Michael Birck: Digital cross connect


Bell Labs and Wecom veteran Michael Birck made his mark as an engineer early on, but it was his moves in the business world that place him in our innovators' circle. Tellabs, the company he co-founded at a kitchen table in the Chicago suburb of Downers Grove, is known as an innovative provider that led the way for other telecom start-ups right at the start of the late-1990s boom.

Michael Birck, Tellabs

Birck (Image source: Tellabs)

Tellabs started out as a niche provider of technology that local telcos couldn't easily get from Western Electric, the manufacturing division of AT&T's Bell System, a Crain's Chicago Business article explained. But it was new technology that really set Birck's company on a huge growth arc.

"Mr. Birck poured $40 million, a huge sum for Tellabs at the time, into a three-year project to develop a new product for managing call traffic on telephone networks," Joe Cahill wrote in the article. "The 'digital cross-connect' drove 16-fold revenue growth in the 1990s. Sales peaked at $3.4 billion, and Tellabs' stock market value topped $25 billion."

Tellabs took a huge hit in the dot-com bust of the early 2000s, and struggled to survive in ensuing years. Its recent history has been marked by lowered revenue and layoffs, including its third-quarter earnings results, when it announced that 200 employees would be getting pink slips. However, it has continued to hold the line on costs, recording a net loss of just 1 cent per share in Q3 2012, compared to a loss of 36 cents per share in Q3 2011.

Despite the company's issues, Birck has not shied away from helping other technology start-ups or boosting research into fields like nanotechnology. In 2001 he donated $30 million to his alma mater, Purdue University, to support the building of a nanotech research center. Last year, he and his wife gave $1 million to the Hinsdale Hospital Foundation to help fund a new patient pavilion.

Birck will retire from Tellabs' board next spring. But it's likely he will continue his legacy of altruism and investment in promising technologies.