The person who best knows Nokia's organizational structure and strategy might be the CEO of top competitor Motorola.
"I pick up the Wall Street Journal every day or BusinessWeek or get on the Web and understand everything my competitors are doing," Motorola top executive Ed Zander told students at Harvard Business School recently. "I will even go to Nokia's Web site and get their org chart and look at what they are doing, or examine their P&Ls or their balance sheet, or what their strategies are. Know your competition better than they know themselves."
Zander, 58, provided observations on leadership, global competition, and the two-year turnaround-in-the-making of the $37 billion communications giant, which he took over in January 2004. Before Moto, Zander had stops at Sun Microsystems, Apollo Computer, and Data General, and spent time as a venture capitalist at Silver Lake Partners.
On the topic of what makes a good leader, Zander said executives in the technology business need the courage to act, a propensity for risk taking, passion for the job, confidence (but not arrogance) in their abilities, and a sense of urgency. "One of my challenges at Motorola is to get this thing moving a heck of a lot faster than it is today," Zander said.
Motorola was anything but swift at the start of the new decade. The company was hemorrhaging red ink in 2000 and 2001 to the point where serious liquidity questions were being raised, Zander said. Worse, the company known for inventing the cell phone and a string of other major innovations in its seventy-five-year history had lost its mojo. "Frankly, when I got here . . . the technology was getting a little old, and it needed to get refreshed around data networks and higher-speed networks," he said. Continuing a plan already started to downsize and restructure, Zander laid off 60,000 of the company's 150,000 employees.
Riding the Razr
"My job in December 2003, January 2004 was to revitalize the innovation and get this company back on track," Zander said. "It's been a challenge because you had so many people and so much culture and so much momentum in terms of what they were doing—it's probably taxed every management thing I learned in business school and after business school about how to run a company this size and move it toward a high tech, high-performance company."
| One of my challenges at Motorola is to get this thing moving a heck of a lot faster than it is today. |
One of his first actions was to support fast-track development of the product that was to mark the company's rebirth: the ultrathin, ultracool Razr phone. Launched in August 2004, the Razr was an immediate hit with consumers despite its steep $500 price tag. The company also debuted the first iTunes compatible phone, the Rokr. A pink Razr will be ready for Christmas and next quarter will see the Q—Motorola's product aimed squarely at the popular BlackBerry wireless e-mail device.
So far, so good. Motorola stock has doubled over the last eighteen months and its financial performance has moved from red to black. In the company's third quarter of 2005, revenue was up 28 percent from the same period a year ago. And its share of the handset business, which constitutes half of all revenue, has risen from 13 percent last year to 19 percent this year. (Nokia leads the industry with a 33 percent share.) Some 6.5 million Razrs flew out the door this past quarter, too.
But Zander is anything but complacent. "My management team will tell you we have a couple more years of hard work to get this to be where we think we [need to be] in terms of a first-class company. One or two years doesn't make a turnaround."
Future phone
For the future, he plans to put Motorola at the center of the "mobile Internet," he said. Consumers want seamless access to all the data now being digitized and put on the Web—everything from work documents to family photos to music collections. In the not-too-distant future, cell phones may be embedded in eyeglasses, and may also act as credit cards and keys that lock and unlock doors. "If you thought the last ten years on the Internet were kind of cool, wait till you see the next ten years. I think it's going to be bigger and more pervasive and more profound."
| I took dog jobs if I could learn from a great person. |
Asked what keeps him awake at night, Zander said just keeping track of all the industry currents and trends, and figuring out what they mean for his company. The industry, he noted, is not only consolidating—he spoke at HBS just after the closing of Sprint's acquisition of Nextel—but it is also converging through communications, computing, and entertainment. "The question is, am I moving fast enough to understand the convergence points? Are we lean enough, fast enough?"
On his own management style, Zander said he measures performance on output, not input. "The most important thing I look for in people who work for me is, what is the output? What is the output of those meetings? What is the output of that strategy?"
On the job advice front, Zander encouraged his student audience to work for leaders from whom they can learn. "I took dog jobs if I could learn from a great person," he said.
Motorola has outposts in seventy-six countries, so Zander's views on globalization and outsourcing were of special interest. To compete effectively in today's global world, he said, companies must invest in the countries they do business in, learn the ins and outs of doing business in those countries, and not view them as simply a source of cheap labor.
"We have to understand that it's not a U.S.-centered world anymore. Leaders of these countries realize it's not just about attracting U.S. business, but intellectual capital investment."
Zander spoke November 2 at the invitation of the student-run Globalization Club. 