April 24th 2003 notes on leadership, business and economics
There is apparently cautious optimism in the industry with Patricia Russo’s return to AT&T/Lucent, after a brief stint as the number two at Kodak, even as analysts are highly skeptical that a long-time insider can shake up the struggling company in new ways.
Russo’s Identified Attributes and Skills
- Deep knowledge of their industry and customers
- Ability to lead an organization through change, because she understands its dynamics and buying cycles
- Understands and embraces their strategic and restructuring plans
- Will stick to basics, such as closing a sale with a big customer and getting out in the field
- Is a “straight shooter”: comfortable delivering bad news as well as good news
- Can dole out “tough love”
- Ability to win eager followers
Russo joins Carly Fiorina as a woman at the top of a major corporation. I am disappointed that Fiorina is struggling and appears to be failing at HP. I hope Russo does not fail. She expects to return Lucent to profitability sometime during FY2002.
Under Richard McGinn, Lucent was certainly a high flyer riding the internet boom, and became one of the fastest-growing tech companies. As with Chrysler, its successful strategies during the long-running bull market of the 1990s led Lucent to some critical missteps: a series of costly acquisitions, aggressive sales targets (that I gather were grossly out of touch with market reality), and (overly-)generous vendor-financing deals (that McKinsey & Co. identified as a key factor in the demise of tech companies as the bubble burst).
Henry Schact let McGinn go in October 2000 and took over the CEO post. The Wall Street Journal recently reminded readers that the search for a candidate to fill the post permanently had been protracted. Now, with Russo, Schact can resume his preferred role as Chairman of the Board and have her work with a company that is now half its former size and is refocused on “selling gear exclusively to the world’s largest telephone companies.”
Berman, D. (January 7, 2002). Lucent veteran Russo to return as CEO; firm’s protracted search for chief ends. www.WSJ.com.
Berman, D. & Lublin, J.S. (January 8, 2002). Russo’s goal as Lucent’s new chief: Restore luster company once had. www.WSJ.com.