Nortel Networks: How Innovation and Vision Created a Network Giant

Throughout 14 crisp and lucid chapters, MacDonald explains "how innovation and vision created a network giant." First, he provides a brief history of the company and then identifies its key executives, from C.F. Wise, Sr. (president 1895-1913, chairman1914-1917) until Frank Carlucci (chairman, 1999-present). What a colorful history it has been thus far. My primary interest, however, is in the company today and (especially) in its prospects for the future inthe face of what is certain to be ferocious competition. As MacDonald observes in the Introduction, "Nortel is at the forefront of laying down the information superhighways now revolutionizing the lives of everyone everywhere. Indeed, Nortel has a good-shot at becoming the number one provider of Internet infrastructure...This book, in providing a look at the emergence and prospects for Nortel, is, in part, an introduction to one of the biggest stories now unfolding: the fierce rivalry of three titans [ie Nortel, Cisco Systems, and Lucent Technologies] to construct and expand the networks of the future."According to MacDonald, one of the main factors in the Nortel's success this far [i.e. when the book was published] has been its ability to capitalize on discontinuities,"those sudden breaks in the environment or the way things are done." For example, the transition from analog to digital telephonesystems, from wired to wireless communications, and from copper-based to fiber-optic transmission systems. Also, the deregulation of the telecommunications industry, allowance of interconnection to the telephone network by the FCC (1971), and then the break-up of the AT & T monopoly. MacDonald does a brilliant job of examining and explaining this theme of discontinuities as well as other themes which also relate to "the role of institutional arrangements" and to "the internal dynamics of the corporation." As he thinks about an uncertain future, MacDonald suggests how Nortel has differentiated itself thus far from its two main rivals: its lead infiber optics, the relatively greater amount of its research anddevelopment, its greater diversification of both product andgeographic distribution, its speed advantage over Lucent to embrace growth opportunities of the Internet and IP networks, and through the leveraging of its strengths in optical transmission. Of course, how long Nortel can sustain these competitive advantages remained to be seen then and serious problems have since developed or have at least been revealed.Who will derive the greatest benefit from reading this book? All of the executives now employed by Nortel, Cisco, and Lucent as well as by other "players" such as Siemens, Alcatel, and Ericsson. Also, all of the executives at other companies which now have (or seek) B2B relationships with any of the aforementioned "giants." Finally, other executives such as I who are not directly involved but are eager nonetheless to learn how and why some companies become "giants" (at least for a time) and