Too much success can kill a company. After a culture of arrogance takes hold, it’s all downhill.
There were three major factors that caused the failure. When Nortel was a market leader in the ’70s, it developed an arrogant culture, which led to poor financial discipline. Then in the ’90s, it focused so intensely on growth that it broke its ability to innovate and read the market. And after the tech bubble popped, it turned inward and cut costs to the point where it alienated customers.