Google Company Structure Business Policy by ywf31408

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									                                                           Monograph
                                                      BUSINESS INTELLIGENCE
                                                          DEPARTMENT




ALCATEL-LUCENT VS. GOOGLE

How organization determines success ?
                          27/12/08




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       EXECUTIVE SUMMARY
In 1998, Google was embryonic with only two students and an innovative solution promising to
face world IT giants. In less than a decade, Google became a defiant rival to Microsoft’s near-
monopoly. On the stock-market, the value of Google reached c. $210 billions by December
2007 and endless growth opportunities.


Also in the technology market, Alcatel accumulated eighty years of innovation history, six Nobel
prizes and a large portfolio of products (such as semiconductors solutions or Internet protocols),
and it merged with Lucent in 2006. The new formed giant promised to become a powerful faster
player in the ever-more-competitive IT market. In September 2008, however, the Alcatel-Lucent
stock-value was half Alcatel’s alone former quotation.


For both companies, innovation seems to be a critical success factor in granting both growth
and long-term sustainability. Yet Google seems to be far more successful at designing a
corporate strategy and respective organizational design to deliver it, whilst Alcatel-Lucent
seems to be lost both in Franco-American translations and strategic forecasting.


This paper compares both organizations from the 3 lenses perspective –strategic, political and
cultural- and suggests cues to why organization design has played a critical role in Google's
success and in Alcatel's dismal failure. As we will hopefully be able to show, Google has
created an organization built to serve and service innovation whilst at Alcatel-Lucent innovation
seems to exist so that the organization can be served.




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         GOOGLE INC.
Google Inc, with yearly revenues1 mounting to US$16.593 Billion, receives more than 90% of its
earnings from advertising systems developed or perfectioned within the company.
The company was started in 1998 co-founded by Larry Page and Sergey Brin and today
employs 20,123 people2. Their mission is to organize the world's information, to democratize
people's access to it and finally monetize all these efforts.


In such an environment, Google needs to be innovating constantly. The internet Industry
changes at a never seen pace. Anticipating the way people expand their use of the Internet is
crucial to keep and increase Google's audience and influence amongst people and appeal
towards advertisers.


Google understood that innovation needs to be nurtured in an environment where people feel
stress/fear free, passionate about what they do, believing they are doing something that matters
to others and in ways that can be appropriately rewarded and recognized. Hence, it developed
an organizational structure that is flat and pressure-free, it developed a culture that does “no
evil”, provides a value system that gives employees a passionate sense of belonging and finally,
a political environment where innovation generation is rewarded and awarded by top
management close involvement.



         ORGANIZATION FOLLOWS STRATEGY: "GOOGLE.ORG", OR HOW
         GOOGLE FOSTERS INNOVATION.
At the top, Google is lead by a triumvirate3 composed by the two founders and by the CEO, Eric
Schmidt. As world history tells us, usually this is a short lived way of governing, but in Google's
case this triumvirate managed to divide the tasks through a symbiotic way, putting together,
market experience, out-of-the-box thinking and capacity to systematize ideas4.
Google has not a typical divisional or business-unit, organizational structure. The organization
can be roughly divided into two realities at Google: the engineers and the rest.




1
  Financial Report 2007 - Google Inc
2
  30 September 2008 - Google's 3rd quarter results
3
  http://en.wikipedia.org/wiki/Triumvir
4
  www.mckinseyquarterly.com - interview with Eric Schmidt

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The "rest" of the organization, mainly sales people, tends to have a more functional and
hierarchical structure. Usually divided by countries/regions comprised by a country manager
reporting to a regional manager. The sales force serves across all Google projects as the
advertising tool is in most of the aspects interconnected between products5 .
The engineers are at the core of innovation and new products emerge from their research and
work. The engineer organization is the most different and characteristic feature of Google,
inspired by the "Wisdom of Crowds" principle, that states that groups make better decisions
than individuals6 .
The only way a good decision can be made is through the omnipresence of information. And a
traditional hierarchical organization would not answer these needs. The information has to run
in a flat way so that collaboration is possible across units and the best ideas arise.
The decisions tend to be reached through consensus and the final conclusion usually is
different from those that started the discussion7.


Every engineer posts on the intranet what he is doing and this information is accessible to
everybody else. Through this project database, together with a democratic voting scoring tool
that sorts the interest of new project that are being developed, the best information possible is
reached and productivity should not be affected - "colleagues make the best judgment"
At a deeper level, when projects are at a more developed stage and decisions have to arise,
there are two essential criteria needed to reach the best solution. The existence of a deadline
and of a dissident.

A deadline should be enforced by the leader, so that an outcome is reached. This can be
reached either from an existing real crisis, or from artificially creating one. The dissident enables
the team to promote discussion and makes it comfortable to have people that otherwise would
be afraid of expressing their thoughts to talk.




5
  At the beginning the advertising revenues came solely from the search portal. Today the advertising is originated in
distinct products such as YouTube, Gmail, etc
6
  www.mckinseyquarterly.com - interview with Eric Schmidt
7
  Eric Schmidt on interview - http://blog.wired.com/business/2007/04/my_other_interv.html

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           COMPANY CULTURE: VALUES, PRINCIPLES, PERKS                                       AND THE
           GOOGLERS
In general, culture, defines an organization's innovation ability. Many times Google's culture is
compared to a University. It's a place driven by innovation that manages more than 200 new
ideas at the same time.


Talented people are Google's key stakeholders, not exactly the shareholders and that is clearly
stated at Google's IPO letter - "Our employees, who have named themselves Googlers, are
everything. Google is organized around the ability to attract and leverage the talent of
exceptional technologists and business people. We have been lucky to recruit many creative,
principled and hard working stars. We hope to recruit many more in the future. We will reward
and treat them well."


This spirit is embedded in every single detail. Google's principles are stated everywhere, like the
Top 10 reasons8 for working there. Culture plays a very important role at Google, in a way that
enforces people to self-organize around the most interesting problems.
Nevertheless, the success of this model does not depend solely on these rules or tools. It goes
beyond that. The company's culture, the type of people recruited or workplace environment play
equally important roles on the successful outcome. Certainly Google has been able to get the
right people to accomplish its mission. From recruiting the CEO who gave structure to the
explosive creativity of the founders to each of engineers that keep the innovation pace at the
company.


Google has been rated several times as the #1 company to work for. There are several
anecdotes and a lot of speculation on what is to work for Google, especially concerning their
workplace, the perks, etc.




                            Figure 1 - http://imgs.xkcd.com/comics/working_for_google.png



8
    http://www.google.com/support/jobs/bin/static.py?page=about.html&about=top10

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The Mountain View HQ - Googleplex- facilities, is certainly a very different place to work. From
the personalized cubicles, to the abundance and variety of gourmet food, the doctors available,
the car washes or the dry cleaning. These are some of the well known perks Googlers -petit-
nom for Google's workers- can enjoy.


Other very famous characteristic of working at Google is its workload distribution - 70-20-10 -
i.e. 70% of time allocated to company projects, 20% to personal projects that have a direct fit
with the company's portfolio, and 10% to indirectly related company projects of individual
interest (Android started by being a 10% project).


Perks are nice, especially because of the comfort they bring, but actually the most important
feature around them is the underlying message -Google is a company that cares for its
employees-. It is clear that Google, targets for the brightest people as it states through its
corporate site9.They do it investing heavily in branding, in networking in balancing workload
distribution and in providing a unique value system people can easily relate to. Google's brand
effect is something that surely cannot be downplayed. Being the most successful Internet
company surely attracts those that look with passion to working at this sector, namely
engineers. As for the network effect, Google is known to have the smartest people, those who
are smart and like to be challenged (exactly what Google looks for) would choose to work near
smart people. Finally, the workload distribution. Its 70-20-10 formula means that people can
pursuit projects they are curious or passionate about. This possibility is very uncommon in the
corporate world, and certainly very alluring for the smart engineer that has a way of exploring a
personal idea. Finally, the allure Google created around the company -The unofficial motto is
"Don't be evil"10, the philanthropic activities or the free access policy to the Internet they have
pursued, all indicate towards a company that cares about the society and establishes a new
model of corporation. Working for Google, especially as an engineer is strongly connected to
having a positive impact, either in the virtual world, in the company or in society.




9
    for instance at google.com/jobs
10
     www.wikipedia.org/google

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It would be reasonable to admit that people that work at Google, do work there because are
passionate about the company and not exactly because how much they earn there. People,
rather than thinking of how much they earn are motivated by the impact they may produce. This
is why, that after the IPO, more than 1000 googlers became technically millionaires and few of
them abandoned the company. As Eric Schmidt stated passion is the productivity booster
Google relies on11.


Google has a developed HR system that comprises direct 360 º performance review, HR
coaching visits -some kind of a priest, to whom a Googler can talk about whatever worries him-,
therefore it is easy to know who is not satisfied.


The reward programme depends either on a substantial contribution for the development of a
new product, with bonuses over $1 million, or on the yearly performance review. As stated by
one of the interviewed people, due to the current crisis, those who were to earn big bonuses
from a superior performance will still earn it, and others who would be receiving a small bonus
(according to previous years' policies) would receive a new Google Phone during current year.
Recently, there have been many news stating that many of the perks became "more frugal", as
we see it. It does not seem clear that this new policy will have a negative impact on the
perception googlers have of the company. We believe it is a subtle way of connecting the
company to the financial crisis the world is living and to induce people to react at difficult times -
as Marissa Mayer, Google VP said "scarcity brings clarity" 12.


Behind Google’s organization, there is a strong internal culture supported by performance,
recognition and motivation. If a Googler does his best, the company will help him for his
projects. It is a “win/win” belief based on money and pride. This culture is far from the equality
principles in countries like France where recognition is often immaterial or spread. It is also far
from former large and old state companies like Alcatel-Lucent where personal behaviours don’t
necessary merge with management orientations.




11
     http://blog.wired.com/business/2007/04/my_other_interv.html - Interview with Google’s CEO
12
     http://www.businessweek.com/technology/content/dec2008/tc20081214_636046.htm?chan=rss_topStories_ssi_5

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            GOOGLE AND POLITICS

On the political level, Google’s triumvirate is also a great example of how a structure can work if
there is a clear common vision for the company. As explained in Google's IPO letter13, "This
works because we have tremendous trust and respect for each other and we generally think
alike. Because of our intense long term working relationship, we can often predict differences of
opinion among the three of us. We know that when we disagree, the correct decision is far from
obvious".
Behind this vision, the systemic organization focuses on innovations. These innovations are
produced either by single persons or by small-groups. In the product development process,
decisions are reached through consensus. The assumption is that organization problems are
mostly due to individuals that are not ready or open to discussion. Therefore innovation is only
produced if people are not afraid to disagree and if disagreeing does not imply conflicts.


Basically innovation comes when people are not "under the gun" and when the decision process
is done through buy in discussions rather than top-down decisions.


Moreover, the relationship between the top management and googlers is crucial to foster this
ability to criticize and to innovate. For instance, in the Googleplex, there are no exclusive offices
or regal bathrooms for the top-management and there is no dress code. This environment
makes it easier for workers to feel in a safe place where they only praised for having a better
idea.


Besides, one might think that the company has two unbalanced groups, the engineers and the
others. In fact, the information policy within the company makes it fairly evident that the
company depends on innovation, and innovation results from the work of engineers.


Nevertheless14, the general feeling is that the company is really fair. Googlers have tools to talk
and communicate about what they feel should be changed. There is a large ability to make
suggestions, which most of the time finish in business plans, usually led by the idea proposer.
Therefore, we can argue that Google is not a very politicized company and mostly works like a
hive.




13
     1998.
14
     After discussing with a Googler - December 2008-. This feeling mostly comes from the sales department.

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      I.     ALCATEL-LUCENT
Alcatel-Lucent is the 2006 merge between two old and large respectively French and American
firms -Alstom and Lucent-. Alcatel-Lucent is specialized in telecommunication equipments -
Wires, networks hardwares, technologies such as GSM, GPRS, UMTS,…- in a highly
competitive market. Its R&D departments produced 6 Nobel prices15 and various innovations
such as semi-conductors16 and Internet IP processes17. From 1996 to 2008, Alcatel was
managed by Serge Tchuruk, one of the former CEOs of the French petroleum company Total.


In 1995, the two groups were cumulating more than 40 billions USD incomes in a wide range of
businesses -defense equipments, railways technologies, nuclear business, aerospace (…)-.
They were also managing more than 200 000 different people. After ten years of reorganization
and assets sales, the Alcatel-Lucent represents now 17,7 billions18 euros incomes and 70 000
people. The net income is (3400) millions euros.


In July 2008, the two company key people, respectively President Serge Tchuruk and CEO
Patricia Russo, have been pleased for their lacks of financial results and strategy forecast. In
September 2008, the Alcatel-Lucent stock value19 was 50% below the former quotation of
Alcatel alone.


During the 2006-2008 period, M.Tchuruk and Mme Russo have been part of multi-millions euros
golden parachute scandals. More than 30% of the top management has left the group. Five
social plans have occurred for more than 15 000 dismissals. These programs involved various
activities from R&D to after-sales. In December 2008, focusing again its business in the
telecommunication equipments, Alcatel-Lucent was about to sell its 20, 8% shares in one of the
major French defense system group, Thales20.




15
   Source: Bell Labs.
16
   Source: Bell labs.
17
   Source: Alcatel
18
   On one hand, the mechanical branches of the company, Alstom – Steam equipments (…)-, the chantier naval – Ship
building, (…)- have been sold by S. Tchuruk. The aerospace division –Satellites,…- have been sold to EADS. The
production of mobile phone has been stopped. Alcatel was in the top #10 in the business. On the other hand, Lucent is
the result of the split of IT&T. Pat Russo managed the reorganization of Lucent’s business.
19
   NYSE: ALU.
20
   http://bourse.lci.fr/news.hts?urlAction=news.hts&idnews=AOT081118_00008147&date=081118.
As declared by Dassault itself in the business newspaper Les Echos the 22/12/08, The stocks should be bought by the
French aircraft company Dassault Aviation.

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Even if a worldwide strategy was required, the repeated management choices and top
management behaviors may have mortgaged the future growth of the group, formerly based on
large and innovative projects.



         STRATEGIC PERSPECTIVE                      21




Innovation, as in Google, is also a Critical Success Factor at Alcatel-Lucent.


Alcatel-Lucent is a technology company that has to present new solutions so that it develops
new products and creates new markets. As in every technology driven company, innovation is
crucial to keep an edge over competitors.


Alcatel-Lucent created a new organization after their merger. Analyzing the organization at
Alcatel Lucent is learning two things: how the shape of the company’s flow-chart privileges
decision-making and how it deals with innovation.


Since the merger and up until the end of 2008, Alcatel-Lucent has been structured around a
mix of geographic, business and functional divisions22. The evident trend has been a transfer of
activities from western countries to emerging markets, such as Singapore or China. This
organization has been centralized around the CEO.
Reporting to the CEO, we have every sort of divisions: regional sales divisions, business
divisions -such as services business, enterprise business, carrier markets- and finally acting as
functional divisions, HR/Communication, Technology & Strategy, Financial Office and the
Administration Office.


Sales have been divided into regionalized geographic divisions to respond to local demand. For
instance, there is a business division for Europe, one for North America and one for Asia.


Each of the three business divisions has been responsible for marketing and product
development within the scope of each business. These divisions have been in charge of both
regional markets and technologies. According to the company23, the purpose of this
organization has been to focus product development on local customer demand. It was also to
finance future growth through the enterprise and services divisions, the company cash cows.


21
   Source: Le Monde - 09/09/06.
22
   Please read the appendix #1 for more details.
23
   October 2006, presentation of the merge to the financial community. http://www.alcatel-lucent.com

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     WHAT ABOUT THE INNOVATION PROCESSES ?
The Research and Development area, the core of innovation, lays split between the French
Chief Technical Officer and the American Bell Lab’s director. Both of them report to M.Quigley,
Vice President in charge of Technology, but also of Strategy.
These divisions in charge of both markets and technologies were not directly related to the R&D
but to a specific marketing Vice-president. The purpose of this organization was to focus
product development on local customer demand. It was also to finance future growth through
the enterprise and services divisions, the company cash cows.
To end, if an integration manager in charge of the operational merge of the two groups reported
to the group CAO, the organization was designed to establish a geographic and cultural
equilibrium between the two former companies.
The designed purpose was to share decision making between the former management of the
two companies. This double and binational management went also on the board where
decisions were shared between Serge Tchuruk, the French non-executive president, and
Patricia Russo, the American CEO.


The design of the post-merge flow chart was supposed to maximize synergies24 between Alcatel
and Lucent. It probably followed the script of the pre-merge documents that previewed
synergies after the deal. Nevertheless this new organizational chart, shaped a complex decision
chain with management split on both sides of the Atlantic and Asia.


The current flow chart turned the current CEO, Pat Russo into a referee between the different
divisions rather than into a long-term decision making officer.
Mme Russo had the difficult task of prioritizing between multi-product sales from different
geographical zones and multi-requirements from marketing and product development divisions.
Leaving behind the role of defining and applying a global strategy for the company.


Regarding innovation, both Bell Labs25 and Alcatel R&D center –CTO- appear not to be a
priority within the organization26. These were not directly under CEO’s responsibility like sales or
product development. Although R&D used to be the former growth pillar of both Alcatel and




24
   Source: Alcatel-Lucent, 01/12/06 – 1,4 billions euros economised with the merge. Presentation to the financial
community in October 2006.
25
   Please read Circuits Assembly NOVEMBER 2008 - The future of R&D.
26
   The last two Nobel prizes from Bell Labs left the company for Stanford University.

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Lucent, today its relevance was somehow moderated within the Strategy and Technology
division.


Again, innovation management at Alcatel-Lucent is based on transverse project teams able to
work in an international context and with, at least, four divisions -The R&D, The carrier market,
The geographic zones, The Administrative division27-. These transverse teams had also to
report to diverse vice-presidents in France and in the US.
This complex organizational scheme resulted in numerous transversal teams, in numerous
reports, in wide internal IT and in complex quality systems28 to normalize the processes. The
first consequence was probably the deceleration of the innovative process29.


         POLITICAL PERSPECTIVE
Two aspects play central roles in shaping-up the political landscape of the company: the
relationship with the unions and the divisive corporate governance model chosen to
accommodate the conflicting egos of both American and French leaderships.


     THE ROLE OF THE UNIONS
French unions are used to get involved in most management decisions taken by big
corporations in France – a legacy of the highly regulated economic environment of the country
where large state-sponsored projects (Airbus, Nuclear Power, TGV) supported by state-owned
companies (where unions are strong and ever-present), drive the agenda of the economy. The
unions are involved through a consultative board -Comité d’entreprise-30 and are present and
active both at the working class level as well as in middle management.


On the other side of the Atantic, AT&T -The American conglomerate where Lucent was born
from- was also the cradle for of US’s first created unions – CWA, Communication Workers of
America-. As in France, it was a powerful force to engage with, as it faced the split of AT&T and
the reorganization engaged by the “cost-killer” Alcatel-Lucent CEO Pat Russo.




27
   The administrative division used to be implied because it managed the supply-chain and IT - Please read appendix #1.
28
   Source: www.cio.com - APRIL 15, 2008
29
   Source: Shareholders meetings - June 2008 - Underlined when the President and the CEO resigned in July 2008.
30
   Source: Alcatel-Lucent 2007, 2.6% of the company belongs to labours and middle management.

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     THE FRENCH AMERICAN DEVIDE
Whilst officially the company’s management was officially shared between the French president
and the American CEO, the reality is that the merger resulted essentially from the takeover of
Alcatel over Lucent. Serge Tchuruck, the French charismatic president of the company, was in
fact the architect of the merge – and to prove his influence, in 2007 the Board modified the
President’s status allowing M. Tchuruck to keep his position after being 70 years old31. In the
2007 Alcatel-Lucent annual report, the first four pages were dedicated to the President,
confirming his preeminent position in the company.


Clearly, there was a clash between M. Tchuruk -The French President- and Mme Russo -The
American CEO- as both was widely known for their large ambition32 and tendency to implement
drastic management plans.




                          Figure 233 - Unions cartoon parodying Pat Russo & Serge Tchuruk34


This divide was clearly felt early in 2007, when the operational part of the merge began mostly
because of lack of internal communication and understanding between the strong Unions on
both sides of the Atlantic and a divided management front.


31
   Source: Annual report 2007.
32
   Please read their Biography on Wikipedia.
33 st
   1 cartoon, “We are sinking, what do we do Pat ?, Pat: Leave weight. We have already fired 12500 people who will have
problems to survive. Pat: It’s their problem. Pat, the management is leaving the ship, happily, they do have solutions”.
  nd
2 cartoon, “Thierry B. (Thierry Breton former French economy minister and supposed manager to succeed to S.
Tchuruk). Serge, Pat, you are finished for a long time! Leave this company, Largarde (French economy minister), heu, I
wanted to en garde (be ready to fence).Serge: You will have nothing, Alcatel will die with me. Pat: Go on Serge, Keep the
job”.
34
   Source: http://www.cfecgc-alcatel-cit.org/article-847332.html

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As a consequence, the CWA and the French Unions also did their merge35 and began a
systematic fight against top management – Including the use of media-buzz tactics (i.e. they
informed the small shareholders and the media about the S.Tchuruk and P. Russo’s golden
Parachutes36)-. During the 2007 annual shareholder meeting37, they squatted the meeting room
and alerted the mass media about the group’s difficulties.


The omnipresence of the president, the involvement of the CEO in all the decisions and also
their lack of ability to appear united and walking-the-talk became a common target for the
unions.


A year later – in the summer of 2008 - Serge Tchuruk and Pat Russo were dismissed as a result
of the media frenzy pressuring both the shareholders and the French Government.



          CULTURE AT ALCATEL-LUCENT                           38




     UNDERSTANDING FRANCE BEFORE UNDERSTANDING ALCATEL

The Alcatel-Lucent merge – apart from being a business sensible idea – implies the merge of
two organizations crafted in cultural landscapes that are sharply different one from the other:
French and American.


The easiest way to understand French attitude is to read Asterix & Obelix39, a popular French
cartoon series. Another way is also read authors like the Roman Strabo40 or the French
Voltaire41. Both display a commonly accepted analysis that sees France’s policy as both a social
and political reaction to an American-led world. The French do not reject globalization but resist
all Anglo-American models of it42. France wants a global market with rules and institutions to
enforce them -a French legacy-, as opposed to a self-regulated market economy -Liberal
thinking from the new-world-. France believes to be endowed with a mission of providing a new
world order. So does the US.


35
   http://files.cwa-union.org/ComTech/Petition-en.pdf
36
   Source: Press - 08/09/08.
37
   http://www.dailymotion.com/relevance/search/alcatel-lucent/video/x28p90_alcatellucent-ag-actionnaire_business
38
   http://www.understandfrance.org/French/Attitudes.html
39
   Already in the Roman days, the Gauls were very "French".
40
   58 BC-25 AD Livre IV Chap.4
41
   http://fr.wikipedia.org/wiki/Voltaire
42
   Origins can also be found during the wars between France and Great-Britain.

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     Figure 3 - How the French Union CGC-CFE from Alcatel-Lucent seens the merge and the transfer programs. It is a
                               reference to the French popular cartoon Astérix & Obélix43.


Alcatel like Lucent used to have a strong internal culture based on innovations and large
projects. The former two groups launched the MP3 technology, the high-speed train, satellites
communication devices etc. In France, working for Alcatel was prestigious and meant being part
of something great and unique. Part of the role France was supposed to have the world wide
order. Importantly, that was something felt across the entire country because Alcatel branched-
out in small and medium-size cities supporting generations of workers coming from the same
communities. A long tradition of grandeur was supported by a strong internal culture and a
language and lexicon of its own within the company.


The new management team -An American CEO and a North-American Educated French
President44 - should have been more knowledgeable about the overall “French-culture” factor as
well as of the solid entrenched corporate culture inherited from Alcatel. Refusing to discuss with
unions and social partners45, refusing to understand Alcatel itself, and to finally start global
product transfers to Asia without involving the strongly unionized middle management, were
unnecessarily mistakes that lead to a massive internal breakdown with French workers. All-in-all
French unions understood the merge as an American intrusion in French behavior embracing
the fight against management more as a cultural battle than a business sensible dialogue in
order to win the marketplace.




43
   Source: http://www.cfecgc-alcatel-cit.org/article-847332.html- “We are in 2006, all the Alcatel sites have be transferred
to China ? All ? No sites like Lannion Orvaut resist again and again !”.
44
   Source: http://fr.wikipedia.org/wiki/Serge_Tchuruk. M.Tchuruk started his professionnal experience with Exxon in
the US.
45
   A French expression says that diplomacy is not to discuss with its friends but with its enemies.

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     WHAT HAPPENED NEXT ?                    46




Since the resign of Pat Russo and Serge Tchuruk in July 2008, the company has been under
the leadership of Ben Verwaayen47 and the non-executive president Phillipe Camus. Ben
Verwaayen is Dutch with a strong experience in Great Britain and Philippe Camus is French and
lives in New-York. Both recognized, recently, the failure of Alcatel-Lucent.


During the 12/12/08 conference, M. Verwaayen confirmed the merge of the Bell Labs and
Alcatel’s R&D in one entity under the CTO. He confirmed 1000 more dismissals in the middle
management and a strong cost reduction plan.


Moreover, he also confirmed than the future of the company was in innovation. More than ever,
Alcatel-Lucent is looking for a future in a highly competitive market. The Dutch M. Verwaayen
and the French M. Camus should understand that the success of the merge in probably more in
the ability to motivate people, to produce innovation and to take in account the political and
cultural specificities of the two former companies, rather than in managing the group without a
strong team spirit48.




46
      http://www.lesechos.fr/info/hightec/300316638-alcatel-lucent-vise-un-resultat-d-exploitation-proche-de-l-equilibre-
en-2009.htm
47
   http://www.cfdt-alcatel.org/wp-content/uploads/2008/11/bv_131108_cfdt.pdf
48

http://www.businessweek.com/globalbiz/content/dec2008/gb20081212_057878.htm?chan=globalbiz_europe+index+pa
ge_top+stories

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    II.      KEY CONCLUSIONS

While comparing Google with Alcatel-Lucent, three key points turned up in what concerns their
respective organizational strategy.


         Google’s strength is clearly its focus on innovation: the organizational chart is flat, ideas
          flow bottom-up, there is no territorial ownership for innovation and leadership is deeply
          involved in all aspects of its development. For Alcatel-Lucent on the other hand, the target
          is a difficult mix between transfers, innovations, profits, rationalizations, Franco-American
          decisions, mostly focused on processes and no concern about results.


         As for culture –a critical organizational enabler for any company strategy– Google seems
          to have designed it more consistently. The Googlers are currently the symbols of Google’s
          success. The Googlers are the product of Google’s HR and CEO’s vision. In contrast Alcatel-
          Lucent’s teams have not developed any common language or charter to link all the
          innovation efforts across the presence of the company worldwide.


         Finally, Google’s rules seem to be simple and based on recognition and excellence at work.
          On the opposite, the lack of exemplarity of Alcatel-Lucent’s top-management voids the
          teams responsible for innovation of motivation and sense of purpose.




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                              Phone: +33 (0)1 53 32 46 00 - Fax: +33 (0)1 42 82 01 00
                APPENDIX #1 - ALCATEL FLOW CHART

                             Patricia Russo
Serge Tchuruk                CEO
President

                                  F. Rose
                                  Asia-Pacific


                                  C. Christy
                                  North America


                                  O. Picard
                                  Europe & South


                                  V. Molinaro
                                  Europe & North


                                  J. Meyer
                                  Services business


                                  H. de Pesquidoux
                                  Entreprise business


                                  C. Guillaumin
                                  Communication


                                  C. Pedini
                                  HR/Communication


                                  M. Quigley
                                  Technology & Strategy



                                        H. Kris toffers en
                                        Strategy
                                        J .Kim
                                        Bell Labs
                                        O. Bajjard
                                        CTO


                                  J.P. Beaufret
                                  CFO


                                  F.D'Amelio
                                  CAO



                                        C. Reinaldo
                                        Integration
                                        M. Lehnic h
                                        Supply chain & procurement
                                        J . Giere
                                        CMO
                                        E. Hackenson
                                        IS/IT
                                        B. Carapezzi
                                        Legal

                                  E. Fouques
                                  Carrier markets



                             M. Chan                  M. Rahier
                             Wireless                 Wireline


                             M. Rouanne
                             Convergence




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