Is Russo right?

Did Lucent Technologies Inc. do right by tapping 20-year veteran Pat Russo to lead the company into the future?

She seems a logical choice: After two decades at AT&T Corp./Lucent, including executive positions selling to the largest, most important customers, she knows the business cold. She can hit the ground running, as they say, and pick up right where Henry Schacht left off with nary a hitch, despite having spent that last nine months as president and chief operating officer of Eastman Kodak.

"Russo is the 'insider' that Lucent hopes has been 'outside' long enough to bring a fresh perspective to the company's issues," Current Analysis Inc. Analyst Chris Nicoll says. "Lucent is getting something of a new/old perspective bringing Russo back."

But that's what's troubling to some people. Pat Russo is too inside. All she knows is the same old game. Lucent needs to go in a different direction with some different blood.

Also, Russo was part of the Rich McGinn regime that almost sunk Lucent (and did sink McGinn). What role did she play in Lucent's downturn in late 2000? What decisions did she make that may have contributed to the company's current financial mess and jeopardized its future?

"You wonder how much she battled McGinn, how much she questioned him," says Bill Lesieur, director of Technology Business Research (TBR) in Hampton, New Hampshire.

Lesieur and TBR are mixed on the appointment of Russo.

"She's qualified, but the expectation was to bring in an outsider for a fresh start," he says. "But the turnaround is mature, established and in place - they just need to bring someone in to execute it. It's too late to bring in a turnaround CEO."

Should Lucent stay the course or set off on a new one?

Lucent should stay the course. It has to rebuild its foundation before expanding its house. Get the core business stable again, sustainable again, and then venture out from there.

Lucent needs to solidify its base. It needs to re-establish itself with its customers and vendors. It needs someone who knows those customers and vendors, someone who's been working with them for many years. Someone who knows what they need, what they will install and what they will buy.

Pat Russo was the right choice, the smart choice, the practical choice… the only choice.

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