Lucent Technologies on Monday announced that it has brought back former company executive Patricia Russo to be its new president and CEO.
Russo was named president and CEO of Eastman Kodak Company just eight months ago. She will replace current Lucent chairman and interim CEO Henry Schacht, who took over from Richard McGinn in October, 2000. Schacht will remain on as chairman of Lucent.
Russo was one of the original executives who helped spin-off Lucent from AT&T in 1996. During her tenure at AT&T and Lucent, Russo managed some of those two companies largest divisions and corporate accounts. That includes a term as executive vice president and CEO of the Service Provider Networks division, aimed at large telecommunications companies, which Lucent has identified as its core operation since restructuring in 2001.
"Pat brings deep knowledge of our industry and our customers coupled with the ability to lead a large organization through change," said Schacht in a prepared statement. "She brings her excellent sales and customer relationship skills back to Lucent, where she served all of our major service provider customers as the head of that business."
"Pat can come in without a warm-up and get right to work on our restructuring plans," said Bill Price, a spokesman for Lucent. "Were really excited about her return."
Russo has embraced the restructuring plans Schacht put into place in 2001 after Lucent saw its fortunes decline with the rest of the struggling telecommunications industry. Lucents stock has tumbled from around $21 in early 2001 to $7.10 at the opening on Monday. The company is also in the process of reducing its workforce from 106,000 to 57,000.
"Henry and the team have put in place and are implementing a solid, credible plan for turning this business around," said Russo in written statement. "Lucent and this industry have always been a home to me and I look forward to working with this team to accelerate the execution of our plan."
Henry Schacht said he would stay on with Lucent to help with the transition, but that he does not expect that period to last longer than one year.
Before joining AT&T in 1981, Russo spent eight years in sales and marketing management at the IBM Corporation. Russo also serves as a non-executive chairman of Avaya, Inc., a $6 billion enterprise communications business and that Russo helped turn around before it was spun-off from Lucent.
"What [Russo] gives the company is an insiders-outsiders view," said Chris Nicoll, vice president of Current Analysis, a Sterling, Virginia strategic intelligence firm. She comes back to the company with knowledge of its history and traditions, but also "the clarity of vision that comes when you leave a company, you kind of look back and say, Gee, I wish we would have done these things differently."
"Lucent likes to refer back to its history of Bell Labs and technical innovation," Nicoll said, but "whats driving the market is more practical matters: implementation, operation – the more mundane things." Lucent, needs to package and deliver these services with its products as strongly as competitors like Cisco, Nortel, and Alcatel, he noted.
"The key is, can Lucent create for itself a longer-term vision of how its going to play in the marketplace, and thats been the thing that been lacking in Lucent for the past few years," said Nicoll. "That, I think, is going to be her biggest challenge."