It was January 5, 2004, Ed Zander's first day as CEO at Motorola.
When he joined, the company was plagued by quality issues, financial confusion, and slipping launch dates. It was also under zero degrees outside the company’s Schaumburg, Illinois HQ.
"I cried," Zander joked, answering a question about the first thing he did upon taking over the storied communications company. It took about six months before Zander felt comfortable with the situation at Motorola, he said Friday during a leadership seminar hosted by the Churchill Club.
Motorola’s cultural complacency
Motorola was plagued by a slow-moving culture that did not recognize the looming opportunity in converged mobile devices, Zander said. More than a year and a half later, Motorola's core phone business is drawing rave reviews for slick designs like the Razr and the Motorola Q, and the company's stock is up over 50 per cent since Zander took over as chairman and CEO.
Transforming Motorola in those early days was more about holding business unit leaders accountable for the performance of their division rather than implementing a winning strategy, Zander said. While preparing for the company's first earnings calls weeks after his first day, "I asked for the numbers and got 17 different sets of numbers. It was the only blowout I had while I was there."
It took a massive reorganization, which included thousands of layoffs and the spin-off of Freescale Semiconductor, to get Motorola to a point where it could focus on Zander's strategy of "seamless mobility," a world where someone can be connected to the Internet in the home, in the office, in their automobile, and just walking down the street, he said.
Royal rumble faces convergence players
In this world, Motorola will face competitors beyond fellow mobile phone vendors such as Nokia and Samsung Electronics, Zander said. He expects that companies such as Dell, HP, and even new partner Apple will release devices that blend communications and computing. HP has already started to move in this direction with its h6300 series iPaqs, and Apple and Motorola just released the long-awaited ROKR music player phone.
Some analysts and Apple fans believe that CEO Steve Jobs will eventually develop an Apple-designed smart phone, based on Apple's traditional insistence on keeping tight control over the hardware that runs its software products. Zander declined to comment specifically on the idea of an Apple smart phone, but said "all computer companies are thinking about voice."
’Screw the nano’ - Zander
He did have some harsh words for Apple's new iPod nano, which many analysts believe stole the spotlight from Motorola's ROKR phone during a recent launch event.
"Screw the nano. What the hell does the nano do? Who listens to 1,000 songs?" Zander said.
People are going to want devices that do more than just play music, something that can be seen in many other countries with more advanced mobile phone networks and savvy users, he said.
Motorola, and Zander, will have to keep their eyes on many different evolving technology trends in order to keep the momentum going over the next few years, he said. "This is the only industry where you can whack yourself out of a $12 billion company overnight," he said.