Ed Zander believes in connections. The CEO and chairman of the board of Motorola Inc. is a passionate proponent of “seamless mobility,” a confluence of technology and connectivity that allows consumers to access their phones, homes, offices, friends, and Internet accounts no matter where they are or what they’re doing.
With products such as the MOTORAZR phone and the MOTO Q wireless device, Motorola is at the forefront of this drive toward unlimited accessibility. “We are enabling people to link and sync with what matters most in their world—anytime, anywhere, from any space,” he says.
Things weren’t quite so rosy at Motorola in 2004 when Zander stepped into the head offices in Schaumburg, Illinois. The company that had invented the Six Sigma method of improving quality was falling behind in the race to produce new products for the communications revolution. Zander was instrumental in managing the company’s turnaround, overseeing the launch of the RAZR and the Q, and hammering home the message of constant innovation. Zander also orchestrated Motorola’s acquisition of Symbol Technologies, which handles products for mobile computing, radio frequency identification (RFID), and wireless infrastructure. By 2005, Motorola had achieved $35.3 billion in sales.
The company is both shaping and profiting from the explosion of new technology that is transforming the communications industry. “Everything is getting digitized, everything digital is going mobile, and broadband is becoming as pervasive—and as essential—as air,” says Zander. Enabling the digital society, he says, are technologies such as ad-hoc and mesh networking, mobile TV, and enterprise mobility. And while those terms might sound mysterious to anyone outside the industry, Zander is wholly at ease with the new systems and what they can do.
In fact, technology has been his guiding passion ever since he received his bachelor’s degree in electrical engineering from Rensselaer Polytechnic Institute. An MBA—and later, an honorary Ph.D.—from Boston University followed, but the business education has been used primarily in service of technology. Before joining Motorola, Zander held a range of positions with Silver Lake Partners, a private equity firm that invested in technology; Sun Microsystems; Apollo Computer; and Data General.
Throughout his career, he’s been a proponent of innovation, and he believes an innovative mindset is crucial for any top executive. “You should never be complacent, no matter how successful you become,” he says. “Companies that don’t innovate don’t survive, and leaders who don’t innovate are replaced by those willing to take risks. The key to success is to drive innovation.” That’s advice that both CEOs and Ph.D.s can take to heart.
The next set of business school students will be people who have grown up communicating in a variety of different ways. Ninety-five percent of them use instant messaging, own their own mobile phones, or have a broadband connection at home.
When you joined Motorola, you spoke of your commitment to the notion of “seamless mobility.” It seems like we’re almost there already. What’s left to fall in place?
What’s next, I believe, is extending seamless mobility to more and more users. When we talk about connecting the next billion, we’re referring to the half of the population that has yet to make a phone call, wired or unwired. We’re also talking about the millions of opportunities that connectivity can bring to enterprises.
By cutting across devices, infrastructure, applications, and services, enterprise mobility delivers information in all forms to people and things in motion. And it delivers that information across the supply chain—to mobile workers in the office, out in the field, in the factory, and at retail.
Many business schools already have wi-fi capability on campus. They provide lectures via podcast, content over the Web, blogging opportunities on their sites, and many other services. What should business schools be looking at as the next technology that either will change the way they educate students or create a sense of community among them?
Social media is the next step. It’s a perfect example of what seamless mobility is all about—anywhere, anytime communications.
The next set of business school students will be people who have grown up communicating in a variety of different ways. For example, we have statistics about the people who are currently between the ages of 12 and 21. Ninety-five percent of them use instant messaging, own their own mobile phones, or have a broadband connection at home. More than one-third have access to all three of these connections.
It’s no surprise that, compared to adults, these young people exhibit starkly different behaviors and attitudes about mobile phones. Among these users, content consumption is moving from individual to tribal groups or communities, as people want to interact with others who have similar interests. Coupled with this trend is the Internet’s move toward user-generated, easily shared content—the “wiki” concept. All the major players, such as MySpace.com or Friendster.com, know that there’s a lot of benefit to be gained by getting users involved in content.
We’re researching how content can be shared to create greater networks of people and create social communities. A community within the business school or a class would be a great application of this technology.
The MOTORAZR can perform so many functions that it blurs the line between communications and technology. It’s a phone, a camera, and a wireless high-speed Internet device that’s also capable of downloading music and videos. As convergence becomes the watchword of the tech industry, how can any company stay on top of the changes and remain successful?
One key to success is creating cool designs and cool experiences for consumers around the world. The real challenge is not to generate ideas with breakthrough potential; it is to select and manage those ideas to become actual commercial breakthroughs. To succeed, companies must set clear innovation goals, select the right ideas for development, and create an agile organization to drive ongoing innovation.
I’m guessing that one reason you’re so comfortable with technology is that you earned a degree in electrical engineering before pursuing your MBA. If today’s students want to work for tech-driven companies, do they also need a deep grounding in technology or engineering?
Given the rapid pace of change and growing complexity in the technological sector, additional training in engineering or technology, while not mandatory, is beneficial. With some technological understanding, managers can speak the same language as product developers and enhance their insight and effectiveness.
I started an extensive series of meetings with customers. I hoped to make Motorola a company that was led more from the outside—that is, by customers—than from the inside.
How can business students learn to stay ahead of rapid technological change once they’re in the workplace?
Change is happening at an ever faster pace. Around the world, new ideas, disruptive technologies, and new companies are emerging and shaping the global market.
The U.S. must take action to maintain its leadership position. Business schools can play a key role by partnering with the government and corporations to proactively strengthen the education system and aggressively develop research programs.
Students will naturally embrace change, but a solid understanding of the fundamentals of math and science remains critical. What’s important for universities—as well as for businesses—is the creation of an environment that fosters and supports innovation.
Speaking of change, Motorola made a big one by acquiring Symbol Technologies in 2006. Other tech-oriented companies like Google and AOL have implemented high-profile mergers and acquisitions, some of them successful, and some of them disastrous. Why do you believe the acquisition of Symbol was crucial for Motorola?
One of the reasons we were so attracted to Symbol was the depth and breadth of its product offerings. Because our products and services are highly synergistic, we could combine our adjacent assets, expertise, customer bases, supplier bases, and products.
The acquisition of Symbol Technologies was Motorola’s largest transaction since I have been CEO, and large acquisitions can be risky endeavors. Our primary acquisition strategy has been to acquire small companies that are developing cutting-edge technologies. These companies are not only aligned with our vision of seamless mobility, but offer opportunities for future growth.
How can business schools can help students analyze which M&As will be good for their companies and which might be terrible?
I’ve found that most transactions are grounded in a compelling strategic rationale, but the trickiest part of any deal is valuation. The transactions in which companies overpay are the ones that wind up failing to create value.
When you came to Motorola in 2004, the company was struggling financially and dealing with aging technology. What strategies did you use to turn the company around?
First, Motorola had made a lot of good progress before I arrived. But I found it necessary to drive change at Motorola, as the status quo was obviously not delivering the desired results. This was not easy, since Motorola was a 75-year-old company with an established culture and history. But it was manageable. Early on, I recognized the importance of having a strong, cohesive leadership team. Part of the success of the turnaround has involved fostering the talent of this team.
It was the management team that recognized the profit potential in the MOTORAZR phone, which was being developed by a couple of engineers as part of a side project. It has gone on to do quite well.
It was also important to shift the focus of Motorola. When I took the CEO position, I started an extensive series of meetings with customers. I hoped to make Motorola a company that was led more from the outside—that is, by customers—than from the inside. This type of interaction has enabled us to create products that meet and exceed customer expectations.
Although Motorola’s handsets were the hot topics during this period, we did not ignore our other businesses. We combined divisions to create a more streamlined organization, and we divested ourselves of our automotive business. At the same time, we further sharpened our strategic focus on communications solutions to improve seamless mobility.
Another one of your goals was to make the company more nimble and open to innovation. How can you push a long-established company in that direction?
The initiatives I just mentioned were part of the transition process that enabled us to become more nimble. But another important asset in this area has been Motorola Ventures, which is our global venture capital investment arm. Motorola Ventures has made more than 100 investments since its first deal in 1999, and it currently invests in approximately 25 companies and 20 to 30 follow-on rounds a year.
With Motorola Ventures, we’re seeking to invest in companies with technologies that complement Motorola’s. Sometimes these investments lead to acquisition opportunities or business partnerships. By investing in early stage companies, we accelerate access to new technologies, markets, and talents. This allows us to innovate faster than we could if we developed these technologies through traditional research and development channels.
You also strove to break down organizational walls by stressing the value of teamwork, a concept that is highly emphasized in business schools. How can a business school prepare students to be ready for a team-oriented working style?
Collaboration is the cornerstone of teamwork. At Motorola, where we are scientists, artists, and business leaders, everyone contributes to our common goal of bringing cutting-edge technology into everyday life, with style.
Business schools can, and do, prepare students for the real working environment through team-oriented projects. Breaking students into arbitrary teams to tackle a project with real time pressure can help them appreciate the skills and talents that other people bring to the table. Working with and incorporating local businesses into these projects can further enhance their realism.
Drawing on the lessons you’ve learned in your own career, what advice would you give to business students who might also be asked to solve large problems and deal with rapid change?
At the height of success, break your business.
This may not seem logical at first, but it is an important and useful method for maintaining a thriving company.
At the height of success, break your business. This may not seem logical at first, but it is an important and useful method for maintaining a thriving company.
I’ve learned that innovation drives success—not just in the technology sector, but in any industry. Successful companies are always creating new business models and new technologies that allow them to expand into new markets and offer higher value goods and services. Successful companies need to be more concerned and more innovative than the competition.
So when a company reaches the height of its success, a good leader will shake things up by “breaking” the business. When things are going well, it’s time to make new investments, adopt new strategies, and find new markets. Drive innovation by moving people around. Changing the company’s organizational structure allows different people to interact and new, innovative ideas to take shape.
You can also “break” the business by investing strategically, both internally and externally. Internally, we make huge investments in research and development. Our R&D portfolio of more than $3 billion is aimed at creating innovative technology, architectures, and software that will deliver commercial value. In addition, our Early Stage Accelerator group incubates ideas that cross business units, licenses them for use, and accelerates the commercialization of our products. Externally, our venture capital arm looks for innovations outside the company and helps make them a reality.
Many people view Motorola’s turnaround as a completed success story—a great case study for the business school classroom. But for you, the story is still ongoing. What next steps are crucial to the company’s ongoing success?
We have been able to take the cell phone and make it something that not only is desired and coveted, but also is an intuitive, easy-to-use device that is a seamless extension of the individual consumer. We will continue to build upon our strengths and further drive the momentum we have created with our seamless mobility platform.
What are some of the key issues you see facing business schools today, and how should business schools address them?
Business schools need to ready their students to operate with the same level of comfort in New Delhi as in New York. Curricula and actual experience are always key, but a deeper understanding of various cultures and politics will be of even greater importance for tomorrow’s business school grads.
MarketWatch named you its 2005 CEO of the Year for the way you handled the turnaround of Motorola. But you’ve said you think the best CEOs are those who are quietest and who don’t appear often in the news. What would you tell students who want to become top business leaders?
The global market is now more fiercely competitive than ever, and the pace of change has dramatically accelerated. The key to running a global business in this environment is the ability to adapt and innovate.
Successful corporate leaders need to be willing to make big bets. Sometimes you will be right, other times you will be wrong. But you never win without being bold.
You also should never stop learning—it’s a lifelong process regardless of the diploma you’re receiving today. Keep reading and learning from those around you—they’ll inspire you to innovate.