Archive for the ‘Executive Suite’ Category

Q&A with Mike Z.

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”.


Hackney Story Finally Picked Up in Canada

March 1, 2007

It took almost a week but the Canadian media has finally picked up on the Joel Hackney parking lot rage story. The Ottawa Citizen has a story on the front of today’s business section. Unfortunately, it’s behind a walled garden but it describes Hackney as one of the company’s management “stars”. According to Nortel spokeswoman Ann Fuller, the company “conducted a comprehensive review and determined it was an isolated incident”.
Update: For more about Hackney, the News Observer did a profile on him last June.

Zafirovski’s E-mail About Hackney

March 1, 2007

This is an internal e-mail that Mike Zafirovski issued about the Hackney “incident”.

“All of us at Nortel have an obligation to act with personal and professional integrity. These behaviors are the hallmarks of great leaders and great companies. I place as high a value on integrity and ethics as I do our goals of driving superior performance and business results.

As many of you know, there has been great concern recently because of an incident involving one of our co-workers and a leader, Joel Hackney. Given the nature of this incident I want to personally restate our commitment to ethics and integrity and share the action we have taken.

Last October, following a basketball game that he attended with his wife and children, Joel was involved in an incident that resulted in him entering into a consent agreement, which means he is required to complete certain actions by May 2007 before the charges will be completely dismissed.

Nortel takes this incident very seriously and, for the last six days, Chief Compliance Officer Bob Bartzokas has led a rigorous review involving numerous external and internal interviews (the internal interviews were with employees in and outside of Joel’s organization). This process was comprehensive in nature and I want to assure you that we took full account of all the employee input and response we’ve received regarding the incident.

Bob and the Compliance Committee completed their review and concluded the October incident was isolated. The Committee recommended certain appropriate actions and advised the board of directors of its findings and recommendations. The specific details of the actions will remain private, as they would for any Nortel employee.

Joel deeply regrets this incident and the impact it is having on everyone concerned. Knowing my intent to update you today, he asked me to share the following statement:

“I want you to know that I am taking full responsibility for the consequences of my actions. I have also communicated my personal apology to Ms. Ogden. I know this incident has caused embarrassment for my family, my employer and my co-workers. I am truly sorry.”

Joel is a leader with an important mandate who will need to continue to challenge his team to perform at world-class levels while exemplifying our leadership and core values. His track record includes very strong results and his leadership capability has been validated by employee assessments (as recent as December 2006), which included feedback from all of his direct reports. That said, I know Joel is taking this incident very seriously and will use it to work to become an even better leader.

I am absolutely confident of Joel’s ability to execute our business objectives, and he has given me his full assurance that he will hold to the highest ethical and professional standards expected of a Nortel leader.

Mike Z

Another Take on Hackney

February 27, 2007

The News Observer’s Barry Saunders has a column on the parking lot/road rage incident involving Nortel senior VP Joel Hackeny, who recently admitted to being guilty of false imprisonment, assault of a female and uttering threats.

Nortel’s PR Dilemma

February 25, 2007

So what should Nortel do from a public relations perspective about the Joel Hackney “incident” (aka parking lot/road rage). So far, the media coverage of Hackey’s admission of being guility of false imprisonment, assault on a female and communicating threats have been limited to a few outlets in North Carolina this blog (the number of page views on the post written on Feb. 22 have been four to five times average daily traffic, while there have been a flurry of comments).

From what I can tell, Nortel has not issued a comment on Hackney’s admission of guilt but there have been sugestions Hackney has directed all media inquiries to Nortel. So does Nortel issue a statement? Or does the company stay quiet while it tries to determine what action, if any, to take against Hackney? Clearly, Nortel CEO Mike Zafirovski needs to figure out how whether the whole thing will quickly blow over, or whether it has the potential to become one of those issues that could blossom into something more serious if Nortel fails to do something sooner rahter than later.

From a public relations perspective, if Nortel chooses to say nothing then what does tha tsuggest to employees, particularly those who’ve written comments on this blog about Nortel’s code of conduct. But if Nortel makes a statement, they risk making this “incident” a bigger deal. I imagine there are some serious PR meetings happening this weekend, which could make Monday an interesting news day. Stay tuned.

Does Zafirovski Keep Hackney?

February 22, 2007

When CEO Mike Zafirovski was rebuilding Nortel’s senior management team last year, he wanted to attract high-quality people with strong character, which made sense given the accounting scandal that had engulfed the company in 2004 and 2005. So, what does Zafirovski do with Joel Hackney, senior v.p. of operations and quality, who admitted he was guilty of false imprisonment, assault on a female and communicating threats following a road rage incident in a parking lot after a basketball event last October in North Carolina?

According to the criminal complaint filed against Hackney, he cut off Alicia Ogden in his Audi SUV. When she honked at him, he got out of his car and asked if she had a problem. “He then grabbed the left side of my face,” Ogden said in the affidavit. “I told him not to touch me and he responded that he’ll do what he wants.” (Source: The News Observer) So does Zafirovski keep Hackney, who has agreed to 50 hours of community service and written an apology to Ogden, or does he cut him loose?

Prediction: Hackney gets a slap on the wrist but the incident gets brushed aside as a first-offender, he’s truly sorry, will-never-happen-again kind of thing. Either that or Hackney “resigns” with a nice package.

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Nortel’s New PR Hire

February 21, 2007

Rumours have it my friend, Mohammed Nakhooda, has left Bell Canada to become the newest flack – er, I mean PR specialist – with Nortel. Maybe this will give me a better shot at getting an interview with Mike Zafirovski! By the way, Mr. Z: nice hire.

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“Nortel is Finally Back”

February 14, 2007

One thing about Nortel CEO Mike Zafirovski, he knows how to talk the talk. In an interview with MarketWatch, Zafirovski proclaimed that Nortel is “finally back’ as it puts its financial books in order and works on putting an SEC investigation behind it. “We just want to be a normal company,” he said, which sounds like a wish as much as a statement.

Some other interesting quotes from the interview, include his belief that Nortel can only rebound if it’s got the right cost structure. “We have a very aggressive business transformation process. Unless you have the right cost structure, you can never control your destiny.”

and that Nortel can start to regain market share again with a new management team in place (not withstanding the fact the company needs a new CFO to replace Peter Currie)
“First who, then what,” he said. “We’re not winning yet, but we have people on board with a track record of winning”.

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So What Next, Mr. Z.?

February 9, 2007

In the wake of Nortel’s decision to eliminate 2,900 employees over the next two years to save $400-million in operating costs, one question that still lingers is what Nortel wants to be when it “grows up”. Despite some asset sales (the UMTS business to Alcatel, the sale of the blade server division to U.S. investment bankers, etc.), Nortel is still a company with diverse operations, although probably not the all things to all people supplier that ex-CEO Frank Dunn was so keen on nurturing.

So, what does current CEO Mike Zafirovski do now that it appears the foundation work is close to be finalized? Does he make an acquisition? If so, how big does/can he go? Does Nortel stay small and strategic, and make $100-million acquisitions akin to the deal for Tasman Networks? Or does it go big to establish a leading role in the IP-TV or enterprise markets?

During a speech in Ottawa yesterday, Zafirovski talked about his six-point program, which features “profitable growth”. The sixth guideline, he said, is Nortel wants to target major markets. “I’m not interested in just small skunk works,” he told the Ottawa Citizen. Interesting.

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Currie’s CEO Aspirations

February 7, 2007

The National Post has a story today speculating that the reason Peter Currie may have decided to step aside as CFO is because he wanted to be CEO. The story hinges on a quote from an unnamed source:

“He’s a very driven guy. He’s left for other challenges before. He’s perhaps been looking to become CEO. I think that’s making more sense to me than other stuff.”

It’s an interesting story but it probably inaccurate. Yes, Currie was interested in become CEO, which is why he likely came back to Nortel in early 2005 while ex-U.S. Admiral Bill Owens was CEO. It was clear to just about everyone that Owens wasn’t going to be a long-term solution so Currie appeared to be his successor after his bid to become CEO of Royal Bank of Canada was unsuccessful.

Currie’s big opportunity to become CEO emerged a few months later when Nortel COO Gary Daichendt, who had his own CEO aspirations, abruptly quit after Nortel’s board refused to push Owens out. Amid this senior management controversy, it may have been the perfect opportunity for Currie to step up to become CEO to give Nortel some much-needed stability. Instead, Nortel’s board allowed Owens to carry on for a few more months until he “retired”, and Mike Zafirovski was hired as his successor.

The fact Currie stuck around for more than a year after Mike Z. came to Nortel’s rescue demonstrates how Currie was determined to finish the job of bringing the company’s finances back from the abyss, which had involved countless restatements after a scandal that allegedly involved the cooking of the books by senior executives (Frank Dunn, et al) to trigger a lucrative bonus structure.

Nice Work, Mr. Currie

February 6, 2007

After two years as Nortel’s CFO, Peter Currie has decided to resign – a decision that has to be a surprise to many Nortel watchers given Currie has played an instrumental role in the company’s rebound from an accounting scandal, and he seemed to be an integral part of CEO Mike Zafirovski overhauled senior management team.
Truth be told, Currie’s decision to do a third stint at Nortel (he worked there from 1979 to 1992, and 1994 to 1997) struck me as a little strange. It was like he felt an allegiance to Nortel at a time when the company needed all and any help it could get, so going back to Nortel for a third kick at the can seemed as much a gesture of goodwill and doing the right thing as a career move after he missed out at the top job at Royal Bank of Canada.

An interesting comment on Currie’s departure comes from UBS analyst Robert Dennison, who believes it could signal “a more acquisitive Nortel. We believe his departure is likely due to Nortel looking to be more aggressive in pursuing growth via M&A given the likelihood that most restructuring initiatives and internal financial controls are likely in place,” he said in a research report. Dennis rates Nortel as a “neutral” with a price target of $26.

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Nortel AGM in Ottawa

February 5, 2007

Mark your calendars for May 2 for Ottawa if you’re looking forward to attending Nortel’s AGM. Chances are it will likely be a dull affair compared to recent AGMs (the six hour affair in Halifax a few years was the “highlight” but given Nortel’s history, you never know what could happen.

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Zafirovski’s 15 Minutes of Fame

January 20, 2007

Is it just me or is Nortel and CEO Mike Zafirovski getting more than their fair share of media coverage recently? Along with Forbes, the Wall St. Journal and Barron’s, Canadian Business has done a feature story (“Inside the new Nortel”) on how Zafirovski is orchestrating Nortel’s turnaround. From a media perspective, Nortel continues to be a fascinating story because it’s big (30,000 employees, $10-billion of sales), it has a dynamic and high-profile CEO who’s made enough restructuring progress to be comfort talking about it, and its recent history is teeming with an accounting scandal and intrigue. Add all these ingredients together with a more-active effort within Nortel to court the media, and, in theory, you get some nice media coverage.

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Frank Dunn’s Alive!

January 8, 2007

After hiding out for most of the past two years since he was abruptly booted from Nortel for allegedly cooking the books to trigger a lucrative bonus structure, the Ottawa Business Journal reports that ex-Nortel CEO Frank Dunn has emerged in Ottawa as a business strategy advisor with QCL Growth Partners Inc., a consulting firm. According to Dunn’s profile on QCL’s Web site, his experience serving on several board for telecom and technology companies have “given him deep and broad perspectives on effective organizational management, particularly in the high technology sector.” For the record, Nortel is trying to recover $13-million paid to Dunn, ex-CFO Douglas Beatty and ex-controller Michael Gollogly. Dunn is also involved a regulatory dispute with the Ontario Securities Commission.

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All Zafirovski, All the Time

January 4, 2007

The Wall St. Journal’s coverage of Nortel continued earlier this week with a 2,500-word front page story on CEO Mike Zafirovski. It’s essentially everything you wanted to know about Mike Z. but were afraid to ask.

TORONTO — Mike Zafirovski, Nortel Networks Corp.’s new chief executive, got a rude shock when he met with his finance chief early last March. He learned that Nortel would have to restate financial results for the third time since 2003.
For the three nights before he had to break the bad news to Wall Street analysts, Mr. Zafirovski lay in bed awake. The company had said it cleaned up its accounting mess more than a year earlier. Now, “we were going to have to say again, ‘We goofed,'” he recalls. Mr. Zafirovski worried about calming jittery customers, preserving critical credit lines and defending Nortel’s stock-exchange listings. He knew his window of opportunity was limited, his credibility fragile.
[Mike Zafirovski]
Mr. Zafirovski had arrived at Nortel in November 2005 with ambitious plans to revive the beleaguered vendor of telecommunications equipment. He brought strong credentials — 25 years climbing the management ladder at General Electric Co., followed by five years at Motorola Inc., where he rose to second in command. When Motorola chose an outsider as CEO in late 2003, Mr. Zafirovski set out to run his own show elsewhere.
But being a CEO has proved a far bigger challenge than he ever expected. Unanticipated problems pop up regularly: additional accounting irregularities, lawsuits that threaten to bankrupt the company, skeptical investors, reluctant recruits, unhappy employees. Mr. Zafirovski must confront them without GE’s gold-plated resources. Nortel is struggling with creaky internal systems, a bloated corporate bureaucracy and a junk-bond credit rating.
That’s left him working 100-hour weeks, punctuated by four hours of sleep many nights. Tall and thin, with piercing blue eyes and a rapid-fire manner of speaking, the 53-year-old Mr. Zafirovski is an intense competitor who has completed the grueling Ironman triathlon and eight marathons. A fan of a GE boss’s mantra of “forceful optimism,” he is doggedly upbeat. Still, the incessant demands and exhausting schedule of a rookie CEO take their toll. “I have been stretched beyond what I thought I was capable of,” he observes.