Who Shot Motorola?
Zander told me that when he started, the company was a wreck. “Customer-satisfaction levels were the lowest I’ve ever seen in my life,” he said. Product quality was poor; the company was in businesses that didn’t make sense for it—semiconductors and automotive electronics, for example; and employees felt a sense of entitlement and lacked killer business instincts.
“My first six months, I probably did two town halls a week,” he told me. He flew from Chicago to England, India, and China, talking to employees and customers. Given the amount of time he spent learning about Motorola, plus the length of time it takes for the consequences of any C.E.O. decision to flow to the bottom line, Zander could not possibly have affected Motorola’s 2004 financial results.
Here’s what Galvin shows on his PowerPoint slides: Zander took office on January 5, 2004, and two weeks later Motorola announced that its fourth-quarter earnings for 2003 were up slightly. Motorola’s financial numbers took wing during the course of the following year. For the first six months of 2004, revenue grew 41 percent compared with the same period in 2003, and the company saw a 454 percent increase in operating earnings. It generated $1.8 billion in cash, giving Motorola more cash than debt for the first time in its history. Schwartz’s study shows that Motorola experienced a powerful turnaround that Zander couldn’t have been responsible for.
Others who were there agree. “Chris had already been yanking on the levers of change,” says Sandy Ogg, a former Motorola executive under Galvin who’s now a top executive at Unilever. “One thing is for sure: The successes post-Chris didn’t have anything to do with Ed.”
Galvin hadn’t done anything magical, just a lot of managerial grunt work—with some help from a general industry rebound after the telecom crash. After the horrendous results in 2001 and 2002, he set in motion layoffs that slashed Motorola’s costs. He replaced and reshuffled 70 of the top 100 executives and put in a new rewards system to help light a fire under managers. A newly installed cell-phone chief—Mike Zafirovski, hired from General Electric—guided the creation of Motorola’s digital-phone “triplets”: the V300, V500, and V600 clamshell models. While not off-the-charts hits, the phones put Motorola back in the game.
Yet in his first months, Zander told Motorola it still had to change radically. “The board basically told Ed the place had to be gutted and redone,” says former H.R. head Gienko.
Having been brought up in a Silicon Valley business, Zander cringed at Motorola’s entrenched big-company ways. Pairing Zander and Motorola was a cultural mismatch on par with putting an American hip-hop artist in charge of Britain’s Royal Philharmonic Orchestra. Zander wrote weekly emails to employees about how the culture had to change. Top executives, including Zafirovski and Gienko, bailed.
“One of the things I underestimated,” Zander told me, “is that this is a company that has 70, 80 years of culture. After three or four months, I realized I wasn’t going to come in here and say, ‘Change the culture.’ So I pulled back a little bit.” But by then, many at Motorola felt confused and demoralized, even as the company’s financial picture brightened.
“There was initial hope,” says a former executive in Motorola’s handset division. “Maybe the company would grow faster. But it quickly turned out to be different.”
In early 2003, with Galvin still C.E.O., a team of engineers and designers started with a mockup of a superslim phone and worked backward to invent the technology that would make it possible. The team called it the Razor.
Galvin did not create the Razor, but he put in place the people who did. Among others, he’d hired Geoffrey Frost from Nike in 1999 to oversee Motorola’s marketing. Frost would become instrumental in branding the phone Razr and using that brand to recast Motorola as a cool company.
Still, Galvin did not foresee the magnitude of the Razr’s potential. Zander, on the other hand, latched onto it. “He saw that the Razr could be a big success and got behind it in a big way,” Ogg says. Zander showed the phone to major carriers—AT&T, Cingular, Sprint, Verizon Wireless—but they didn’t like it and thought it was too expensive. The first Razrs were going to cost consumers more than $400, and unlike the iPhone, the Razr didn’t actually do anything new. It was just a slimmer cell phone. Yet Zander and Frost believed Motorola could make the phones seem so cool that consumers would want them anyway.

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