An interesting read from the Ottawa Citizen’s James Bagnall here. Bagnall highlights poor accounting systems and poor top management decisions, chief of which were not listening to the two Gary’s and not taking $2 billion from Nokia in 2005.
“It’s very easy to blame Nortel Networks CEO Mike Zafirovski for everything that has gone wrong at what used to be Canada’s most valuable corporation.
Zafirovski was hired at great cost, amid big publicity late in 2005 to fix Nortel. He had worked many years in senior roles at two of the United States’s great companies — Motorola and General Electric. And he had a bible — Good to Great, by management guru Jim Collins.
Zafirovski’s game plan, based on notions contained in that book, was simplicity itself. He would hire lots of bright people and together they would figure out what business Nortel should be in. Zafirovski convinced ex-colleagues from GE especially to join his cause, to be part of one of the greatest turnarounds in the history of business. At the very least, they would take a $10 billion-a-year company (all figures U.S.) and run it more efficiently.
They failed spectacularly, with the proof coming in January, when Nortel filed for bankruptcy protection. And yes, much of the fault lies with Zafirovski.
But in a company this big, with 114 years history, it is not the whole story. Context is everything. Long before Nortel’s board of directors selected Zafirovski as the company’s saviour, there were many missed opportunities to set things right.”