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Lucent: Down But Not Out
Frisky070802 writes "Forbes has an article about the "new" Lucent. It discusses how Lucent is trying to follow in the path of IBM by transforming itself from an equipment provider to a provider of services, even to companies using equipment from competitors. Patricia Russo, the CEO, claims that Lucent has turned the corner and proven it can survive. The article quotes a few statistics on just what has survived: for instance, revenues down from $28.9B in FY2000 to an expected $8.9B in FY2004, and headcount dropping from 157K to 32.5K over that time." Lucent has fascinated me, simply because they were so well setup, but then floundered for *years*, but have a great amount of interesting technology at their core.
One of the big changes is what Jose Mejia has done to Lucent's supply chain. The company's Customer Delivery Organization concept has helped the company connect the back-end of manufacturing and supply to the front-end sales force. This has helped the win contracts and control costs.
I'm sure Lucent faces a tough battle given that wireline connections aren't growing, wireless is becoming a commodity, and optical still faces a glut of installed dark fiber. Still, I suspect that they will be able to reap their share of contracts and profit from whatever telecom equipment sales there are.
Two wrongs don't make a right, but three lefts do.
What do Lucent primarily do? Make base stations or atlease the equiptment for for cell phones. I took a tour of the Whippany, NJ facility and they are also working on getting broadband in the car aswell as piping television through it. They got to about 30 fps, but seeing how there is no motion blur they need a lot more fps. However inlight of their innovation they need to find something that will give them a good chunk of change every month to continure to do innovations.
On another note, the guy I was with said the employees have a very trusting relationship with each other and that if they left their office they can come back and fine it still there instead of being stolen, however it turns out that Lucent has the highest car jacking rate in the entire town of Whippany(or it could be Hanover Twsp which Whippany is a part of)
It will be a very, very sad day when Bell labs moves away from technology research and starts researching customer service tools and metrics. Or stops researching all together.
Bells labs is also the birth place of a lot of digital audio technology. Max Matthews was there -- the father of electronic music. It's where speech synthesis was invented. Remember HAL singing "A Bicycle Built for Two?" They actually synth'ed a computer doing that back in the 60's.
It's the beginning of the end for one one the cultural icons of technology.
Although, if they're in the service industry now, maybe they'll eventually become a geek theme park. Imagine riding the digital rollercoaster, where you're either at the top or bottom, but never anywhere in between ..
Lucent has the better telecoms and networks skills and is probably well placed to offer services in those areas.
Only if you're talking about selling services to monopoly telecoms, which I'd concur Lucent was good at. Overpriced, highly packaged yesterday-tech like Billdats, Kenan billing, the tired and overextended 5ESS, outsourced telco installation and support services (fulfilled by green new hires who haven't even seen the product manuals until the job site) and other telco-specific products just don't have a role in the post-dotcom-bust telco environment.
My greatest fear while running a multinational carrier network was having an executive from corporate tell me they just got off the phone from Lucent. It would usually be the prelude to learning yet another worthless product had been purchased (at great financing rates!) that I'd have to dump in order to get the Cisco, Juniper, Nortel, etc. that did work.
Then there were the endless "services" that Lucent is so great at, like network operations center design. For $280K, we got two consultants for three months and a 65 page document that must have been photocopied from some other project. It had nothing to do with our implementation. My team had to (once again) redo it and toss out the Lucent work.
Services? Heck, the only thing we'd trust them with is making category 5 cable. If services are to be Lucent's bread and butter, then they're toast.
It is not just Fionna. It is a flock of executives. We had a head of engineering transplanted from there in one of my previous jobs. The creature f**ked up the department in less then 3 months and was one of the very few which were ever ejected from the company in those days (top of the boom). He was "retired to spend more time with his family".
From day the transplanted lucent abomination started going around with an "outsourcing checklist" without even trying to understand the fact that we have just about enough staff to either define the requirements or write bespoke stuff to plug holes without defininig requirements (basically write as we go along). He never actually understood this. He never had any other ideas on how to do things either. Classic example of a person without any clue in software development. Believe it or not he was the head of Lucent reqional R&D before being transplanted.
He provided me with an insight of what happened to lucent. Lucent was the first company to outsource massively its software development arond 1997. It did this as a "cost saving measure" without retaining people to define the requirements and design what the outsourcers have to do. As a result from 1st company in VOIP it promptly went off the radar screen. Same thing happened in many other areas. Basically Lucents's woes are selfinflicted and they are a classic example on how not to outsource.
Baker's Law: Misery no longer loves company. Nowadays it insists on it
http://www.sigsegv.cx/
You've hit the nail on the head, but failure to adapt great technology into good products was just a symptom of a larger problem.
All of the Ma Bell spin-offs suffered from a corporate culter born and bred in a monopoly. In that environment you can afford developing technology that never turns into a viable product. As long as you're meeting the needs of your business and the equipment lasts 20 years, it's all good.
But beyond failing to transform technology into product, the challenge for the Ma Bell spin-offs was transforming their entire management culture. Turning Bell System managers dedicated to putting in their 25 years and then collecting their pension into managers who could thrive in a competitive marketplace was no easy task. Hanging on waiting for your pension or your buy-out was the real management goal for most AT&T management after the break-up.
So most of the spin-offs ended up bringing in outside management who brought with them hot flavor-of-the-month ideas that they had picked up in the latest management seminars. They padded their bank accounts and stock portfolios and then they packed up their buzz words and moved on to the next '90s boom company opportunity.
So can Russo Lucent turn into viable company? I don't know. "Services company" sounds like a lot of the buzz words that have gone before. Ultimately someone has to make the products that those services are applied to and it would be a shame if the legacy of Bell Labs was no longer a big part of that.
On the other side of Telecom Island, Team MCI/Worldcom also worked under this odious rule. Programmers were told to fix a 20-year-old codebase, but they were forbidden to change anything.
For instance, new functionality had to be implemented without new functions! Adding a new function was too much of a change. So we had 5000-line functions with all kinds of junk in them.
Data abstraction was also frowned upon, so those 5000-line functions took a pointer to the global data structure as their argument. If two functions needed to do the same thing to the global data, the code was duplicated in the two functions: adding a third function which only did that specific action to that specific member of the global data, which would be called by the two extant functions, was an impossibility.
Source code control was performed by a(n alleged) human who distributed and collected paper reservation tickets. He wasn't totally useless, however: he drank lots of coffee. Other than that, he was a waste of a cubicle.
Add to that aged numbskulls just getting around to learning C++, and freshly minted CS grads who as usual don't know anything (what the hell are schools doing these days?!), and criminal managers ---
[If there aren't at least a thousand of those people in jail after the DoJ is finished with MCI, the DoJ will have failed. Just getting the top two or three people will be enough to fool investors and other imbeciles, but the rot is much more pervasive.] ---
and you have an industrial-scale Charlie Foxtrot situation.
And if there are any fundamentalist ARI types out there, be thankful for antitrust regulation which kept MCI/Worldcom from buying Sprint. Antitrust is the only reason MCI/Worldcom's criminal activity was brought to a screeching halt. As a Mahayana Objectivist, I think antitrust should be applied to other criminals like the music and software cartels. Under capitalism, having control of a market is a sure sign of criminal activity.
They've fired most of the people that work for a living. There's way too much management left.
Check this article about our execs salaries and performance relative to those of companies like Cisco.
It will never come back without swapping out all of the upper management and that will never happen.