EDWARD KENNEDY, TELLABS

Edward Kennedy is an entrepreneur in the establishment, applying his start-up background to one of the most traditionally stable companies in telecom. In the fourth quarter of 2000, Tellabs posted its first ever $1 billion revenue quarter — a big event in the history of any company. A year later, the company's position had changed dramatically; revenues fell to $470 million by the fourth quarter of 2001. Tellabs exited unpromising businesses and laid off a significant number of employees.

During much of that period, however, Tellabs was making a move that would, in effect, bring transformation by way of executive enhancement. That move was the company's acquisition of Ocular Networks, which was led by Kennedy, who is now president of North American operations and executive vice president. The deal closed in January 2002. Fast forward 18 months, and Kennedy is president and head of North American operations at Tellabs.

“One of the things I bring to Tellabs is an entrepreneurial feel that says the whole game is about winning,” said Kennedy. “It is about getting things done, and process is secondary to results.”

Given that he moved from a start-up to a stable company halfway through the telecom industry downturn, Kennedy possesses a unique perspective on how to manage a company in a bad economy. Obviously, the more nimble nature of start-ups lends itself well to managing a company in transition.

“You have to address problems quickly because they grow if you don't,” he said. “In good days, if you have a problem, sometimes it works itself out because the business is rising. In a downturn, all the problems get exacerbated quickly.”

But how this management is handled is very different in other ways, Kennedy said. At a smaller company, the leadership is down in the trenches more often, handling every problem personally. In a company the size of Tellabs, there just aren't enough hours in the day for an executive to run a company in that manner. So the challenge then becomes establishing the right structure and finding the right subordinate to handle the details — and then managing those people and that structure.

“You have to be careful and get good people in there, because you're managing the people that are managing the issues instead of trying to manage everything yourself,” Kennedy said.

Despite the size differences between start-ups and established telecom equipment vendors, the issues they have to deal with are the same, including high debt loads and emergency cost-cutting. That's one area, though, where Tellabs has a distinct advantage — and one that Kennedy clearly enjoys having. The company's balance sheet is one of the best in the industry: $1 billion in cash and zero debt, a situation, Kennedy said, that allows the company to think and act strategically when others have been forced to make quick decisions and deal with the consequences later.

“The fact that we do have such a strong balance sheet allows us to be able to work more closely with our customers and invest in some of the platforms that they're going to be using.”