NEWBRIDGE NETWORKS CO-PILOT FLYING ALONG NICELY, THANK YOU
ALAN LUTZ IS IN CONTROL
PREDICTED CLASH WITH FIRM'S FOUNDER TERRY MATTHEWS HASN'T HAPPENED
By Jill Vardy Financial Post
Ottawa. When Alan Lutz took over as president and chief operating officer at Newbridge Networks Corp., some industry watchers predicted a clash of the titans between he and Terry Matthews, the chairman, CEO and biggest shareholder.
"Lutz'll do a good job - if Terry lets him", one analyst said.
But six months into his new job, Mr. Lutz says the two figures at the head of Newbridge are complementing each others' strengths and weaknesses, to the good of the company.
Analysts and investors appear to agree. Certainly the fortun of the telecommunications equipment maker and its stock price are steadily improving.
Rather than thwart any changes to his baby, "Terry has seen that it is necessary to transform the company," Mr. Lutz said, while flying on the company's jet to a meeting with analysts in Boston on Tuesday.
That transformation could include Mr. Matthews stepping aside as CEO in favour of Mr. Lutz some day.
"We've talked about it... I'm not pressing for that because I don't feel like I have to have it to get done what needs to be done at Newbridge. Maybe that would be a nice star on my report card later on but that's not essential right now," Mr. Lutz said at a conference organized by U.S. brokerage house SG Cowen Securities Corp.
For now Mr. Lutz is content to restore the credibility of Newbridge, hammered last year by missed quarterly results and the disastrous attempts to break into the local area network market by acquiring UB Networks.
"I THINK TERRY AND AL HAVE TURNED OUT TO BE A GREAT TEAM. HE'S GOT THE IDEAS AND I CAN PUT THEM INTO A STRUCTURE" Alan Lutz
The restoration project has involved a restructuring of Newbridge's research and development units, the firing of several senior managers, improved communications and sales teams, and road shows to convince analysts that Newbridge can remain a top player in a crowded market.
A lot of those improvements to the company were already in progress when Mr. Lutz was hired, Mr Matthews says.
"The guy didn't join the company to take it from the smouldering ashes. The fact is, the company was pretty successful, otherwise I doubt if he would have wanted to join," Mr Matthews said in a recent interview. "But is he taking control and generally running the company, the answer is yes"
Newbridge insiders say Mr. Lutz and Mr. Matthews work together surprisingly well, given the opposite personalities and management styles.
Mr. Matthews is a volatile, charismatic Welshman who created a cult of personality among his loyal employees.
Mr. Lutz, a former executive at Northern Telecom Ltd. and Compaq Computer Corp., is a laconic New Yorker that , by his own admission, "thinks in boxes"
Mr. Lutz attention to structure and detail are a useful foil to Mr Matthews' freewheeling vision, the former argues.
"The creative spirit that allows Terry to seize opportunities is the thing that does not allow him to hold on to them for a long time. Terry's not a details guy," Mr. Lutz explained.
"I think Terry and Al have turned out to be a great team. He's got the ideas and I can put them into structure." What Newbridge has lacked, Mr. Lutz argued, is a cohesive vision to motivate employees.
"I think context is really important, deciding what you want a company to be when it grows up,: he said toying with his breakfast on the plane to Boston. "Inside Newbridge we had nothing to unify the activities of 6,000 people."
Instead, too much was being left in the hands and the brain of Mr. Matthews.
"In a founder situation, everyone called God, the founder, and asked him what to do. And God told them. That's not the way to run a big business," Mr. Lutz said.
That dependence has been replaced by a real sense of accountability that has taken over at Newbridge," he added
Senior managers who come to Mr. Lutz for decisions are often asked "why are you asking me that question?"
Managers that didn't fit the new method of doing business have been shunted aside, including some of Mr. Matthews' most loyal staff.
For example, when Scott Marshall, former executive vice-president of Newbridge's switching products group, was fired recently, Newbridge insiders expected a battle with Mr. Matthews. Mr Marshall had been a Matthews accolyte since 1980, and the founder wasn't happy to see him pushed out.
"Terry's reaction was, I wouldn't do it, Al, but you're running the company so I have to go along with it." It wasn't a controversy at all," Mr Lutz said.
Similarly, the sale of affiliate Advance Computer Communications for $128 million in September is something Mr. Matthews is unlikely to have done on his own. "We were willing to get rid of it. That would not have been pursued under the old regime. We would have gone down the path of working hard to make it grow. Terry just can't let things go", Mr Lutz said. |
