IN EARLY 1993, Northern Telecom was on a downhill slide. Employee morale at the once-mighty Canadian telecom giant had sagged, revenue growth was stagnant, and the corporate strategy that had guided the company through its glory years of the 1980s was showing its age.
85 percent and revenues climb from $8.1 billion to $12.8 billion (U.S. dollars).
The skill with which Monty revived Nortel was duly recognized earlier this year when Nortel’s parent company, BCE, Inc., appointed him its new chief executive officer. And it hasn’t gone unnoticed by the University of Chicago Graduate School of Business, which has bestowed upon him the 1998 Distinguished Corporate Alumnus Award and Distinguished Alumnus Award.
Reversal of fortunes
Reversing Nortel’s slide required Monty to make some tough decisions,
among them the determination that the Brampton, Ontario-based
company had pushed its old strategy to the limit."We had become
almost too successful, and we had grown complacent," he recalls.
"We felt the areas we were in would never stop growing. We had
to do something drastic, and make hard choices to invest in new
sectors of growth."
Among the hard choices was the painful decision to cut about 5,200
employees. "The whole issue was targeting lower costs," he says,
"not only through attrition of employees [but] also [by] making
choices on businesses that we saw as long-term [opportunities]
for us."
Under Monty’s stewardship, Nortel sold off holdings that would
be better managed by others and moved into new high-growth sectors,
notably wireless technology and data communications. Wireless,
including cellular, mobile satellite networks, and personal communications
services, has surged from 5 percent of Nortel’s business in 1993
to 22 percent today. Data has grown from zero to 5 percent over
the same period. And in June, Nortel positioned itself to move
into the fertile territory at the intersection of voice and data
communication when it purchased Bay Networks, a leading manufacturer
of networking hardware, for $9.1 billion.
Leading onto the world stage
Monty accomplished all this with leadership characteristics he
described in his address at the GSB’s convocation in June. What
works for him, he told new graduates, is a combination of high
energy, action, and empathy, or the ability to see the world as
his customers, employees, and competitors do. Personal values
that transcend the corporation and a strong sense of identity
round out his recipe for achievement in business and beyond.
"Jean Monty is a great leader for BCE and the global telecommunications
industry," says Richard C. Notebaert, Chicago-based chairman and
chief executive officer of Ameritech Corporation, for which Nortel
is a major supplier. "He focuses on the right issues–putting customers
first and creating value for shareowners. And he brings a wealth
of experience to the most promising competitive growth markets
of the future–wireless and broadband."
One of the things Monty clearly believes in is globalization,
and he has positioned Nortel and BCE to take advantage of the
opportunities it offers. "There’s an explosion of technology and
globalization," said Monty. "Almost anywhere in the world, countries
wanting telecom technology want North American technology. Outside
of the wireless technology, the top companies are really North
American: Nortel and Lucent [Technologies], Cisco [Systems] and
Bay Networks.
"Globalization is a search for growth, a search for opportunity
and a desire to eliminate barriers to trade for the good of all
concerned," he continues. "The information technology business
has a significant amount to contribute. Most industrializing countries’
economies believe information technology must lead the development
process, not follow it. It’s a very significant shift from the
philosophy of the past."
Monty believes the most important geographical area of growth
will be Western Europe, where Nortel currently enjoys 25 percent
of its global sales. There, he said, countries will want to replicate
what’s happened in North America information technology over the
past five to ten years. "There’s no way the Europeans can afford
to miss the opportunity to create the same environment for their
businesses and their consumers," he says.
Don Schuenke, a Nortel board member since 1983, calls Monty a
hard-working, natural-born leader. "He’s a very dynamic guy, [and]
has tremendous energy. He’s in Europe one day, Washington the
next, and he seems to wear it well," says Schuenke, who is currently
chairman of the Nortel board, a nonexecutive position. "He also
has great leadership qualities. People want to follow him. He’s
collegial. He gets the group to participate in the process."
Married and the father of two sons, Monty, 51, enjoys golf and
skiing in his off hours. In his new post, it’s a sure bet he will
keep Montreal-based BCE in step with the ever-quickening pace
of technological development.
"In high tech," he has been quoted as saying, "no growth is the
kiss of death."
--Jeffrey Steele