BUSINESSWEEK ONLINE : APRIL 17, 2000 ISSUE
INFORMATION TECHNOLOGY Galvin on the New Motorola: "Fast, Smart, Quick, Agile--Go" The voluble CEO talks about his strategy, the Net, the Iridium fiasco, and more Sitting in the Motorola museum at Motorola Inc.'s headquarters in Schaumburg, Ill., not too far from replicas of the wireless phones, radios, and televisions that Motorola has invented over the years, CEO Christopher B. Galvin talked with Chicago bureau correspondent Roger Crockett about Motorola's comeback. Using a series of overhead slides to emphasize his points, Galvin explained how he has reinvented his company through the implementation of new strategies and acquisitions. Here are edited excerpts of his comments: On making the tough decision two years ago to reshape the company's strategy: There were things in our control and things outside of our control. There were things outside our control like the Asian currency crisis and recessions in certain parts of the world. So we had to adapt to those things. And with the things that we could control, we determined that if made mistakes in the past, we'd go and correct them. If a big wind storm comes and blows your favorite tree down in your yard, once the tree is completely uprooted you've got no choice but to sod off new wood and plant a new tree. So we decided we would go back and seek to change everything at Motorola except our principles, our character, and our ethics. And that will never change.... We went back to define what is the essence of Motorola. We're the company that links people's dreams with technology's promise. We've done it historically since the company was founded, and we have an enormously wonderful opportunity to do it going forward. On arriving at a specific corporate structure: We're changing from a product company to a solutions business. Why? Human beings have an absolutely insatiable appetite to communicate. Which then suggests that the market size for an integrated communications solutions business is infinite. There's no way to size it. It's just infinite. So therefore, it's a pretty nifty business to be in. Someone has to make all this stuff work. We asked about 4,000 consumers all around the world tell us what [they] dream about. We've done more market research in the last two years than in the entire history of the company. If you distill the essence of what they said, they wanted to have products that are smarter, simpler, safer, and synchronized. Then we said that over the next 5 to 10 years, the real high-growth opportunities are in broadband, the Internet, and wireless. So we said, "Let's target those areas." Our strategic focus is at three levels of the value chain: solutions on a chip, integrated embedded solutions [chips and circuit boards that power everything from automotive dashboards to toasters], and end-to-end network solutions. We will deliver wireless, Internet, and broadband especially tailored for the person, the work team, the home, and the car. On the philosophy driving the new Motorola: We are borrowing about 80% to 90% of General Electric's leadership supply model. It's based on four "E" words plus one. We added the word envision. Envision means creating the future, imagining what's next. Energize means we want leaders to create a lot of energy around what's exciting at the company. Edge means keeping a hard, sharp edge and making tough decisions when necessary. It's knowing when to grab people by the arm and say, "You have to collaborate." If someone is unable to serve a customer or shareholder, you have to find a team that can. That's edge with heart. Execute means you can have all the dreams that you want, but if you don't get the product out on time...well we know what happened with analog and digital handsets. When we didn't execute on time, we didn't get the business. Finally, there's ethics. We want to be the most trusted corporation in the world. On the newset innovation to Motorola's culture: Simplicity and a combination of edge with heart, and making the tough decisions while not de-energizing people. In order to win, you have to have a balance. If we all get the message, then we'll all have the same DVD playing in our head to go out and execute on behalf of the customers. The last message here is urgency, speed, Internet time...in everything that we do. Fast, smart, quick, agile -- go. This is what will make the company different, so we can avoid whatever were the issues that occurred in our past. On the importance of the Internet: The Internet changes everything. Why is it so profound? It's providing the opportunity to give individuals more power than governments relative to knowledge. The world's knowledge is essentially available to every individual. It allows you to re-architect around information. In the next three to seven years, there will be Internet-based telephony, and it will change everything. [The importance of the Internet] was evident to everyone when we sat down and looked at the company's position. We didn't want to just be a hype-filled company. We wanted to make sure that we could do something unique with it. On improving Motorola's market-share position in handsets and infrastructure equipment: We have to put all our energy into what's next. We're off establishing ourselves in telematics [wireless systems that allow electronics in cars to talk to devices in homes and businesses and in people's palms]. We think it's the next big thing. In handsets, we decided we'd be the biggest sponsor in Web-enabled phones. The people that have a leadership position in Web phones introduced so far is us. In end-to-end network solutions, we decided to focus on GPRS [an Internet system that runs on top of existing networks]. [The company that is] the farthest ahead on trials with working product in Internet handsets and infrastructure itself is Motorola. While catching up, we're also trying to establish a position of leadership. You can't bring the Internet to the handset unless you have those underlying technologies. On the advantages of buying cable equipment company General Instrument: We didn't have a major play in wired or broadband technologies.... It gives us an opportunity to sit back and look at the world and say what needs aren't being fulfilled. And how do you establish a leadership position in a big growth business with enormous demand. The answer was here: the last mile to the home. [GI gives us the ability to] partner with companies and can give them what they want -- cable, video, Internet, and wireless -- in order to service their customers. We have to fill up our quiver with arrows to be able to [serve] each of our customers, and let them decide which arrows they'd like to shoot. And we're going to bring as many of those quivers as we can. On the bankruptcy of the global satellite system, Iridium: The concept of building a global architecture in space and delivering it to all those major areas around the globe is a pretty spectacular vision. Making a global system work in four to five years is nothing short of amazing. It's like going to the moon. Those were incredible accomplishments by really smart people. But it was targeted as a narrowband, voice-only system conceived about 10 years ago. What happened along the way? Cellular standards like GSM got deployed around the world significantly faster than anticipated at the time. And the Internet got discovered. Those two things changed everything. [Wireless guru and investor] Craig McCaw said when he sees the future now, it's the Internet, so he needs wider bandwidth than the Iridium architecture can allow. [Iridium's failure] won't discourage us from being a pioneer. The timing didn't work out as optimally as we would have hoped, so now we move on. On Motorola's position in the marketplace today: We're more comfortable than we were a year ago. Why am I encouraged? This company has changed as fast or faster than most other big companies have. The fact that we have early traction -- not complete traction but early evidence of traction -- on becoming a solutions company, on being an alliance-oriented company, on being a company that can decide it can change and get into motion on the right kinds of things, listening to customers and consumers. On that I'm encouraged. Are we there yet? No. Have we accomplished all we want to accomplish? Not by a long shot. Are we working on the right things? Are we listening to our customers and consumers? Are we energized and moving? Yeah, that part is good. It's going to be a matter of how fast and how well we get it done. And if we do, we win. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS A New Company Called Motorola TABLE: Unfinished Business TABLE: Motorola's Comeback ONLINE ORIGINAL: Galvin on the New Motorola: "Fast, Smart, Quick, Agile--Go" INTERACT E-Mail to Business Week Online

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