Summary
1. Hopefully, by now, Alcatel-Lucent has taken a hard look at Nortel’s situation. 2. There has to be the full realization that one can see the former as almost an exact reflection of the latter. 3. It would be suicidal to do anything less than in finally becoming more of a lean and mean corporation.
Analysis
Alcatel-Lucent needs to make a real commitment to taking aggressive actions – not just with words – that will result in a dramatic revamping of the organization. The company has to make it totally clear that it will do away with just about all of the duplication of equipmentand management teams. On much of the legacy businesses, it needs to either sell them off or close them down. Certainly, any sector that represents less than 10 percent of its overall revenues should be eliminated. Alcatel-Lucent’s emphasis should be on the growth areas such as in wireless and in fiber optics. In short, the vendor needs to do what Nortel is finally doing now. It has no other choice.
Also, AlcaLu executives need to have frank and open discussions with all of its major customers about the future direction of the company. There needs to be a smoothing of the waters and the admission by the manufacturer that it totally understands their skepticism given the false promises in the past – and assure them that there will be vast differences with its usual ways of doing business. Afterwards, AlcaLu should make several announcements to the world that this is indeed going to be a very different company this time – with dramatic cuts in product lines and in areas of research and development. There should be no doubt that a full transformation of the firm is coming.
