Level 3 Power Struggle – Not!!

Implications: Executive teams either function well or not well at all.  Are the team members real friends?  The answer is: Not always. Friendship is not key to a team’s success.  Respecting each other’s skills and the ability to work well with one another are key to a management team’s success. One more thing is important; the ability to execute.

Analysis: The changes at Level 3 are not part of some grand power struggle.  Rather I look at the changes as the norm for a company that has been experiencing financial troubles.  The acquisitions have not gone well for Level 3 due to integration issues.  As I have said in a past Gerson Lehrmn analysis; "Level 3 – A Casualty of Its Own Success", integration of businesses is much easier said than done.

There is always some level of intrigue in the executive offices.  However, Level 3’s case is pretty clear cut.   O’Hara’s departure is a simple matter to understand.  He was responsible for overseeing the integration of Level 3’s acquisitions.  He did not do the job well.  He was asked to leave.

Whether or not he got along with Level 3’s CFO is a non-issue.  O’Hara did not meet the expectations of shareholders or Crowe.  O’Hara had to go.

The article says Hobbs is going to do the job?  Analysts and the industry need to begin asking Crowe and Hobbs the following questions:

-    Do you know why merger-integration activities failed?
-    What will be done different by Hobbs?  In other words, what is your gameplan?
-    What is your timeline to complete the merger-integration effort?