What will the Nortel crowd do? If history is a guide, not much!

November 8, 2008

The current crisis at Nortel is pushing another wave of executives into the frigid employment waters. If history is any guide, many will not transition very well.
For many years, Nortel took pride in hiring the ‘best of the best’. They cultivated a competitive full contact culture where high potentials and high performers were promoted from role to role, division to division, country to country and year to year. Intellect ruled, the company thrived, innovation flourished, and everyone from senior execs to engineers took pride in their contributions to that success.
During the last tech bubble, many executives left Nortel to found and/or lead telecom and photonics startups. Investors salivated and the supremely confident startup newbies were showered with cash. They scoffed at suggestions that their transitions would in any way be difficult, arguing that while their entire careers were spent in Nortel, they were always immersed in entrepreneurial endeavors. They described new technologies they helped launch, business units they helped spin off, new markets they helped developed, joint ventures they help spear-head. Because they moved around so frequently within Nortel, they insisted that they were nimble and adaptable.
The reality was that while a few did thrive many, many more did not adapt. They were unable to move from a massive resource rich, process oriented conglomerate to an early staged company with little of anything of those things. They could not adapt to the cadence of a startup, the improvisation, the scramble in the marketplace. They had never seen the entirety of a business let alone built one from scratch. They were not street fighters, they were skillful professional boxers stepping into the back alley for the first time.……and they got pummeled.
To be fair, a number of very successful companies have been born out of the bowels of BNR and Nortel and a number of very smart people have gone on to create very successful organizations. But many professional managers coming out of that organization are low-risk, big company managers who seek out small companies only because they cannot find big ones. And they learn the definition of hubris the hard way unfortunately at the expense of the organizations that hire them.
The Nortel crowd coming into the market today will face a different set of challenges. The market is now wary of their transitional skills and they will be evaluated far more rigorously than their predecessors. This is not an indictment of Nortel per se, though the cockiness and arrogance that it bred blinded many of their executives. Instead it is a warning that spending your entire career in one company does not equip you well for the next one, no matter how good you think you are.