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Adaptive leadership is the key to business success today
When leaders fail to respond in appropriate ways to threats and opportunities in the external environment, the performance of the company will suffer. When Lucent was spun off from AT&T in 1996, the new company faced significant changes in the external environment.
After the Telecommunications Act of 1996, telephone companies moved quickly to modernize their networks while they still had access to monopoly revenues. Because Lucent had provided their existing telecom equipment (when still part of AT&T), and much of it would work only with upgrades from the original manufacturer, these companies turned to Lucent as the source for new equipment.
However, despite this initial advantage, Lucent ran into serious problems. The company failed to adapt to significant changes in the industry, including the shift from electrical to optical switching, the shift from voice to data networks, and the shift from specialty to commodity markets. Top management was aware of these changes, but the company was not able to respond as quickly as new competitors.
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