What was the primary business problem facing Nortel Networks?

Nortel's customers began demanding integrated solutions involving multiple product lines, but the company's business units operated in silos, each serving its own distinct market.

What was Nortel's strategic response to this challenge?

In 1996, Nortel launched a large-scale Supply Chain Management (SCM) initiative to integrate its product lines, processes, and global locations to provide seamless, unified customer service.

How did Nortel structure the leadership for this change initiative?

A small corporate group from the global operations organization led the effort, establishing a governance system of cross-business-unit councils and teams, while implementation was managed by local sites.

What were the five core areas of Nortel's corporate change team?

The team was divided into Program Management, Process Development, Implementation Support, Finance, and Organizational Change Management to support the various facets of the initiative.

Nortel's Change Management: A Case Study

An Overview of Nortel's Strategic Change

A leading multinational telecommunications company, Nortel Networks launched a significant change program to adapt to evolving market demands. This case study details the structure and strategy of that corporate-wide initiative, which was designed for a highly distributed global organization with a lean corporate staff.

The Business Challenge: Shifting Market Demands

Nortel Networks historically operated with distinct business units, each successful in supporting different product lines for its own market. However, as the telecommunications market evolved, customers began demanding integrated solutions that required products from several of Nortel's business units.

This shift necessitated a fundamental change in how the company operated, moving from siloed business units to an integrated service model.

The Solution: A Global Supply Chain Initiative

In 1996, the global operations organization responded by launching the Supply Chain Management (SCM) initiative. This major change effort aimed to integrate multiple product lines, processes, and locations to provide seamless customer service across all Nortel Networks products. Key components included:

Major process reengineering.
Implementation of an Enterprise Resource Planning (ERP) System.

Governance and Implementation Structure

Leadership for the change came from the senior vice president of global operations and his team. However, the implementation itself was decentralized, managed by approximately 30 local sites within the various business units around the world.

Cross-Functional Collaboration

A high level of collaboration between the various lines of business (LOBs) was essential. To facilitate this, a governance system composed of cross-LOB councils and teams was established.

Corporate Team Structure

The corporate global operations team that led the change was organized into five distinct areas to manage the program effectively:

Program Management: Responsible for establishing and tracking program and project milestones.
Process Development: Coordinated and managed the process reengineering aspect of the change.
Implementation Support: Provided support to the local teams during the implementation phase.
Finance: Managed the budget and served as the liaison to the corporate finance organization.
Organizational Change Management: Focused on supporting the people-related aspects of the entire change effort.

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Nortel Case Study:Multinational Data