Motorola Splits in Two--Why The Razr Was a Fluke And What The Company Needs To Do Now.

Posted by: Bruce Nussbaum on March 26, 2008

Motorola has decided to split itself in two—a failing mobile-phone business and a so-so network equipment/two-way radio/set-top box business. This is a default strategy. Motorola tried for months to sell its mobile phone operation and no one in Asia, Europe or North America would buy it.
For good reason. The Razr was a fluke. Motorola was never an innovation-led company. It was a technology-driven company run by engineers who failed to understand the difference between technology and innovation. Let me explain. I saw the most amazing Motorola

technology coming out of its labs in China when I visited two years ago. Touch-screen cell phones, wonderfully articulated for the Chinese market. Motorola never integrated that technology into an innovation system that moved it from China to the US and mass market. Why? There was no innovation process, no regular, systemitized, standardized pipeline process that focussed on bringing out a steady stream of innovative products.

Engineers, loving their beautiful technology in separate labs for separate businesses, did their thing. And episodically, we got the walkie talkie and the wonderful Star-tac cellphone, still my own personal favorite. But, like the Razr, there was no real process. Each was a fluke.

The Razr came out of a little, skunk-works group working away from the main innovation/design operation. It was thin and beautiful--very traditional kind of design. But from the beginning, it had substandard, old software that drove consumers crazy. There was great software floating around Motorola, but it never got integrated into the Razr--even as they updated the brand.

So the Razr sold as a fashion item--on good looks. Nokia and then Apple blew it away with better functionality. People found their phones much more to offer, despite being less elegant.

Look at the companies on the S&P/Business Week Global Innovation Index. Motorola is currently in the index because it was based, in part on our 2007 survey of The Most Innovative Companies. It had a false reputation for innovation and the top manager respondents to the survey didn't get it. When the index gets updated in the weeks ahead as we come out with our new 2008 list of Most Innovative Companies, Motorola won't be on it. Companies that do technology right and get innovation wrong fail.

Motorola needs to bring in fresh managerial talent from the outside to reconfigure its business process. It needs to integrate it's dsign, technology and marketing operations to create an innovation process that is "owned" by consumers and that creates great new products and services for them. Not an easy task, but a necessary one.

Reader Comments

William Tarver

March 26, 2008 5:32 PM

Hi,

Yep... Companies that does technology right and get innovation wrong fail.

Remember Digital Equipment Corporation?

Best,

BT

RB

March 26, 2008 5:54 PM

The razr was not a fluke. It was simply copied and commodotized -- and no longer became a unique must have item.

Mots problem is that they don't offer anything unique in the marketplace. They need to offer a RIMM like service which will feed its mobile device biz and vice-versa. They bought Go Networks and haven't done anything with it. Splitting off is the best thing for them so they have more focus and can compete with the likes of Apple & RIMM.

Marty Neumeier

March 26, 2008 6:15 PM

I agree. I bought a RAZR when it first came out, on the presumption that style would be an indication of substance. It was not. The buttons were hard to use and the sound so weak that I couldn't hear a conversation in the car. When I traded it for a cheap Nokia, the sales people were incredulous. Yet this is the kind of design that gives design a bad name. I now have an iPhone, which, while flawed, is thrilling attempt at real design.

Mark

March 26, 2008 7:18 PM

The RAZR was not a fluke. Motorola replicated the process of diffusion and watch their process ride into the sunset almost exactly like they did with the Startrac (that previous best selling phone from Motorola).

Apparently, innovation at the consumer level is a periodic quest. Once achieved, rather that attack your own product with new ideas and disruptive strategies, the corporate way is to sit back and milk the cash cow without a long term plan.

"insert that standard quote about repeating history here"

LT

March 26, 2008 7:25 PM

You make some interesting points, however, it is hard to take you seriously with so many grammatical and spelling errors. Also, you never got to the "...what the company needs to do now" part that your title promised.

Thanks anyway.

bruce nussbaum

March 26, 2008 7:35 PM

Thanks LT for pointing out my spelling and grammar mistakes on the Motorola/Razr story. I think I've corrected them. And I also added a "what's to be done" section at the bottom.
Sorry, I had to blast off the blog this morning quickly. Not very good quality control.
Bruce

David Armano

March 26, 2008 8:48 PM

Bruce, great take on the subject. I expressed similar thoughts about how the RAZR was not a sustainable effort in the profile piece ID did on me for the upcoming Strategy conference. I like your distinction about the design of the hardware and software of the product.

I do agree with RB that another big issue is that Motorola allowed it to become a commodity. Hard to win in that game.

Also, you might want to check the background of on of your commenters here (Marty Neumeier), if it's the Marty I am thinking of—he wrote one of the best short books on Branding, Business + Design (The Brand Gap)

check it out.

http://tinyurl.com/3cd2t4

Brian Collins

March 27, 2008 4:57 AM

Bruce:

First, David Armano is right about Marty Neumeier. I have all my graduate students read his sharp book The Brand Gap, before they begin my thesis class.

Second, you are exactly right about Motorola.

For four years my team and I worked closely with Geoffrey Frost, the former - and visionary - Chief Marketing Officer at Motorola. ( Actually ID Magazine did a nice story on our work with him. )

Tragically, Geoffrey passed away just as Motorola was finally recognizing the powerful influence his kind of innovative thinking was having on their brand. Frost, who had also been at leader Nike, was a true maverick. Every day he successfully challenged an entrenched atmosphere of "NO!"

From product development to advertising, Geoffrey provoked everyone to do better. He questioned everything. At the time of his death, he was working with his team to create a more innovation-driven culture - everywhere.

They had the wind at their back with Razor - and several other innovations. It's a shame their divided culture never developed a systemic approach to capture that kind of energy more consistently.

Still, there are amazing people within Motorola. And remarkable technology. Unburdened by its connection to the the rest of the corporation, my hope is they will find fresh leadership who will focus their people on the future and not on internal power struggles.

One leader, like the remarkable and sorely missed Mr. Frost, could make all the difference.

Hell, hiring Marty Neumeier might not be a bad first step.

brian Collins

March 27, 2008 7:42 AM


You are exactly right here, Bruce.

My team and I worked closely with Geoffrey Frost, the former - and visionary - Chief Marketing Officer at Motorola. Frost, who had also been at leader Nike, was a true maverick. Every day he fearlessly challenged a deeply entrenched atmosphere of "NO!"

Tragically, Geoffrey passed away just as the company was finally recognizing the powerful influence his kind of innovative thinking was having on their brand. From product development to advertising, Geoffrey provoked everyone to do better. He questioned everything. And he was working with his team to create a more innovation-driven culture - everywhere.

They had the wind at their back with Razor. It's a shame their divided culture developed no systemic approach to capture that kind of innovation more consistently.

Still, there are amazing people within Motorola. And remarkable technology. Unburdened by its connection to the rest of the corporation, my hope is they will find fresh leadership who will focus their people on the future and not on petty, internal power struggles.

One leader, like the remarkable and sorely missed Mr. Frost, might make all the difference.

Sid Ramnarace

March 27, 2008 4:16 PM

Motorola's experience with the RAZR highlights the need for R&D departments to better understand the convergence of traditional product design and user interface design.

User interface Design had traditionally been under the direction of software developer, while leaving the shape and housing to a separate team of industrial designers.

Compounding the woes of the RAZR, Motorola let individual carriers develop their own byzantine software thereby making the disconnect in user experience even more pronounced.

Clearly, Apple has managed the convergence of product and user interface design the best. While not perfect, they are redefining the traditional roles of the Designer and breaking through the walls of hegemony between different departments within R&D.

This will now be the standard for cutting edge product development groups. Alas, a bit late for Motorola.

Mod

March 27, 2008 5:14 PM

I just dont understand why they would use such cheap material in China when there is cheap labour , they could have labour savings on genuine materials.

ravi

March 29, 2008 2:44 AM

This is so very correct and unfortunate. Motorola need not look further that those who bought their phones at its initial premium cost. For that period, they had captured their evangelists but then failed to realize it. Why not replenish your consumer's thirst to replenish their need to acquire the latest and greatest? Still, Motorola's brilliance shouldn't be discounted but admired. Following a great act and obsoleting your own cash cow is a tough pill to swallow. None the less, technological invention coupled with the strategy generated from consumer insight and understanding would have created a great sub-brand for Motorola. And, one that need not have need to challenge their cash cow. One wonders if someone was ultimately asleep at the switch. It seems to be a logical explanation. Apple pulled it off without any technological break though.

Alex

March 30, 2008 11:02 PM

This is a great piece. I appreciate the author's comment to LT indicating this was just a quick, not necessarily all-inclusive blog.

I have encountered many former Motorola employees who all believed very strongly in what I thought to be a terribly run company. I would love anyone's thoughts on how they have built the brand name so well with minimal innovation.

Puneet Thariani

April 8, 2008 6:19 AM

Yep, fo ronce even i had bought the RAZR, but then realized that it nothing more than a 'smart looking dumb phone', i cursed myself for not choosing a rather 'dumb looking smart phone'. Motorola has to get in some serious 'fun' element in its models or its going to be hard to survive in the Market. Why can't designers at Motorola think about something different and 'attractive'. Also like bruce pointed out correctly that Motorola is an "engineer/tech" driven company, why don't these people work on a cool interface rather that opting for a dumb linux based one. Yes for those who don't know the MOTO RAZR is powered by a linux OS. A personal note here: when the Linux couldnt spin magic with its UI/GUI on a 21 inch screen how do yu expect it to do wonders on a 2.1 inch screen:-).
LORD SAVE THE MOTO

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About

Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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