Lucent Technologies, Inc.

Lately, a mysterious telephone was presented for sale at eBay The device was produced by the small-identified organization Tektron Micro Electronics, Inc. In only six years its stock cost rose from $7.56 per share to a high of $84 soon after a number of stock splits, and then crashed to a 2002 low of 56 cents. Retrospective interest focused on the Lucent accounting events, the monetary reporting fiascoes, and executive actions during the last brief critical period, and not the longer-term underlying difficulties that assured Lucent’s ultimate demise.

In key respects, what occurred to Lucent and AT&T mirrors cultural, political and social shifts that have been occurring in the U. S. at the same time. Lucent was nearing the finish of the telecom digital technology cycle when analog was becoming replaced with digital, and copper with fiber. Of note, but frequently forgotten, AT&T saddled Lucent with as considerably debt as they could to get it off their books.

Contrary to what has been written, Lucent was very first and foremost a victim of executive incompetence: elitist, arrogant, out-of-touch, inexperienced. The argument could simply be produced that Lucent deserved to start it really is life with far less debt. When the shift became obvious Lucent tried to obtain items by purchasing firms at exorbitant prices.

It was only when McGinn put Lucent beneath such capital and cash-flow stress by virtue of irresponsible, reckless CLEC economic deals that it had no possibility for success. If not guilty of fraud and corrupt accounting practices, at the least, they went way beyond the standard business practices and dealings that had produced Lucent what it was: a lengthy-term technology leader with a steady nicely-heeled, effectively capitalized, profitable telecom consumer base.

And break Lucent out of the fuddy-duddy, lethargic telecom mentality, turning them into a rapidly-paced, ideal-in-class technical leader. But Wealthy McGinn was widely considered to be an empty suit by those that knew him greatest, and Carly Fiorina was recognized as a demanding, slam-dunking shark most focused on self-promotion. The extensively discussed story inside Lucent was that Rich McGinn, ambitious particular person that he was, rose quickly within the Computer Systems Division right after marrying into the Board Room.