Critical Management Move for Sonus

Implications: 1.The “effective immediately” portion of Sonus’ announcement more than suggests that the removal of the VP of worldwide sales was for cause. 2.There are indications that Sonus had decided to take this action some time ago. 3.At least part of the delay had to do with the supplier settling the issue over options.

Analysis:

The “great deal of urgency” in Sonus’ management team announcement had more to do with the supplier internally than in “customers…mov[ing] their networks forward.” The vendor was just not achieving sales goals that were based on what appeared to be reasonable expectations.

Sonus is sending a definite message to its customers that its interactions with their them are going to take on a totally different tone. It is evident that Mr. Shanableh has been specially picked because he has a strong relationship with and a solid allegiance to the CEO, and that Mr. Ahmed himself will be directly involved in the day-to-day sales operations. Ahmed had won what appeared to be a power struggle with Mr. Notini, resulting in the recent resignation of the COO.

This story is an illustration of the potential risk in going outside of the company for talent and not adequately vetting the candidate. Mr. Collier’s 20-year career at Nortel should have raised a red flag. Nortel has earned its reputation for arrogance and for its sense of entitlement. (One or more lower-level people that Collier brought along to Sonus were also apparently let go as well.) Mr. Collier had left a sales postion at Ciena to take the job at Sonus.

There are also definite signs that it maybe the intention of Sonus to ultimately take the company private again. If such a decision gets taken, it would be beneficial to the supplier because a heavy amount of patience is currently needed. The movement to soft switches in the wireline access side is going to be extremely slow.