blogs.nortel.com

Well, it's been an interesting 28 months here at Nortel for me. As you may have heard, Nortel is taking steps to assure it can better compete in the market and better serve its customers during the challenging economic and market dynamics we are all experiencing. As part of that effort the company has announced today that it is moving to a business unit structure in which all functions and resources (other than a few corporate activities) will be decentralized and integrated into full business units.  With that change, the central CTO and R&D functions will be divided and moved into each BU and, as such, my role is no longer needed.

Intellectually, I feel that this is the right thing for Nortel because what the company needs more than anything else at this time is agility to maneuver in a complex market. By having discrete business units and eliminating a complex matrix organization that we have historically operated within, the individual BU's can make quicker decisions, optimize their processes and structures, make strategic partnerships, and adjust technology and market strategy far faster than before. The trade-off will be that the company will lose some of the leverage and efficiency that a more central model provides, but in all decisions there are costs and benefits.

I have spoken many times about the fact that the industry we are in is changing and that change is happening faster and more dramatically than anyone expected. We have seen the movement to software, applications, and interaction with the IT ecosystem occur at scale in the last year. We have seen networking companies either try to become IT companies or, in Nortel's case, partner deeply with IT companies such as IBM and Microsoft. We have seen WiMAX not just emerge but mature in the span of two years,  and we have seen LTE accelerate by five years forward. In general, even the ambitious projections I made two years ago seem to have happened faster than we predicted from a technological and market transition perspective.

With this rapid change, the most important element of any company is to be able to keep pace with that change and capitalize on it. That translates into agility and speed and even if you must take some risk on scale and efficiency to get that, it is clearly worth it. As Nortel transforms into this BU formation, we will be a company that has discrete and fully integrated focus on the enterprise evolved market and the next-generation carrier market. Each of those BU's will be lean, focused and autonomous and with that posture will have an increased capability to make rapid decisions and execute in their markets. It is also clear that each of the BU's will need to execute its own path because even if the speed of change is uniformly rapid in carrier and enterprise, the composition of the market and the opportunity of each are different.

Personally, I am comfortable with this direction even if I am not a part of the path forward. I was brought into Nortel to help correct many years of neglect on R&D and to get it into a position from a technology perspective where it could go forward. I believe that has been accomplished. We have clearly developed new and innovative technology that is core to the new strategy (unified communications, LTE, web 3.0 collaboration, open source voice, agile communications environment, among others). We have also transformed, cultivated and cared for the R&D talent of the company to prepare them for the next chapter; have raised our visibility in the technical dialog to a level that had not been seen for a long time (consider how often Nortel technology was the lead story 3 years ago versus today); and  have created a set of new cultural and technical capabilities (such as applications development, IT/Telecom interaction, open innovation, incubation, agile development, ecosystem leadership…) that were absent but needed in order to go forward.

In the new formation, the global CTO role is not necessary and, as such, I will move on at the end of this year and pursue the next challenge. Until then, I will continue to support the Nortel community and assist in any way possible to make sure that the path forward is successful. I have nothing but deep regard and admiration for the teams in the R&D community here and believe that once they are settled into the new BU structure they will continue to be a bright light of opportunity for the industry and the most significant source of innovation in our market.

Thanks for your support and opinions and for the dialog on this blog (even when it was sometimes hostile and angry). A blog is not a controlled forum, nor should it be, and even in the most frustrating times I believe that this forum has raised the visibility of the R&D assets and people of Nortel who, in my opinion, are second to none.

I am, as many of you know, an optimist. I am also a strong believer that this industry is still exciting and full of new challenges and opportunities for innovation. I believe that mostly because of two facts: first, we have not even come close to connecting everything and everyone who would benefit from being part of the communications ecosystem; and, second, that the existing communications and collaboration experiences we endure are not even close to being as seamless and ...