Newbridge COO at eye of the storm Flynn's promotion comes at a critical time as company puts itself up for sale and deals with its status as an underachiever
SIMON TUCK
globe and mail
Saturday, December 18, 1999
IN OTTAWA -- Pearse Flynn quickly disposes of any notion that he's cut from the same cloth as a typical corporate suit.
Mr. Flynn, the new president and chief operating officer at Newbridge Networks Corp., spontaneously moves the site for an interview into his office, then clicks
on his mouse to share one of his favorite X-rated sound bites from Scottish comedian Billy Connelly.
The self-described non-conformist is also funny, frank and manages to make it through at least a few questions without using either the phrases "going forward"
or "exciting new opportunity."
"Should I have cut my nose hairs today?" he jests, as a photographer snaps headshots in the company's main reception area.
The setting of Mr. Flynn's birth was also different from most of the corporate heavyweights in North America's booming technology industry. The event
occurred only 36 years ago, in a fishing village in southern Ireland. When asked why he didn't follow two of his six siblings into the fishing industry, Mr. Flynn
deadpans: "I found out it was too hard."
Despite Mr. Flynn's unlikely ascension at Kanata, Ont.-based Newbridge, the former Compaq Computer Corp. executive has been brought to the helm at a critical
time in the communications equipment company's history. Long seen as a dissident in the convergence of voice and data communications firms, Newbridge
announced Nov. 18 -- Mr. Flynn's first day on the job -- that it was up for sale. That puts the man from Ballycotton, Cork, in the centre of a storm as the
company decides whether to fish or cut bait.
"I absolutely can't believe all the speculation [about the possible sale]," Mr. Flynn says.
Newbridge has been the subject of frequent speculation by analysts and reporters about a possible takeover for at least two years, but it's reached a near-fever
pitch since the company's announcement last month. "I can't believe all of the time I've spent thinking about it," says Gurinder Parhar, an analyst at Dundee
Securities Corp. in Toronto, only half-jokingly.
Mr. Flynn, who was hired to work at Newbridge less than a year ago by his predecessor, Alan Lutz, was somewhat removed from the frenzy in his previous job
running the company's operations in Europe, Africa and the Middle East. When the company continued its habit in recent quarters of not meeting analysts'
expectations, Mr. Lutz left the company and Mr. Flynn took over.
"I make things happen," straight-talking Mr. Flynn says, when asked why he got the job.
Like Mr. Lutz, Mr. Flynn has already made a lot of things happen in his first couple of months on the job. The self-described "agent of change" has initiated a
dramatic cost-cutting plan that included about 700 pink slips, announced the release of the company's next-generation telecommunications switch, made at least
three key changes to the company's senior management team and, according to the company, improved sales in the critical U.S. market.
As with most new bosses, Mr. Flynn emphasizes the importance of communicating with employees, "including the bad news." He plans to move himself and the
company's other senior executives into smaller, more accessible offices and describes himself as an informal guy who made the point of going to both of the
company's Christmas parties.
"Pearse is definitely the sort of guy where you're comfortable just going in his office and grabbing a beer from the fridge," a former Newbridge employee says.
Analysts who have been covering Newbridge in recent years, however, have been more comfortable just going into their medicine cabinets and grabbing an
Aspirin. Even though it's grown rapidly in recent years to become Canada's second-largest technology company as measured by sales, Newbridge has been
viewed as an underachiever in recent quarters as it has steadily chipped away at analysts' confidence. Trying to pick up the pieces after issuing profit and earnings
warnings in six of the last 10 quarters, Newbridge has lost the Bay Street darling status that it enjoyed only two years ago as its share price climbed to $95 on the
Toronto Stock Exchange. It is now trading at $34.70.
When asked about Mr. Flynn's appointment, most analysts say they have little or nothing to say because the new guy is an unknown quantity. Some, however,
suggest his promotion looks at first blush like a back-to-the future move for Terence Matthews, the company's founder, chairman and chief executive officer.
When he hired Mr. Lutz about 18 months ago, the move was seen as a radical departure because Mr. Matthews was bringing in a seasoned operations
professional to act as a balance and foil to his own strengths: technology, marketing and connections within the company's key markets. But sources within the
company say the two-pronged leadership structure created a power struggle between Mr. Lutz and Mr. Matthews almost from the beginning.
If that's true, Mr. Matthews, who carried the bigger axe, won. The two signed an agreement not to talk publicly about their relationship -- or their breakup -- as
part of Mr. Lutz's parting gift.
By promoting Mr. Flynn, analysts say, Newbridge is clearly back in Mr. Matthews' control.
Mr. Flynn dismisses that. "Terry and I are going to build this thing together," he said on his first day on the job.
Like the Welsh-born Mr. Matthews, Mr. Flynn is also a gregarious and charismatic enthusiast who hails from the European side of the Atlantic Ocean. At least on
the surface, that should mean less foil -- between the two leaders -- and more harmony.
Ever-confident Mr. Flynn says he's betting on it. He plans to move his wife and three small children to the Ottawa area from their current home near Glasgow this
summer. "There is an absolutely exciting future here."
Mr. Flynn says he's been able to make a difference in previous jobs and he plans to do it again. "It's a leadership issue -- not a people issue or a technology issue."
As for the future of the 6,000-employee company, Mr. Flynn emphasizes that there's a big difference between putting something up for sale and selling it. "We've
got a go-it-alone plan," he says, deflecting his public relations officials' plan to stay clear of the company's ownership question.
Newbridge may or may not be sold, Mr. Flynn says, but the numbers must improve either way. "We have to deliver this quarter."
NEW BRIDGEMASTER
Name: Pearse Flynn
Job: President and chief operating officer
Age: 36
Born: Ballycotton, Cork, Ireland
Previous job: General manager, Europe, Africa and the Middle East
Family: Married, with three small children
Key personality trait: Non-conformist |
