By Loren Jersey
Throughout the greater part of the last century, and all of the current one, the name Motorola has inspired awe in all who heard it. From their humble beginnings in 1928 as the manufacturer of the first commercially successful car radio, to the invention of the cellular telephone in 1984, Motorola has always been a leader in the electronics industry.
Motorola’s stock has however painted a very different picture, one that speaks of a continuing struggle with focus and priorities. “We thought we could do anything” said former CEO Bob Galvin, “We thought we had limitless resources.” This was never more apparent than in 1998 when Motorola invested billions to launch 66 satellites into space to create the very first global satellite communication network. To avoid bankruptcy, Motorola spun off the Iridium*project. This move worked well for Motorola, and signaled the beginning of a new operating paradigm. No longer would Motorola try to do everything. Instead they would become a company focused like a laser beam on what they considered to be their core competencies. But what were these core competencies? With so many diverse divisions, Motorola couldn’t do anything well. Thus began the arduous task of peeling away the layers of incompetency, a road filled with trials, which would finally lead Motorola to discover who they really were, and what they were good at.
In 1999, in a courageous effort to narrow their product portfolio, Motorola spun off its semiconductor division as On-Semiconductor.
In September, 2001, still drowning in their broad array of sectors and divisions, Motorola decided to spin off its government and defense business to General Dynamics.
On October 16, 2003, having realized that there was still some semiconductor development going on even after the ON-Semi spin-off, Motorola announced that it would spin off its semiconductor product sector into a separate company called Freescale Semiconductor, Inc..
In January of 2007, Motorola announced it was selling its floundering automotive division to Continental AG, citing many incompatibilities with the current business model, as well as a very broad product line ranging from vehicle sensors to stolen vehicle tracking systems and emergency call systems. “Sensors? That sounds suspiciously like a semiconductor” said then President Ed Zander. “We don’t do semiconductors anymore!”
A true visionary, former CEO Ed Zander spoke of a single core competency for Motorola, and in his mind that was cell phones. After all Motorola invented the cell phone. Who else could do it better? Nevermind that despite the success of the RAZR, Motorola was still only number three. But Zander insisted that if they but focused their enormous resources on that one task, they would be unstoppable. But after the success of the RAZR and it’s offspring began to wane, new gems appeared. The board of directors took action, and in late 2007 Ed Zander was replaced by Greg Brown as CEO.
Now, in 2008, it seems likely that Motorola will spin off its cell phone division. Where will Motorola’s journey of self-discovery take it? What is its core competency? I asked Motorola CEO Greg Brown what his thoughts were. “Motorola has had a strong brand name for 80 years now, and that, I believe, is where our core competency lies. We will continue to sell and spin off various products and divisions as we make this journey. Ultimately we will be left with that one thing we do better than anyone. I believe that the batwings logo is our core competency, and we intend to leverage that strength to become the number one brand logo.”
*case in point: the Iridium project, so named because the original number of satellites was 77, the atomic number for Iridium, launched only 66 satellites, the atomic number for Dysprosium, a lanthanide. Ugh!