I was recently reading an article about the long and sad history of Motorola. Back in its glory days, Motorola invented such things as car radios, military radios, and the cell phone and it was the company responsible for bringing Six Sigma to the U.S.A. On the other hand, by late 2003, it was a struggling, confused company with no clear game plan for winning. The CEO at that juncture was Chris Galvin, having been appointed to that position in 1997. He was the third Galvin to run Motorola and his grandfather, Paul Galvin, started the firm in 1928.
During Chris Galvin’s years as CEO, from 1997 to 2003, Motorola had made some disastrous mistakes. He over saw the launch of the Iridium satellite-phone system, which cost Motorola $2.6 billion before it was scrapped. He clung to the money-losing semiconductor division despite the board’s insistence that he sell it. Perhaps worse, he allowed the company to miss the transition in the late 1990’s from analog cell phones to digital ones, enabling Nokia to blow past Motorola in handset market share. A the time, as Upstart Magazine put it, “Motorola’s being bested by Nokia was the equivalent to the New York Yankees losing the World Series to a Finnish baseball squad.”
Given this long list of failures and no convincing game plan for turning things around, motivation among employees by late 2003 was at an all-time low. Finally, the board woke up and replaced Chris.
So what’s the learning from this sad story of an American icon gone bad?
1.) Beware of Foggy Goals – Employees really lose their spirit when it’s not at all clear how the organization is going to win in the future.
2.) Beware of Friends and Relatives – Chris Galvin was given six years to show what he could do with Motorola and that’s far too long of a runway. On the other hand, given that he was a Galvin, I suspect that the board was very reluctant to criticize Chris until Motorola was in a really disastrous position.
3.) Quickly Kill Things That Aren’t Working – Motorola was in too many businesses and they should have sold or shut down what hadn’t been working for years and focused on their real potential which was the cell phone business.
The sad thing is you see these problems of foggy goals, personnel favoritism, and lack of priorities all the time. Gutsy leaders need to keep in mind that these are human tendencies and they need to be fought at every step.