It was not the “Change has come to America” speech the telecom community was waiting, for but Alcatel-Lucent and new CEO Ben Verwaayen on Thursday gave the troubled firm’s first clear signal of a new strategic direction.

The Paris-based company overhauled its old leadership matrix and introduced a completely new business model along with a new team of senior  group leaders made up of a number of outsiders.

A lot is expected of Mr. Verwaayen, the former CEO of BT ,who rode in on a wave of change and hope. The company was in a tailspin long before the downturn, and now faces the daunting task of regaining lost ground in the throes of a recession. (Alcatel-Lucent CEO Faces High Expectations)

The company, which owns Bell Labs, once North America’s premier innovation engine, announced that it has made a number of major changes to focus the organization more tightly on the customer and innovation.

Alcatel-Lucent, which was formed from the 2006 trans-Atlantic merger of two telecom products rivals, will now have three geographical groups instead of two. The new groups will be made up of the Americas; Europe, Middle East, and Africa; and Asia Pacific.

Robert Vrij, a recent hire, will head up the Americas, while Adolfo Hernandez, who will join the company on December 1, will lead the EMEA group. Etienne Fouques will lead the APAC group.

“The new model will give us a much stronger focus on customers and clearer accountability to the regional groups,” said company spokeswoman Mary Ward.

Despite six consecutive losing quarters, Alcatel-Lucent is still one of the largest telecom companies in the world. But it is the firm’s size that is creating some of its problems, said Moe Tanabian, a principal at IBB Consulting.

Rival Ericsson can focus on Europe, and Huawei can focus to a large extent on China and other fast-growing markets, he said. Alcatel-Lucent has a large legacy fixed-line business in slower-moving parts of the world and that has slowed the company down.

Alcatel-Lucent has lost market share in a number of areas of innovation where it was once comfortably ahead of the field.

“Alcatel-Lucent's diverse product portfolio made it difficult for the company to focus on the more profitable parts of its market,” Mr. Tanabian said.

With this in mind, the company created three new functional groups. Kenneth Frank was named president of Solutions and Marketing. Janet Davidson will assume the same post at Quality and Customer Care, while Michel Rahier was named the president of Operations.

The company also created four new product and services groups: Carrier Product Group, Services Group, Applications Software Group, and Enterprise Product Group.