’s-style lingo (not realizing they had heard it all before) and basically pretended he knew what he was doing while the ‘Iceberg’ was closing in. He is the single BIGGEST reason why Nortel is where it is today! The real problem is that he still doesn’t get it and probably NEVER will. Denial – the Fifth Force – stronger than the four forces, combined! ..–bb

  • nortelgirl

    jamming1,

    We've all been here for long enough and seen enough rounds of layoffs to know that long-term future employment is not guaranteed. We did, however, think that those who left would have something to show for their years of hard work

    My “expectation” was that we would get some honesty.

    I did not expect him to get his spokesman to say that no bankruptcy filing was imminent and then to go ahead and file a few weeks later.
    I did not expect him to let people go in November, letting them think that they had some short-term financial security, knowing that they weren't going to see a cent.

  • MISA27

    I agree. Remove MZ as the CEO.

  • MISA27

    I agree. Remove MZ as the CEO.

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