Former executive recalls rewards of risk-taking in new book about Nortel

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In his insider’s account of the demise of the company he loved, John Tyson makes it clear his purpose is to praise Nortel, not to bury it.

John Tyson is a former executive with Nortel.

By David Sali

The Ottawa native chronicles his 35-year career at the technology firm in a new book titled Adventures in Innovation: Inside the Rise and Fall of Nortel. The official release date, Jan. 14, wasn’t chosen by accident: it marked the fifth anniversary of the day the former telecom colossus filed for bankruptcy, the final chapter in the once seemingly invincible firm’s epic collapse.

“The timing was perfect,” explains Mr. Tyson, 71, who spent two years working on the project.

Adventures in Innovation describes Mr. Tyson’s ascent from a fresh-faced art college graduate who talked his way into a job as then-Northern Electric’s first industrial designer, to his ultimate role as vice-president of a multinational telecommunications powerhouse.

Along the way, Mr. Tyson helped create and bring to market some of the firm’s most iconic products.

His promise was evident from the get-go – his first major project, in 1968, was designing the Contempra telephone. The first handset that could be either placed on a desk or mounted on a wall without modifications, the Contempra went on to become a ubiquitous presence in homes around the world, eventually earning its own exhibit at New York’s Museum of Modern Art.

The success of Contempra taught Mr. Tyson the importance of taking risks and challenging conventional wisdom, lessons he never forgot on his journey to Nortel’s highest echelons.

“In my experience, innovators are the strongest group in the corporate subculture,” he writes in the book. “Driven by passion and facing resistance, they will always apply the rule: Forgiveness is easier to get than permission.”

It’s that spirit of daring and innovation, not the ugliness of the last decade, that the author wants people to remember about the place where he worked for more than three decades.

“It means seeing an opportunity, taking the risk – in our case, with (Bell-Northern Research, the R&D arm of Northern Electric that was established in 1971) and Nortel, it was literally bet the business,” the father of three says from the Nepean home he shares with his wife, Yolanda.

“Without reach, there’s no challenge. Without risk, there’s no reward. And without vision, there’s no future. It requires leadership, it requires pioneers and it requires passion and conviction,” he says.

“Rather than see Nortel and BNR relegated to the wastebin as toxic, I really felt they deserved a celebration,” Mr. Tyson adds, explaining his desire to write the book.

Throughout the ’70s and ’80s, that risk-taking mindset continued to flourish at BNR and the firm that was known by then as Northern Telecom. The company became a leader in telecommunications hardware by anticipating trends rather than reacting to them, Mr. Tyson argues, pouring millions into developing digital switches in earnest long before anyone else, for example.

Mr. Tyson credits men such as Robert Scrivener – Northern’s head of research who later became president of Bell Canada – for creating an environment where innovation was a guiding principle. It proved to be a powerful recruiting tool as well, attracting the likes of Terry Matthews and Michael Cowpland, young engineers who launched their careers at Northern before becoming tech titans in their own right.

“It’s so important to find a kindred community of interest,” Mr. Tyson says. “There are so many self-help books that always start with a number, whether it’s seven habits or six hats or 12 steps. (But) it’s always about success.

“As I say in the book, I and my colleagues, we didn’t talk about success in terms of celebrity or we didn’t talk about success in terms of money. We talked about success in terms of relevance and fulfilment. It really comes down to loving what you do, loving where you do it, and doing it with a community of kindred spirits. If you have those things, what you have is fulfilment and relevance. It seems to me that’s what it’s all about.”

There was plenty of fun along the way, he adds. He writes of how, after the U.S. government deregulated that country’s telecommunications industry in the early ’80s, Northern Telecom chartered Holland America’s flagship cruise liner, the SS Rotterdam, for a pair of product seminars that featured entertainment by Tony Bennett and Victor Borge and drew hundreds of America’s top CEOs and businesspeople.

“Could you imagine such an outrageous idea?” Mr. Tyson says with a mischievous chuckle. “And we got away with it. It made our competitors shudder. Those were the kinds of things that we thought, if we’re going to do it, we’re betting the business, well, let’s go for it.”

Gradually, however, the company’s brain trust began to view R&D as an expense rather than an investment, he says. Intent on maintaining market share instead of being a market leader, Nortel failed to anticipate the rise of cellphones and the Internet, he argues, a disastrous miscalculation from which it never recovered.

“It all really started to come apart in the ’90s, with Nortel almost missing wireless cellular entirely,” he says.

“I do give credit to (former CEO) John Roth for being the one who fought to get back in and build a wireless division in the company. But as you get into the mid-’90s and you see the clear beginning of the impact of Internet and the web and then mobility, Nortel missed it and compounded it by its $20-plus-billion excursion through acquisition, which was either a means of buying time or buying market share. It was a miss – a huge miss.

“Nortel fell asleep at the switch,” adds Mr. Tyson. “They were exposed and they refused to see it. The fate was sealed.”

The company’s decision to disband BNR in February 1996 and absorb most of its employees into the firm’s main operation was a clear message that Nortel’s days as a trailblazer were behind it, he says.

“It was tragic,” says Mr. Tyson, who eventually left the company in 2000. “Everything changed on that day, in terms of temperament, commitment, passion.”

Today, he prefers to remember the good times, and believes the love of risk-taking and innovation that fuelled Nortel’s brightest minds for so long is still alive and well in a new generation of Canadian high-tech success stories led by Ottawa’s Shopify.

“Their spirit is contagious,” he says. “I think we’re in good hands.”

Sidebar

In more than three decades at Northern Electric, Northern Telecom and Nortel, John Tyson gained valuable insight into the keys to success in a fast-changing world. These lessons, he writes in his new book, “apply to any organization – large, small or startup – built on the power of innovation.”

1. Vision matters. Without it, there is no future. “Organizations, indeed nations, that fail to understand that intellectual capital is their greatest strategic asset do so at their own peril and will be condemned to endure the future they created because of their lack of vision and necessary leadership,” Mr. Tyson writes.

2. Pathfinders matter. Northern’s leaders created and nurtured a culture of innovation. “Empowered and nurtured, everyone loved going to work, celebrated their skill and did whatever it took to succeed.”

3. People matter. “Large or small, organizations need to inspire their people and excite them.”

4. Values matter. Northern believed strongly that the customer was always first and supported the community through sponsoring charitable events, endowing academic chairs and incubating the high-tech sector, Mr. Tyson writes.

5. Organizations under stress can forget their reason for being. “R&D, as the lifeblood of corporate success, needs to be part of a corporation’s DNA … Falling one step behind in the innovation race changes an organization’s gestalt from a winner to a loser.”

6. Product innovation often means being willing to obsolete or cannibalize your own product. “That means taking a leap of faith and having a go-for-it attitude. It means never being satisfied or leaving well enough alone.”

7. R&D is complex, expensive, multidisciplinary, and a collaborative undertaking that cannot function in fits and starts. It requires “a separate structure of accountability, one free of the profit-and-loss performance metrics of revenues and gross margins.”

8. Tools are toys and the workplace is a playground for innovation.

9. Centralized R&D works when the challenge is to create disruptive solutions. “If well-led and well-managed, the tightly integrated and collaborative community allows for the conditions that nurture personal and professional risk-taking along with unorthodox thinking.”

10. Market leadership cannot be claimed. “Real leadership is attained through the passion to reach, to accept and manage risk and to create and follow a vision. It can never be taken for granted.”

11. Success is a measure of a corporation’s past hard work and innovative achievements. It “can breed arrogance and, more insidiously, complacency and sloth in the top echelons of a corporation. Board members and executives can succumb to the sin of greed and fall prey to the deadliest sin of all: revelling in one’s own hubris.”

12. Fun matters. “To me, loving my job was synonymous with fun. A lot of laughter is the best medicine for the mental health of an organization and is also a means of releasing creativity, imagination and innovation.”

13. Recognition and celebrations matter. Spending on such items is often the first thing to be cut when times are tough, Mr. Tyson writes, and that can have disastrous long-term effects. “Good faith and common sense might suggest that cutting the means to keep people focused and happy while dealing with the challenges of the tasks at hand would be the very last thing to do.”

14. Innovation creates new wealth because it creates new value. “By stepping up to the challenge of innovation, new opportunities and new careers are created.”

15. A culture of innovation creates a domino effect where small businesses can expand. Young people are “impatient and nomadic by nature,” Mr. Tyson argues in his book. “If they cannot find or produce an ecosystem which nurtures innovation at home they will, in frustration, follow the money and migrate, leaving an impoverished community behind.”

16. Corporate culture, easy to see but hard to measure, takes time to create but very little time to destroy. “BNR’s employees bought into the company’s vision as an act of faith and continued their commitment to the original contract through thick and thin … Fulfilment came from having the opportunity to do what they loved and being surrounded by kindred spirits who shared their passion.”

Organizations: Nortel, Northern Electric, Bell-Northern Research Northern Telecom Museum of Modern Art Bell Canada

Geographic location: Ottawa, New York, U.S.

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  • Ed Monteith
    April 16, 2014 - 16:44

    I just had to say hello John. You had a great influence on my sales career from way back at NEC, NTI, and NTC. I would say that it was your enthusiasm that really rubbed off on me, along with those innovative and successful products back in the 70's, that made my work in sales so pleasureful. I should add successful as well. Best of luck to you John, Ed Monteith Sooke B.C.

  • Christopher Rath
    January 24, 2014 - 22:31

    In my opinion, the sad fact is that by choosing to pursue Paul Stern's flawed strategy (divest every low-margin BU and product line), John Roth nailed Nortel's coffin door shut. Very sad...

  • Kevin
    January 23, 2014 - 16:26

    A great story. As a society we Canadians have gotten to be very risk-averse. How often do we see governments lambasted in the media as a result of an auditor general's report which indicates that money was wasted, especially if the project gets cancelled? Cancelling a project, on its own, is not necessarily a bad thing; take the lessons learned and run with them. In the publicly traded private sector, how many companies these days have real R&D budgets, or spend money on training? The high-tech company I work for doesn't have one (at least for my division), and doesn't provide training for new technologies (its been 8 years since I've had any training, and I am hardly unusual here). In the short term these budgets are easy to cut, since given the half-life of a company exec these days, by the time that the impact of the decision has come home to roost that executive is likely to have moved onto the next company. In that respect privately held companies, especially ones that are not owned by other corporations, are better off; the executives tend to be around for longer and are willing to take a longer term view of the corporate finances.