Russo Deflects Blame for Alcatel-Lucent Disaster

In an article posted today on the BusinessWeek website, Alcatel-Lucent CEO Patricia Russo seems to throw nearly everybody under the bus for her company’s struggles.

When the Lucent-Alcatel merger was first announced, I said it would end in tears — for the merged company’s customers, for its employees, for its partners, and for its shareholders. Still, even I underestimated the sheer scale of the unmitigated disaster the merger has become. It has been a debacle of epic proportions.

Now, as CEO Russo looks for culprits and villains to blame for the calamity, she manages to avoid implicating herself while casting aspersions on nearly everybody else in view.

First off, she seems to blame external critics of the merger, saying, "It’s easy to sit on the sidelines and make strategic judgments."

That might be true, Ms. Russo, but the external critics, including this one, don’t have the mandate to guide your company strategically, didn’t make your mistakes, and aren’t remunerated ludicrously inflated sums to provide corporate leadership. If you want to do the easy job of sitting on the sidelines and making strategic judgments, I’m sure many of your company’s shareholders would welcome your decision.

Next, Russo blames integration problems for many of the company’s difficulties, failing to comprehend that she and her executive team were ultimately responsible for the integration plan.

One of those problems, Russo now admits, was that integrating Alcatel and Lucent proved more disruptive than expected. Customers, uncertain about possible changes in the merged company’s product lineup, hesitated to place new orders. At the same time many employees were "distracted" by worries their jobs would change or be eliminated, she says.

Let’s see: Integrating Alcatel and Lucent was more disruptive than expected, with customers hesitating to place new orders because of uncertainty regarding the product portfolio and employees worried about their job status. I’m just one of those outside critics Russo so disdains, but it sure sounds as if the lack of an integration plan, poor integration execution, and woeful communication — with customers and inside the company, with employees — were the causes of the integration mess. Those responsibilities would ultimately rest with the CEO, no?

Russo, though, sees other malefactors behind the post-merger difficulties of her company.

"Our competitors pulled the rug out from under us," Russo says. "They put forward some very aggressive pricing."

Imagine that? Competitors actually . . . well, they competed for business!  That must have come as a shock to the CEO and her crack executive team. Who could envision that rivals might try to beat Alcatel-Lucent in the marketplace? Obviously, Russo and company couldn’t foresee it, and they were apparently helpless to adjust to it.

Then, of course, there were product missteps and technological backwardness at Alcatel-Lucent. The blame for those miscues must be attributable to the growing legions of employees she’s been shedding rather than on Russo’s own shoulders, right? After all, she can’t be expected to mind the strategic store.

Have no fear, though. Russo, like every other failed CEO scrambling to save her job despite a miserable track record, says the worst is behind Alcatel-Lucent. She claims the company is back on track, with integration challenges addressed, product portfolio reordered, competitive vigor refreshed, and strategy reset.

Who are you going to believe, investors and shareholders? Are you going to believe Patricia Russo, or your own lying eyes? If I were you, I would say, in true Gallic tradition: "Patricia Russo, J’accuse."


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