BUSINESS WATCH

Light on Northern’s development

Peter C. Newman October 1 1984
BUSINESS WATCH

Light on Northern’s development

Peter C. Newman October 1 1984

Light on Northern’s development

BUSINESS WATCH

Peter C. Newman

At a time when most of Canada’s chief executive officers are hunkering deep in their corporate hutches, paying off past debts and eyeing the future with a mixture of terror and public bravado, Walter Light, the evangelical head of Northern Telecom, is a startling exception.

“Sure, we have six corporate jets, probably the largest fleet in Canada,” he admits defiantly, “and if that bothers a lot of other people, it doesn’t bother me. We use them 82 per cent for moving customers and 18 per cent for moving top people in the organization. Salesmen have first call on every aircraft.”

Light, who only has two books on his office credenza (Inside Kung-Fu, so he can learn about Japanese thought patterns, and The Collected Works of Goya, to remind himself of his “Get Off Your Ass” [GOYA] corporate approach), has transformed Northern Telecom into North America’s second-largest designer and manufacturer of telecommunications equipment. His company’s 1983 net profit of more than $1 million per working day was up 92 per cent from the year before, and his huge work force grew by 14 per cent. This year he expects to top the $4-billion sales mark and is planning to make risky lunges at the U.S. market, where he runs 14 manufacturing plants and 15 research facilities, employing 17,000 people.

Northern Telecom now sells to more than 90 countries worldwide. A subsidiary of Bell Canada Enterprises Inc., Northern has been reducing its dependency on both its parent company and its domestic market: Canada now accounts for less than one-third of total sales.

A true multinational, Light has hired full-time lobbyists for his company in both Washington and London. “I spent a day and a half with Allan Gotlieb before he went to Washington as Canadian ambassador,” he says, “telling him how we saw the problems in CanadianAmerican relations.”

Light earns about $1 million a year. A Bell Canada engineer who moved over to Northern a decade ago when it was still largely in the business of making standard black telephones for its owners, in 1982 he transferred the daily operations of his empire to Edmund Fitzgerald but retained final authority. In his twangy voice he harangues his salesmen to meet ever-escalating targets. The key concept in his staff sermons is “commitment,”

which he manages to work into just about every context, like a TV preacher’s use of the word “Jayzus.”

“For any company to succeed, what’s important is to have commitment,” he preaches, “and it’s not only the commitment of the individual who’s leading the organization but commitment of the senior people. And if you can create that kind of culture within an organization, then you can succeed. My style of management is like a cross within a cloud,

with each of its arms representing my four main commitments—to my shareholders, my customers, my employees, the public and government—and I spend 25 per cent of my time on each of the four. Productivity? We measure productivity by our cost reductions, that’s how we measure it.”

Light claims he increases his personal productivity by taking preferred customers to lunch at one of the five private clubs to which he belongs. “I do a lot of my selling in the private dining rooms of these clubs,” he says. “They know me

very well at all of them, though the Forest and Stream in Dorval is my favorite.”

Light lives in Toronto’s fashionable Rosedale preserve, owns one of the country’s largest collection of kerosene lamps and spends summer holidays near Hanover, N.H. Most of the time he just works. He puts in a 70-hour week expanding the Northern empire toward his objective of $8-billion revenue by 1988.

The company’s hottest product at the moment is its new line of 8000-Series telephones, which take only 10 minutes to manufacture, compared with 30 minutes for current models. Northern has also moved heavily into office automation, and Light estimates that by the end of next year 17 per cent of North American corporate presidents, 38 per cent of vice-presidents and 70 per cent of managers and supervisors will be using computer-based work stations. To keep ahead of its markets, Northern employs 5,500 scientists at its various laboratories and this year plans to spend about $425 million for research and development. Its labs have been almost the equivalent of graduate school for the high-tech entrepreneurs currently trying to make it on their own in Canada and the United States.

Light looks to the United States for his most impressive future sales gains, which is one reason he hired Fitzgerald, a professional corporate manager with deep roots among the Fortune 500, as his successor. “We see ourselves as a truly North American corporation,” he says. “We supply virtually all of the largest telecommunications companies in the United States and have become the largest supplier of digital switching equipment to the American long-distance telephone market.” Deregulation and the recent breakup of AT&T have helped Northern expand its marketing south of the border by weakening Western Electric, the AT&T subsidiary that is the Canadian company’s main rival. In the past decade Northern’s U.S. sales have accelerated from $30 million to more than $2.5 billion.

“We keep our commitments,” Light says, repeating his favorite refrain. “We concentrate on deliverability—the commitment to do what we say we’ll do. For long-term achievement, a company must consistently deliver on its promises.”

What this country needs is not a five-cent cigar but a dozen Northern Telecoms.