An Iron Fist in a Velvet Glove

Don't let Clarence J. Chandran's refined manner fool you. The president and chief operating officer of Nortel Networks Corp. (NT ) is as tough as they come. A few years ago in Singapore, while he was sleeping at a colleague's house, Chandran was awakened by three knife-wielding burglars. He was stabbed repeatedly in the chest and abdomen, but somehow he fought them off. The injured executive underwent a four-hour operation, three days of intensive care, and months of rehab before recovering.

Now, Chandran, 52, must rely on his survival instincts to help lead Nortel through what promises to be one of the toughest years in the history of the 105-year-old Canadian company. Nortel Chief Executive John A. Roth appointed Chandran his No. 2 last June, a move that many took to mean that the native of Bangalore, India, would soon be named to Nortel's top job. Insiders now say Chandran is likely to take the reins before the end of the year.

When Chandran moves into the top slot may very well depend on how quickly he and Roth can put Nortel back on track. The company's stock plunged 35%, to less than 20 in mid-February, after the company revealed it wouldn't meet its 30% revenue-growth target for the year. Many analysts doubt Nortel will even be able to meet the revised goal of 15%. While Roth serves as the company's visionary, it's Chandran's job to guide the daily operations of Nortel's four main businesses and deliver the growth his boss is promising. Chandran isn't worried. "I don't panic," he says.

Chandran has years of experience to fall back on. He started as a salesman for Bell Canada, then Nortel's parent, back in 1973. He diligently worked his way up over the past 28 years, living throughout the world in a range of management jobs. "He has great business acumen," says Roth. Chandran's responsibilities now include sales, marketing, research and development, human resources, and acquisitions.

ULTIMATUM. He's not known for his patience, however. Last year, he decided that Nortel should buy Alteon WebSystems Inc. so Nortel could sell its customers Alteon's Internet switches. When he sat down with Dominic P. Orr, Alteon's chief executive, last summer, Orr wanted to wait a couple of months to cut a deal in hopes that Alteon's value would rise. Chandran appeased Orr by giving him two weeks--and then gave him an ultimatum. Orr capitulated and sold Alteon for $7.2 billion. "He has an iron fist that's fitted in the perfect velvet glove," says Orr.

Chandran may be a little preoccupied with time. He has a collection of more than a dozen watches, and several have more than one face so that he can quickly see the time in different regions of the world.

He's a man who believes that every minute counts. On a recent trip to Eagle River in northern Canada, he spent the weekend fishing without making a single catch. Then, in the last 60 minutes, he caught four Atlantic salmon. "The thing you learn is to never give up," he says. That's the kind of grit Chandran will need to get Nortel through these rocky times.

By Roger O. Crockett in Brampton, Ont.

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