Northern Telecom Limited (NTC) is more than a 100 year old company which is founded in Montreal, Quebec in the year 1895, which is later known as ‘Nortel Networks Corporation’. Currently the company is in Bankruptcy state which earlier was a pioneer in telecommunications, networking equipment manufacturer. During 1980’s it has become a key supplier of telecom equipments to the Bell Canada and ever since it has emerged into a leading operator in telecommunications and networking competing with Ericsson, Cisco Alcatel, Lucent etc. It is also one of Canada’s biggest companies by market capitalisation during that time and has been at the forefront of innovation in the ever evolving history of communications. The case study in the current context is developing a new product line EBasic 800 later named as ‘Harmony Project’ which has an official completion deadline by Nov 1983 for Jan 1984 release into the market. The Project is initially headed by Doug Clark appointed by Alan Lutz, general manager of the plant. Later a new manager Jim Retallack got appointed to head the entire product development phase who has come from a R&D background from BNR (Bell-Northern Research). In this case the analysis will be much focussed on what strategy is chosen from the beginning, staffing, issues concerning the product development and also on the organizational structure of the project.

1. NTC Harmony Case Analysis
SIM 2
Analysis of NTC Harmony
By
- Aditya Ishan

2. NTC Harmony Case Analysis
1. Introduction
Northern Telecom Limited (NTC) is more than a 100 year old company which is founded in
Montreal, Quebec in the year 1895, which is later known as ‘Nortel Networks Corporation’. Currently
the company is in Bankruptcy state which earlier was a pioneer in telecommunications, networking
equipment manufacturer. During 1980’s it has become a key supplier of telecom equipments to the
Bell Canada and ever since it has emerged into a leading operator in telecommunications and
networking competing with Ericsson, Cisco Alcatel, Lucent etc. It is also one of Canada’s biggest
companies by market capitalisation during that time and has been at the forefront of innovation in the
ever evolving history of communications.
The case study in the current context is developing a new product line EBasic 800 later named as
‘Harmony Project’ which has an official completion deadline by Nov 1983 for Jan 1984 release into
the market. The Project is initially headed by Doug Clark appointed by Alan Lutz, general manager of
the plant. Later a new manager Jim Retallack got appointed to head the entire product development
phase who has come from a R&D background from BNR (Bell-Northern Research). In this case the
analysis will be much focussed on what strategy is chosen from the beginning, staffing, issues
concerning the product development and also on the organizational structure of the project.
2. Galbraith’s Star Model
Analysis: In the Galbraith’s model, the overall structure, strategy of the NTC harmony project is
defined and also how it connects with the people, processes and rewards is discussed as follows:
Structure: In case of NTC Harmony for the development of a new model telephone, General
Manager Alan Lutz initially appointed Doug Clark as the acting project manager by whom the whole
process of product innovation got initiated. Later Alan appointed an outsider Jim Retallack a PHD in
Electrical Engineering from the Bell Northern Research (BNR) for the full time Project manager. The

3. complete power is given to Jim in taking key decisions and also for driving the organisation
throughout the product development of the project. The organisational structure is hierarchical where
general manager Alan and project manager Jim acts as top heads and directors, managers report to
them. Directors, Engineers, and individual division managers were not given much scope for planning
and the power of decision making always rested at the top-level which is the reason why there is a lot
of noise inside the organisation throughout the development of the project.
Strategy: The firms’ strategy is very clear to revolutionize the telephone industry and establish
themselves in Terminal business by developing a niche product for the market apart from their core
switching business. To get established as niche players in the market they had collaborations with Bell
forming a Bell Northern research. The product development team was headed by Alan Lutz, General
Manager of the plant, where he completely surrendered the control to Jim for any key decision
making. NTC has moved very strategically in its product development approach by forming 10 cost
functional individual teams where each team is responsible for each telephone part. The collaboration
has been established between the teams to work together where the teams are dependent on each
other.
Processes: To see how each team is working a detailed plan is introduced by Jim where the status of
individual teams is closely monitored with each next step of the project clearly defined, milestone
charts, team meetings, memos, sign-off procedures and tracking procedures. The project is well
structured and the decision making always at the top in which some of the employees, engineers
suggestions were not taken into consideration very seriously right from the start. This issue prolonged
during the course of the project and the deadlines are getting nearer, and many of the issues are not
resolved and many negative opinions rose internally which has become a huge issue for the project
manager. These issues would have been solved initially itself. Even the decision of electrets
transmitter, difference of opinion among design and manufacturing teams should have been taken
initially itself. Individual teams are set-up but more efforts have to be made to make team efforts more
integrated and more productive.
Reward Systems: The project itself is a huge goal for the organisation. But the organisation couldn’t
properly align with the employees in setting right directions in the process of product development to
achieve these goals. The employees have not been given due diligence in decision making process
which led to issues between teams over various problems encountered. Doug was somewhat
successful in making the teams aligned to the organisation objectives and goals.
People: Right from the start of the project there was difference of opinion among the people j the
organisation. Many important questions have been raised initially itself. They opined that the
organisation is going against what they are good at ie., switching business. The initial
Personal selection was done by Doug Clark and also established a team of core members. Later when
Jim was appointed as the Project manager teams started working closely but due to the decisions of
automation and low cost product design the employees’ morale was down and in the middle of a lot of
hue and cry in the organisation many key decisions have been taken without valuing employee views.
Their concern being the effect of automation on 1300 member work force which would reduce the
number of jobs available in the plant. Official approval has made them silent but internally the issues
existed in the team in the entire process.

4. 3. Egg of Innovation:
Analysis:
NTC organization (management) was in crucial situation to meet the deadline in order to deliver the
product on time. NTC already has a creative product which is EBasic 500 series. From this they have
started with an idea of developing more innovative and most affordable product with a dial pad and
transmitter and receiver (electret transmitter). They set up a team to develop innovative telephone for
residential as well as for commercial purpose. Doug Clark is considered as Project Champion for the
NTC Harmony project as he is very much involved as the key market researcher and also formulated a
product strategy as the temporary project manager. He was the man behind the setting up the core
team of 4 members initially to develop the new product in a cost effective way. Evaluation was done
by Jim Retallack, who was later appointed as the Project manager, by having regular team meetings,
follow-up procedures, memos, status reporting, milestone charts etc which proved effective for the
project. The project management was much concerned about the cost of the product with good quality
as they needed to deliver the product at the lowest cost. Project is handled by 10 different teams each
owning responsibility for individual part. The overall project is functioning satisfactorily while
issuing between teams existed because of lack of proper integration between the teams. Coordination
between the functional teams is the need of the hour to complete the project in time.

5. 4. Six success factors:
The six success factors were discussed for NTC (Harmony) are presented as follows.
a. Business Focus - Technologically innovate the idea of communication between two people
sitting in different parts of the world. Make the telephone accessible to the entire world with
low cost and unique design. Design of telephone, which can really affect the field of
telecommunication products around the globe. Main aim is to connect the world. Progress has
to be made from telephones to wired connections to handsets, to digital telephones and thus
revolution and evolution of Internet.
b. Adaptability – They are the perfect example of adaptability. They adapted to the frequent
demand and change of technology around and available. The evolution of first prototype
telephones to main basic residential sets to business class phones (Unity I and Unity II) to
digital and then to internet evolution; this revolution has come up due to the frequent
adaptability of the organization from time to time based on technology available and demand
seen in the world market.
c. Organizational Cohesion - From the beginning and introductory phase there was tough
pressure on the company and the mandate was “Do or Die”. It was important for them to
develop new product or close the company and shut down manufacturing plant in London and
thus unemployed several that is around 1300 employees would lose their job. The deadlines
and meeting the production was very important for the company and they succeeded in that
completely by making several organized teams based on the product level with qualified,
devoted and loyal employees. Later stage the business grew and then we could see that the
line of business grew too from basic telephone to digital and to Internet.
d. Entrepreneurial Culture – We can see a good example of entrepreneurial culture in NTC as
an organization. We have seen them meeting the deadlines, taking risks managing teams to
deliver, selecting correct people and holding them together always helped the organization to
boost up the business. These proper and motivated cultures had always led NTC as an
organization to stand up above competitors during their market introduction phase. The top
most of the company were always in contact with the team directly to see and monitor the
production and development and thus controlling the production in automation and marketing
of the product with the financial aspects.
e. Sense of Integrity – Due to the very selective hiring and proper organization of the teams and
product development plan all the teams and all the people in the teams were well linked and
aware of the things which another team were involved with. This helped the organization to
synchronize the product development and put the product into direct automation so that the
product can be developed in less time and in under budget. Teams were also divided based on
the parts of the products. Each team was responsible for one key component:
- Developing a reliable design that could be manufactured within the cost objectives
- Maintaining a close liaison with the other cross functional teams
- Maintaining close liaison with marketing, quality control, production control and
purchasing.
- Producing a design that would lend itself to automation which will further save time and
will help in the amount of production on time and on demand.
f. Hands on Top Management - The top management had already selected the employees and
developed and distributed the teams for the best efficiency. Even the CEO and the managing
Directors and the GM of the company were appreciated and they did a lot of appreciations
and motivations to all the teams as they totally believed them and thus always succeed and
thus company grew enormously and successfully.

6. 5. Fish Bone for NTC Harmony
Analysis:
As there are numerous problems inside the project team of NTC harmony, a fish-bone diagram would
help find out what reasons are causing the problems and the respective effects. In terms of manpower
major concern is Jim Retallack an outsider, appointment as the project leader mid way and also an
absence of 6 months has a negative impact among the employees and other key associates. Other
problem being the use of electret from the Japanese suppliers which will affect experienced
employees.
In terms of methods, some of the methods like implementing memos, team meetings, work and
employee trackers were effective but still the decision making capability mainly rested at the top
which is one of the biggest problems for NTC.
Functional team were not integrated and there is no overlap between the teams which created
problems during the design and engineering teams. Other problem being, decision whether to build or
buy the electret transmitter since it production cost is about $1, while Japan producing in $.25 where
quality is uncertain.
In terms of material used to fit the transmitter in plastic mould not a satisfying solution is concluded.
The confusion between Jack team and circuit board and transmitter teams over the jack size, hole size
for transmitter and circuit board being different is also unresolved. There are still lots of issues
between teams and this will overall affect the product delivery in budget and on time.

7. 6. Cross functional integration:
Some of the product phases are left blank as the project is still ongoing. Once the case is
analysed completely the rest of the phases will be filled in.
7. Heavy weight / Light weight team structure:
Four types of project teams are as follows:
1. Functional Team Structure: in the basic traditional functional organization employees are
grouped principally by discipline, each working under the direction of a specialized sub
function manager and a senior manager.
2. Lightweight Team Structure: Like the above functional Team structure, those assigned to
the lightweight team reside physically in their functional areas, but each functional
organization designates a liaison to represent it on a project coordinating committee or to a
project manager.
3. Heavyweight Team Structure: These are different from the lightweight team structure as
here the project manager has direct access to and responsibility for the work of all those
involved in project. It is hard to implement but found much successful.
4. Autonomous Team Structure: In the autonomous team structure which is often called as
“tiger team”, employees from the different functional areas are formally assigned, dedicated
and co-located to the project team and the project manager is given full control.

8. Analysis:
NTC was found to be Lightweight Team Structure as we have seen that the functional managers were
directly linked to the department heads such as engineering, manufacturing and marketing. Further
there was the project manager on the working area who controlled the team but did not have full right.
Here project managers were considered as middle or junior level person who, despite considerable
expertise, usually has little status or influence in the organization. NTC lacked in communication and
coordination for example during the production of the unit using automation.
This communication gap is there right from the start of the project with a lot of uncertainties on who
is heading the team and even employees did not get the feeling of having heavyweight project leader
at the top. Even though the entire authority to take any decision is given over to Jim, he did not
communicate it to the organization effectively. As the project is still on-going the best possible thing
is to communicate all functional teams of the project mission and vision in an effective way to align
them to the organization's interests.
Conclusion from the case study:
In the previous sections, emphasis is made to see how the organisation is structured and how it
behaved during the lifecycle of the product development. After analysing the case very carefully
looking at the current circumstances where the project deadline is getting very closer, a more effective
integrated team approach is needed. Currently the functional teams are not having an overlap with the
other teams to understand and identify the issues which might come up in the future. This approach
not only helps the individuals in identifying the issues but also makes them ready to face challenges in
the later stages. The organisation and even the general and project manager are very much focussed in
delivering a less priced product without compromising on quality. But the problem is where they have
to concentrate on , where employee concerns have to be addressed and have to be involved in the key
decision making process as it is seen lacking in the current operation. The jobs of the 1300 workforce
very much depend on how the approach is going to be in the final stages of the product development.
Mainly the decision of using their own engineers for designing the electrets would be more fruitful
even if the cost of the product increases slightly. The decision of using the Japanese suppliers would
be very damaging to the organization in terms of doubting their own employees’ capabilities. As the
meeting is going to start very soon the key decisions pending should be taken in favour of the
employees to finish the product development in time as the deadline is getting closer which also wins
the hearts of the employees.
The reason for numerous issues and many negative opinions inside the organization is due to the
appointment of an outsider as the project manager Jim Retallack in the project team. He is seen much
as a technical expert and an outsider in the organization by the employees. This continued on during
the critical phases of the project which in turn made Jim pressurizing employees with meetings and
status reports. A leave period of 6 weeks has also carried out a negative impression as the leave was
during the critical phases. But Jim’s contribution is also one of the things to be talked about as some
of the teams functioned well under him. As the project deadline is getting closer it is wise on part of
Alan to re-appoint Doug who is regarded as a concept custodian and a project champion as the Project
leader. Doug Clark is the driving force behind the market research and who had also formulated a
strategy for the new product would be a suitable replacement for Jim to save the organisation from the
crisis. Jim would be better in filling up the gap of a technical expertise as well as an advisor to Doug
would help finish the project very efficiently and mostly in the stipulated time.

9. Sources:
http://www.nortel-canada.com/about/history/
http://www.ft.com/cms/s/0/b1c473e6-089a-11e0-b981-00144feabdc0.html#axzz3Jo0jnzLU
http://en.wikipedia.org/wiki/Bell-Northern_Research
http://en.wikipedia.org/wiki/Nortel
http://open4m.org/2009/03/22/designing-your-organization/