Alcatel-Lucent (ALU) CEO Pat Russo survived a string of quarterly losses and catastrophes at her company that would have put a lesser person down. She remained bloodied by unbowed as ALU reported tremendously poor results and made repeated missteps. The firm reported a loss of 1.1 billion euros ($1.73 billion) for the second quarter, or $.77 U.S. a share, wider than the 586 million euros reported last year.

Russo could no longer cheat the hangman.

The merger of Alcatel and Lucent was probably a failure before the marriage papers were signed. Each company has a strong foothold in the network equipment industry. The combination was based on the usually excuses for such link-ups. Putting two related companies together expands the product line, increases sales fire-power, and allows for putting the torch to hundreds of millions of dollars in "redundant" costs. The trouble is often misidentifying what is and is not redundant.

Russo and her top people took the company through a series of wrenching lay-offs. With each cut, the company bled out on the floor a bit more. During the process, ALU lost two-third of its market value.

Synergy is a misleading word for the notion that 1+1=3.

The actual math is almost always much less compelling than that. Russo was able to preserve the illusion over enough time to keep her job much longer than she deserved.

Douglas A. McIntyre

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