THE ACTION In 1989, Ferrari-driving executive powerhouse Paul Stern became head of Northern Telecom (now Nortel), Canada's high-tech jewel. The cosmopolitan PhD--he insisted on being addressed as Dr. Stern--was charged with making the company the world's leading telecommunications manufacturer by 2000.
EARNED HIS STRIPES As a cost-cutter. When he was COO at Burroughs Corp., Stern co-piloted the acquisition of Sperry Corp., which led in 1986 to the formation of Unisys. Stern's elimination of 9,600 jobs at Sperry's Tennessee factory cemented his reputation as a tough, decisive leader. Sure enough, at Nortel his cost-cutting drove up profit.
BUT THEN Driven by the bottom line, Stern cut deep into Northern Telecom's R&D, an essential ingredient in a tech company. Stern's imperial style--he held the top three executive titles--alienated staff and customers alike.
THE BIG UH-OH BellSouth Corp. of Atlanta, Northern Telecom's largest customer, suspended orders in April, 1992, citing repeated problems with service.
BYE-BYE With profits and the share price dropping, Stern stepped down: first as president (in September, 1992), then as CEO (in January, 1993) and finally as chairman (in June). In the second quarter of 1993, Northern Telecom posted its largest loss up to that time, $878 million (U.S.).
WHERE HE WENT After reportedly trying unsuccessfully for the top jobs at IBM and Westinghouse, Stern became a partner at New York private-investment firm Forstmann Little & Co. The stint lasted two years.
WHERE HE IS NOW Stern, now 61, is a director of Arlington Capital Partners, a Washington, D.C., investment bank that he co-founded with Raymond Smith, former CEO of Bell Atlantic. In his official bio, Stern still boasts of his record at Nortel. Stern said he was too busy with board meetings to be interviewed.