With Nortel deciding the only course of action is a fire-sale of all assets, Mike Zafirovski’s reign as CEO is about to conclude. Without being too harsh, it’s fair to say Mike Z.’s initial – and perhaps last – stab as a CEO was a colossal failure.
Sure, he dealt with some pesky accounting issues and reduced costs by laying off thousands of employees, outsourcing jobs to low-cost places, and selling a few assets. But the bold moves that Nortel needed to survive and thrive in a volatile and competitive marketplace never materialized.
A perfect example is how Nortel’s lack of M&A activity, especially given Mike Z. hired George Riedl, an M&A wizard, away from Juniper. When your biggest acquisition is Tasman Networks for $99-million, it’s obvious you’re not in the game.
In hindsight, Nortel had nothing to lose by playing it safe and conservative. With cash in the bank and a stock price that, at one point, rebounded to nearly $20, Mike Z. had lots of options to do something dramatic and game-changing. Instead, he stuck to a game-plan he knew from General Electric.
To solely blame MIke Z. would be unfair. If people are looking for scapegoats, Nortel’s board is the perfect candidate. Over the past decade, the board has been a huge disaster.
Here are some of the lowlights:
- It let ex-CEO John Roth go a multi-billion dollar spending spree, many of which were mistakes that Nortel wrote off or sold
- Dismissing Gary Daichendt and Gary Kunis’ aggressive corporate makeover
- The hiring Frank Roth and Bill Owens as CEO, who were unsuited for the job.
- Letting Mike Z. do nothing as Rome (aka Nortel) burned.
Truth be told, Nortel could have been saved if the right moves had been made. When Mike Z. took over, it was a $10-billion that needed strategic focus and a new, bold direction. Mike Z. was handed a huge opportunity to make his mark.
Unfortunately, he dropped the ball and, as a result, Canada’s flagship high-tech company is going to disappear.
For more, check out James Bagnall’s story in the Ottawa Citizen.
Technorati Tags: mike zafirovski, nortel
3 Comments
He certainly came in with high expectations and a great track record. Hope he has enough cash to retire (assume he does), because he's not a bankable commodity at the moment
President's Bush's advisor Zafirovski has enough cash and another organization to take care of: "Macedonia 2025" with Skopje's Prime Minister Nicola Gruevski.
Like the true captain he showed he was, Zafirovski will be remembered as the person who joined a company desperate enough to take a chance on his unproven leadership skills and then spend three vital years simply maximizing his own wealth. He has not admitted exactly who (on his team) came up with the idea that they may survive as a coporation if they took advantage of people who had already served their purpose (pensioners) and were no longer important. While Nortel retirees world wide suffer real losses, while various naitonal governments globally are forced to help out these badly used pensioners, Zafirovski and his management colleagues carved up $45 million in bonuses this year and Zafirovski apparently made great use of a private jet to commute from his home. I suspect there aren't too many other jobs for him after this fiasco.
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