Editorial - 28-5

Nortel Networks Corp is back in the news. An ambitious study by researchers at the Univ of Ottawa has raised Canada's greatest high-tech success story — and failure — from the dead to determine what lessons can be learned from one of the greatest corporate collapses in the nation's history.

Those lessons are manifold and particularly cogent for firms like Blackberry whose future remains clouded in market uncertainty. Like Nortel, Blackberry has top-flight technology, but a disconnect between the R&D function and market acceptance is threatening its long-term viability.

Determining where Nortel went wrong was a complex undertaking that lasted three years and pulled in expertise from U of O's Telfer School of Management and its faculties of law and electrical engineering and computer science. It was successful in identifying more than 100 lessons learned, with a dozen it considers key in understanding the company's downfall.

The world of high-tech has changed dramatically in the past decade and continues to evolve at a dizzying pace. Companies that purchased Nortel's technologies are combining them with savvy innovation skills to gain niche market share. Nortel's R&D function was strong to the end, but its separation from headquarters and the inability of management and the board of directors to maintain market focus and meet customer needs proved fatal.

The study possesses valuable insight into how Nortel's fate came about and how it can be avoided in the future.