Monday, November 11, 2002

If you are one of the many who bought telecommunications shares and lost out big time, you should be looking to mount a suit to regain some of your losses, or at least scare the crap out of the company that made you broke. During the days of the collapse I was working for a global Telecommunications vendors whose shares has crashed below the US$1 value, but more to rampant stupidity than market forces. In my last days I witnessed my manager turn down $150M contracts and screw the customer all in the name of self-glorification. But why you may ask?

Basically Company X was so top heavy in management that there were not enough Indians to do the work required. And of the people that were available, most were very poorly qualified. As for the management team itself, it was definitely jobs for the boys and girls with incestuous relationships of who is screwing who. Sex, power and money kept the show rolling along.

As an example, the directive of Company X finance team placed 40% on top of every sale, this meant multiplying ever $1 by 1.65 go get "the margin". Even when the margin was already built in, the new margin had to be placed on top. Despite warnings that our competitors were charging less, Company X managers still went ahead. In one case, the Chief Engineer wanted to charge the customer $4.32M for one person for 10 days of work. Guess what?, we never got the contract. I argued that the customer would see right through the illusion that we didn't know what we were doing, but as I was not a member of the boys club, my voice made no difference.

As for the sales team, in my area there were 65 team members and in 12 months brought in a whopping $18M. In fact there were two layers of sales teams that often fought over who should get the revenue recognition. This led to infighting, poor co-ordination, customer confusion, low morale etc... And this was all to support the privileged club. Even the Region President who had won a $1.2 Billion contract to get his position should have been sacked long ago. When the contract was won, it was touted to be a rock solid winner that would see company x well into the future and this was used to lift the share price. What the shareholders didn't know was that the figure was spread over 5 years, making the income less, $240m. Next that the outlay to get the contract was $230M p.a. making an income of $10m p.a. Clearly fraudulent representation.

And this was common practice of booking future revenue to boost the share price. And in most cases the revenue never appeared or the real value was far less than what was reported. This inturn would boost their bonuses and pay packets.

What I do not understand is the level of blatant incompetency that I saw, senior managers who did not know what a business plan was, who did not understand the market, and who did not understand how to do business. We were approached by one customer to do $20,000 worth of work and if we succeeded and did our job properly, then we were definitely in the running for a further $75m worth. But again my boss said no even though most of us were sitting around on our butts worried about tomorrow and that to get a $75M contract to build an optical network was in the offering. By the way, the $20,000 job was the write the specifications for the tender for the Optical network. What a give away.

On another occasion I was part of a team to assess a customers business plan, the customer had an idea to deliver a service that would have cost $5B to build recovering their investment in 3 years. During the discussions I asked the customer if they had a budget, finance approval, management approval, CEO/Board approval. In fact they had nothing and expected Company X to pay for it. In the debriefing after the meeting I told the Account Sales manager that as the customer had no finance, that we shouldn't spend a lot of time on the project and that he should pass this small but very important fact to his manager.

Again I was ignored, Company X devoted 20 people for 12 mths costing $5m in all on a fantasy. My messaged was never passed on to the section “cabinet" for discussion (Section cabinet consisted of all the VPs and President for that section). False forecasts were fed back to head office in the Americas which found its way back to boosting the share price and annual report say that Company X's future looked good with $5B in the pipeline.

You may say I am bitter and twisted over the events and as I haven’t been working for a while I have had time to ponder the meaning of life. But in the end, I saw many fine people get sacked and the idiots stay in their comfortable positions. I saw customers given poor service and products, a lot of it vapour ware and their business plans screwed up so that they could not deliver. And I have had the opportunity to spend considerable quality time with my children.

But it wasn’t my money and I was getting paid to do my job nothing more. And in many cases I was told to keep out, as I did not know what I was doing despite the fact that I have 10-year business management experience was, as most of the others had none.

So for all of you out their who have ploughed your life savings into the telecommunications sectors, you were ripped off. Most of the managers lived in fantasyland and the rest of the board though the sun just shined out of the neither regions.

Until the companies stop employing “friends” and employing experienced people, nothing will change. Most Telecommunications companies need to sack their management and start again to break the cycle of nepotism. Reporting to their shareholders needs to be more detailed and transparent. Expert consultants need to be employed to examine the report to ensure that the billions spent, are being sensibly spent and that the “fantasy” business plans have some substance.