Indeed ... why?! No question that Mike Z., was given a tough job (with commensurate pay) when he assumed the role of Nortel CEO. Coming from GE, he had solid management credentials, that were further enhanced by a stint at a telecom vendor - Mot. It is, however, interesting to note that Motorola rejected Mike for the top job. Given their performance since that decision, it is hard to find fault in their choice. We now have some limited data to assess Mike's performance and forecast future results for Nortel. Of course, you don't expect a turn-around to have happened in 7 months, but you do expect the strategy to have been developed, and key elements of that strategy to be in play. So, what do we have? Well, a clear strategy has not been forthcoming, but there are some indicators that help us forecast where things are heading:

• Despite promises of new strategic direction, and focusing on a smaller set of business, there has been no signicant changes in the past 7 months. The former MPE(Neptune) project/product was terminated a few months ago, but the fate of that project had been all but sealed much earlier, given product delays that caused Nortel to miss important market windows.
• Mike announced in front of the analyst community back in January that Nortel would be unveiling a new R&D strategy within weeks. This is now June, without any announcement of significance.
• At about the 3 month mark of his leadership, Nortel announced their third recent attempt at a JV with a Chinese vendor. The previous two were; China Putian, and prior to that ZDE. For those of us with some knowledge of HuaWei, this relationship seemed particularly challenging. It has since unravelled.
• The high-paid help that Mike recruited has yet to make any visible impact (strategic or otherwise)
• Ongoing restatements have just further created cynicism as they have had the effect of restating earnings into the future, financially engineering the potential for creating the appearance of a turn-around.

From all accounts, Mike Z. is superb media performer. He appears to be at his best when in front of the media and analysts, remembering the names of even the most obscure analyst/journalist, and projecting both strength and confidence. Perhaps this accounts for the continual optimism about his leadership and the company's prospects. On the other hand, speaking to people within Nortel (at all levels and geographies), it is clear that any honey moon period with employees has long since past. From all accounts, morale is worse than it has ever been. Mike Z., and his new leadership have offered nothing at this point in time for shareholder's to be optimistic about. Given the lack of strategic and product differentiation, Nortel's only options is to focus on cost. Sadly, at this point, Nortel's best options in this regard, appear to involve the large number of engineers that remain in high cost markets - like Canada. Mike and company need to act quickly to arrest the slide (down over 30% since he became CEO) in Nortel's stock price, or risk a hostile takeover. Clearly, his media charm has not been sufficient.