Ed Zander is stepping down as CEO at Motorola, having overseen a boom time and a gradual decline. While there are probably many inter-twined reasons for Motorola's lack of performance after it hit the big time with the Razr, many will point to the lack of innovation following on the back of that spectacularly successful phone.
To his credit he was able to spot the potential of the Razr while it was still in development, and encouraged getting it to market rapidly. He recognized that it was just what Motorola needed to re-energize its image outside the company (which had lacked a hit consumer product since the Star Tac some ten years earlier), as well as to revitalize innovation inside Motorola itself. Time has shown that it was more successful at the former than changing the latter.
A fascinating article about Geoffrey Frost, then Chief Marketing Officer, and the development of the Razr can be found at Reveries. (Frost sadly passed away in late 2005.) Frost said:
There are no facts about certain things that are really, really important -- new design directions, new "experience design" directions and new kinds of experiences that can create new businesses. At the end of the day, we have to assemble the best clues and inferences we can, and the best set of facts on what's gone before, and make the leaps -- to make the best -- on the new things.
That's one of the great things about Ed Zander. When Ed joined Motorola, we were already working on Razr and we kind of knew we had a great product. He took one look at it and said, "How many can you make?"
While the success of the Razr seems obvious in hindsight, it was far from a sure thing beforehand. At $499 when it first came out, it was twice the price of previous phones. Frost noted:
There's a big lesson [here] about the limits of traditional research. Our traditional research told us there was a total available world market of about two million units for a $499 phone; we sold over two million units in the UK alone. So, the real lesson is, the best way to predict the future, as Peter Drucker once said, is to create it."
He then comes out with this:
The best way to predict the total available market for a new thing is to invent it.
This is a profound statement, but also one that is scary to many middle managers afraid of risk-taking based on partial information, or who want to use information about the past to predict the future.
(I highly recommend this article about the development process by which the Razr came to be, there are many lessons in it.)
Unfortunately, it seems that this attitude prevailed at Motorola, and that the magic moment of the Razr was not able to create a broader shift at the company, to create a more innovation-focused and risk-tolerant culture. The later generation Razrs lacked the innovative spark, and did not recognize that the competition had caught up and that fickle consumers' expectations had moved on. (And let us not speak of the Rokr travesty.) Zander and his team were not able to capture the momentum and convert it into continued growth.
Ed Zander
(Credit: Motorola)The imminent departure of Motorola CEO Ed Zander marks the close of an interesting period in Moto's history. Three years ago this month, the company emerged from its post-StarTac hibernation to give the world the now iconic Motorola Razr V3. As any gadget geek can tell you, Moto had a winner with the V3. It spawned several revamps and scores of imitators, and it launched a cell phone design revolution that continues to this day.
Since that time, however, some Moto watchers (us included) have suggested that the company was attempting to ride the Razr wave a bit too long. And while Moto has had a few non-Razr successes under Zander's tenure, it has had its share of bombs as well. We take a look at Zander's cell phone hits and misses in our slide show.
Correction at 8:15 a.m. PST: Due to an editing error, Motorola's standing in the handset industry was misstated. Motorola is the No. 3 handset maker worldwide.
Embattled Motorola CEO Ed Zander will resign from his post at the end of the year, the company announced Friday.
Greg Brown, Motorola's chief operating officer and president, will take over as the company's CEO. Brown was also appointed to the Motorola board in July.
Zander, who has struggled to right the cell phone maker and successfully fought off a proxy fight with billionaire investor Carl Icahn earlier this year, will continue as board chairman until the end of his term next year.
Ed Zander
(Credit: Motorola)Motorola, the world's No. 3 cell phone maker, was on top of the market at the end of 2006 thanks to robust sales of its Razr handset series. But as the Razr became more widely available and its price dropped, the company failed to offer a strong follow-up, began losing ground to competitors, and lost its No. 2 spot to Samsung.
Motorola said Zander also will continue to serve out his employment contract as a strategic adviser to the CEO through January 5, 2009. In that capacity, he will not be an officer at the company. A former president of Sun Microsystems, Zander was brought in as Motorola CEO in early 2004 to replace Christopher Galvin, the grandson of the company's founder.
Update at 7:55 a.m. PST: "We are exceedingly fortunate to have a leader of Greg's caliber, vision and experience," Zander said in a statement. "He has been an invaluable partner and I am confident he is the right person to be the next CEO of Motorola and lead the company through its multiyear transformation. Next year marks my 40th year in the technology industry. This is the right time for me to move on to the next phase in my life and spend more time with my family."
Greg Brown
(Credit: Motorola)Over the past year, Motorola has faced increasing competition and posted declining sales. Meanwhile, archrival and No. 1 handset maker Nokia has posted rising sales.
Motorola has undergone some management changes since the beginning of the year, when its chief financial officer retired and was replaced on an acting basis by Thomas Meredith, a board member from outside Motorola and the former chief financial officer for Dell.
In March, Brown was promoted to president and chief operating officer at Motorola, after having overseen four businesses areas at the company. Brown, who joined Motorola in 2003, handled the company's $3.9 billion acquisition of Symbol Technologies, the second largest transaction in the company's history.
In July, Motorola took the rather uncommon step in the corporate world of naming Brown to its board of directors. The CEO, and sometimes the chief financial officer, of Fortune 500 companies will sit on the company's board. But the No. 2 executive is not often part of the mix.
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