Thursday’s New York Times features this jaw-dropping account of Worldcom’s rise and fall by Kurt Eichenwald. Worldcom grew by acquisition, gobbling up big Internet backbone providers like UUNet and big long-distance providers like MCI into one humongous telecommunications combine that wowed investors for years. In a company that grows by acquisitions, what’s the most important skill? Operations — the ability to take different organizational entities, business structures and technological systems and merge them into a cohesive, and profitable, whole.
Guess what area it seems Worldcom was utterly clueless about? That’s right — operations. From Eichenwald’s piece:
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Leading it all was Mr. Ebbers, a man who insiders and analysts said was out of his league in the rough and tumble world of telecommunications.
“WorldCom wasn’t operated at all, it was just on auto pilot, using bubble gum and Band-Aids as solutions to its problems,” said Susan Kalla, an analyst at Friedman, Billings & Ramsey. “Bernie was endearing, but he didn’t even have a working knowledge of the business.” |
“Endearing” but “out of his league,” lacking even a “working knowledge” of his own business — this is the guy who was hailed as harboring the visionary future of telecom in the flecks of his beard. What I want to know is, where were analysts like Kalla when investors could have made use of such trenchant analysis?
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