Lots of companies in our business are hoping for a miracle — but there are no miracles on the horizon. We spent vast sums of money on building a nationwide network and ended up $1.4 billion in debt. There was no way we were going to pay off that debt. So we bit the bullet early and made a deal with our bondholders in the form of a prenegotiated bankruptcy.

Nobody wants to be associated with that awful word. But there’s no way around it: You’ve got to tackle the big problems first. We paid the piper and got the bankruptcy done — and thank God we did, because this year’s environment is even worse than last year’s.

Meanwhile, even before I arrived at Covad, I asked each of the senior executives to send me a list of the top 10 issues facing the organization. It turns out that there was no consensus on the 10 biggest problems. So I consolidated the lists, came up with 10 strategic imperatives, and started working through them. And we worked fast. We fired the CFO during my first week and started from scratch with the finance department.

We also had to persuade people at all levels of the organization to stop worrying about the stock price and start worrying about the basics of the business. If we got the basics right, the stock might come back. So we created a performance scorecard that focused on the fundamentals: speed of installation of new lines, how quickly we answer the phone in our call centers, and the rate of churn among customers. My message is simple: As tough as the problems in this industry are, if we work on the right things, we’ll end up with the right results.

CHARLES HOFFMAN(CHARLESH@COVAD.COM) JOINED COVAD, THE NATION'S LARGET INDEPENDENT DSL SUPPLIER, IN 2002. HIS CAREER IN TELECOMMUNICATIONS SPANS MORE THAN 25 YEARS.