Pat Russo: Leading by Example

There's nothing flashy or overpowering about Pat Russo -- but her record. Ask her what her talents are, and you'll hear no false modesty in her matter-of-fact response, just a bit of genuine humility: "I don't usually talk about my talents. I think I've been blessed with the opportunity to have a number of different assignments that have given me a broad perspective on the business strategically, and... assignments that have enabled me to perform general management functions."

She certainly has. She came to AT&T in 1981, and held key positions in stategic planning, marketing, and human resources, eventually turning Lucent's Business Communications Systems into the company's second-largest business, before AT&T spun off Lucent in 1996.

When Lucent began acquiring companies late in 1998, it was Russo's job to make sure potential acquisitions met the company's needs, then to oversee negotiations and the integrating process. "I was charged with combining the strategic intent of the acquisition with the more tactical details of getting it done." Wherever Lucent's managers saw the need -- for "people, products, or technology" -- she along with the leaders of Lucent's business units would assess whether the particular capacity could better be developed within the company. When a decision to acquire was made, Russo and her teams would evaluate the company for valuation and fit before developing a negotiating strategy.

But Russo's role became even more important late last year when the company reorganized from 11 divisions into four, putting her in charge of the communications giants' products, sales, and service for Lucent's traditional customers (think telecommunications giants) as well as cable and enterprise networks. Having supervised the process of acquiring 30 companies for a combined price in excess of $32 billion, she now faces a sterner test: getting the most out of the talent and technology Lucent's acquired.

Nothing less will do, if Lucent is to resolve doubts about its struggles to maintain its position as number-one supplier and technology innovator for the communications networks of the information age. Analysts might quibble about whether this or that acquisition was right -- like Maribel Lopez of Forrester Communications, who believes "Ascend was a good acquisition, [but] I'm not sure what they've done with Yurie," a data- networking product. Certainly for a giant like Lucent fighting a variety of phenomenally-capitalized smaller companies, buying out a company isn't enough: the most must be gotten out of new talent and technology at each level. Or to put it another way, as analyst Jim Andrew of Renaissance Worldwide in Newton, Massachusetts points out: "All these companies they bought in the last couple of years came with very, very high quality managers and entrepeneurs. Their challenge is somehow to keep as many of those thoroughbreds as they possibly can and make them part of the Lucent bench."

Bringing in other companies challenged some old traditions. International Network Services (INS) was a leading-edge network designer/consultant and engineering firm. Russo understood that in the crowded and specialized world of data networks, INS would need to utilize technologies not belonging to Lucent: "We had to establish a somewhat arms-length relationship with other parts of Lucent." So, she helped created a separate business unit for INS, incorporating Lucent veterans from their own established network services, which already included maintenance and installation and 24-hour remote monitoring and diagnostics of multi-vendor data networks. Other acquisitions might bolster geographical strategy: so with Lucent putting a special emphasis on international markets, they bought a call-center company in the UK called SDX. "They had extensive channel distribution capabilities in Europe -- a low- end call center product that was important for us. There's a case where we actually bought the company and then made that company sort of the hub of our European product capability for the enterprise business."

Communication is the underpinning of the delicate process. "First and foremost you need the attention and involvement of the senior leadership team to help get decisions made quickly.

"It's critical to focus on the individual, because one of the most important things you are doing is adding skilled, talented people to your team." Lucent's deep pockets help, since as she points out, "experience has taught us that their most frequent question is 'What does this mean to me?' Communicating with people with that question in mind is one of our prime activities."

But "let's be real clear. None of them are working for money. They're working because they see tremendous opportunity by being part of the Lucent team by having access to the broad capabilities technologically that Bell Labs offers, and by having access to the broad set of customers that we have.

"So they're here because they believe they can make a difference. ... [and] because they see a lot of opportunity, not because they need the paycheck."

When Lucent people talk about Pat Russo, it's apparent that she can make things happen, and speedily. So far, creating tighter connections between research and the business units that bring products to market has cut the time from research to product by 40-50 percent since Lucent's formation, Russo says proudly.

She points to the company's Cable Communications Group, which started out as an idea in the early spring of 1999 when Lucent committed to getting back into the cable-TV infrastructure business. Dee Dee Nye, who heads the cable unit, remembers it as "kind of fun, because the early-on discussions between Pat and myself were along the lines of 'How do you leverage resources in a large company, and act like a startup?'"

The first step was talking to potential customers. "A small group of us went and talked to the executives from the major players in the industry -- like General Instruments and Comcast -- and then met with potential partners," recalls Nye. She credits much of the team's progress to Russo's responsiveness. "If I needed an answer or a decision, I got it in a day. Now, you've got to understand, from a hierarchy standpoint, I'm down a couple levels -- I'm not an officer of the business -- but whenever I needed help from her in order to break through bureaucracy, rip down roadblocks, contact the senior person at another organization or get involved with a customer -- I just needed to provide her the data and it was done in a matter of hours or days.

"I don't know if you've ever worked in a big company but these behaviors are a little bit unusual. She has a nice way about her of forming concensus viewpoints and tapping resources across a large organization and having people work well together. She never hesitated to call in the president of Bell Labs research when we needed him." In less than a year, the Cable Communications Group has grown from three employees to over 300, having established itself as a leading industry player, conducting trials with Comcast and Union for IP telephony over cable.

Nina Abersano, President of Lucent's North America Service Provider Business, appreciates Russo's selflessness. "Pat is collegial -- she values the input of the people in the organization, seeks their thinking and their advice on subjects and issues... The sense that you get is she's listening, and then moves quickly to make her decisions. So you feel valued, and you feel part of the process -- but you also don't feel that the process is taking forever to complete.

"Last week I was sick and she jumped in and helped close some deals that we had to close. Didn't even think twice about it -- not, 'Well, I'm the president running this big business.' "Then she called me up to let me know what she'd done, and said, 'How are you feeling, we're worried about you.'

"She's an amazing gal, she really is.'

Russo herself credits Rich McGinn for fostering an open and diverse environment (in a Fortune study done last year, the company placed in the top ten in ethnic diversity). "He's someone who absolutely values diversity in the organization -- he really values different ideas -- wants to hear different experiences, different backgrounds, different perspectives."

What motivates Pat Russo? "I really like the people -- it's really a great leadership team. At the end of the day, any individual, I don't care where you are or what company you're with or what place you're in, wants to know that they can make a difference, they can have some fun. And, at least for me, can collaborate with a group of people that I respect. And I have the greatest respect for the leadership team in this company. And I enjoy being a part of it -- I value those relationships, I respect those relationships, and that had made it a particularly rewarding experience."

For everyone involved, it seems.