Nortel's legacy still debated, 5 years after demise

While one former executive has published a new book celebrating the tech giant's role in innovation, an Ottawa business school hopes to get to the bottom of what went wrong.

Former executive pens memoir on culture of innovation at Northern Telecom

Nortel Networks filed for bankruptcy on Jan. 14, 2009.

Five years after former Canadian tech giant Nortel Networks filed for bankruptcy protection, former executives and academics are still trying to piece together what went wrong.

John Tyson spent 35 years at Nortel, starting out at Northern Electric in 1966 and working his way through a variety of roles, from an industrial designer to a vice-president of marketing to the head of the advanced technology department.

Tyson says Nortel's demise began in the 1990s when he said the company moved away from innovation and towards acquisition.

"The heartbreak occurred when Nortel took a significant right turn and went on a massive acquisition spree… which was a disaster," said Tyson.

"They took the fatal mistake of falling one step behind and from that, everything collapsed."

But five years later, Tyson doesn't want to dwell on the mistakes of Nortel, but instead wanted to celebrate what they accomplished.

He wrote a memoir, Adventures in Innovation: Inside the Rise and Fall of Nortel, set to be published Tuesday.

"I got so tired of hearing about Nortel in toxic terms," said Tyson.

BNR's role forgotten, says former exec

In particular, he wanted to tell the story of Bell Northern Research (BNR), the organization owned by Bell and Northern Telecom that helped spur the digital revolution.

Former Nortel executive John Tyson wrote a memoir celebrating the innovation at Northern Telecom and Bell Northern Research. (Julie Ireton/CBC)

"Somebody needed to tell the story and celebrate BNR, which is now gone. BNR sired a business that was capitalized at $300 billion and employed 95,000 people around the world," he said.

At its peak during the heyday of the technology boom, Nortel shares got as high as $124.50 a share, or $1,245 after factoring in the 10-for-one stock consolidation the company undertook in late 2006.

In 2007 the company spent $1.85 billion on research and development.

But it unravelled quickly, and in 2009 the company sought bankruptcy protection.

Even now, the legacy of the company is up in the air: retirees with the company continue to fight in bankruptcy courts for their share of the company's remaining assets, while a consortium of today's technology giants own an Ottawa-based company made up of former staff that pick apart gadgets for patent violations

U of Ottawa researchers studying Nortel

Nortel is also the focus of another major project. A group of Nortel executives are funding an international study at the University of Ottawa's Telfer School of Management.

Professor Jonathan Calof said the former Nortel executives are helping the researchers contact high-level former Nortel players from around the world.

"The reason all these people got involved is they believe there's a lesson to be learned from the failure of Nortel that will help others. They're committed to helping students and tomorrow's leaders," said Calof.

The study is expected to be released in late February.


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