Strategic Priorities

“Ben Verwaayen, Alcatel-Lucent SA's newly appointed chief executive, said Tuesday that the telecom-equipment company would focus on developing new technologies as a way to fight competition from low-cost rivals.

“‘We must rethink very efficiently where we are going to put our money and our best brains,’ Mr. Verwaayen told reporters… alongside the company's new chairman, Philippe Camus. The men… said they would both get to work smoothing cultural tensions that have bogged down the French-U.S. firm for two years. But neither gave any indication as to when Alcatel-Lucent might turn a profit again…

“Analysts have long said that Alcatel-Lucent has squandered research and development funds by investing in too wide an array of technologies…

“Messrs. Verwaayen and Camus are taking over at a tough time. When Alcatel and Lucent merged, executives thought their combined strengths would help the new company weather the ascent of new, low-cost rivals from Asia.

“But integration was slow, partly because the company tried to balance U.S. and French interests by dividing up its top positions by nationality. Alcatel-Lucent was left with a high cost base at a time when the price of telecom equipment was free-falling. The company has lost nearly two-thirds of its market value since the merger.”

(“Corporate News: Alcatel CEO Covets New Technology to Ward Off Rivals.” David Gauthier-Villars. Wall Street Journal: September 3, 2008. pg. B.3)

FIRST THINGS FIRST! When we forge a strong, clear culture, then we can see clearly enough to focus on those core competencies that are valued by the market.

Only then should we play the "technological innovation is the panacea" (???) card. A coherent heart and soul will unleash our "best brains."

Wall Street will be much more appreciative when they see that we have got our act together before proclaiming great initiatives.