Making Over Motorola
Making Over MotorolaMaking Over Motorola
Thursday December 9, 7:03 pm ET
By Elizabeth Corcoran
If mobile communication is going to be seamless, Motorola has to be seamless.
Edward Zander always wanted to be in charge. After 25 years in high technology, including five years as a prominent second banana at Sun Microsystems, Zander got his wish. In January he became chief executive at Motorola, a fallen angel of mobile communications. It used to own the business. It doesn't anymore.
Five weeks after Zander's arrival at the Schaumburg, Ill. head office, he figured out what being boss of a technology company is really all about: 10% technology, 90% diplomacy. He was sitting in the Reston, Va. offices of Nextel, Motorola's biggest customer. Timothy Donahue, Nextel's chief executive, bluntly told him that Motorola was still acting like a monopolist, long after Nokia, Ericsson and Samsung had taken most of the business. Donahue told Zander that Motorola's products were late and their quality was shoddy. Motorola's divisions were not cooperating with one another; Nextel's people had to work overtime to track down three or four Motorola executives in different divisions to get input on a new project.
Zander took copious notes. Minutes after he left Donahue's office, he turned to his chief information officer and made him personally responsible for the Nextel account. These days Motorola is back in Nextel's good graces. "Motorola people are working hard to solve issues for us," Donahue says, with grudging approval.
This kind of meeting took place again and again over Zander's first three months. "Each meeting was like, five or ten minutes of making nice, then they beat the crap out of me," Zander says.
When Zander got to Motorola, he brought plenty of spunky optimism and a sure grasp of technology. But he quickly realized Motorola desperately needed something more from him: to learn to cooperate. His many years of watching the egos of founders-turned-chief-executives run amok had burned into him a deep belief in the power of teamwork. The day of the chief executive as Lone Ranger is over at Motorola.
From the moment Zander took the job, analysts have been clamoring for Big Moves: a layoff, a sweeping reorganization. The advice irks him. "I've got to live in the house first," he has insisted.
He has overseen one divestiture planned before he arrived. In July, Motorola sold 40% of its semiconductor group in the public market and was scheduled to distribute the rest of its shares Dec. 2, making Freescale Semiconductor freestanding. That leaves Motorola with 65,000 employees in five divisions--phone handsets, base stations, walkie-talkies, automotive electronics and broadband. There are hints that Zander will reshuffle divisions with an eye toward improving the company's internal mechanics, streamlining manufacturing, procurement and its own technology infrastructure. The idea is to present a single face to customers. Zander has laid off only 1,000 this year--so what if that leaves Wall Street analysts cold.
At least his timing has been lucky. Two weeks into the job Zander announced Motorola's first strong quarter since the telecom bust. If Motorola continues to sell pallets full of its sleek new Razr V3 camera phone, 2004 could be its most profitable year ever, with a $1.9 billion net, up threefold from a year ago, on $36 billion in revenue
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