Zander recalls 'tearful' first days at Motorola

It was Jan. 5, 2004, Ed Zander's first day at Motorola. The company was plagued by quality issues, financial confusion, and slippery launch dates. Plus, it was well below zero degrees Fahrenheit in Schaumburg, Ill., a long way from the mild Silicon Valley climate where Zander had spent the last several years.

"I cried," Zander joked, answering a question about the first thing he did upon taking over the storied communications company. It took about six months before Zander felt comfortable with the situation at Motorola, he said Friday during a leadership seminar hosted by the Churchill Club.

Motorola was plagued by a slow-moving culture that did not recognize the looming opportunity in converged mobile devices, Zander said. More than a year and a half later, Motorola's core phone business is drawing rave reviews for slick designs like the Razr and the Motorola Q, and the company's stock (MOT) is up more than 50 percent since Zander took over as chairman and chief executive officer.

Transforming Motorola in those early days was more about holding business unit leaders accountable for the performance of their division rather than implementing a winning strategy, Zander said. While preparing for the company's first earnings calls weeks after his first day, "I asked for the numbers and got 17 different sets of numbers. It was the only blowout I had while I was there."

It took a massive reorganization, which included thousands of layoffs and the spin-off of Freescale Semiconductor Inc., to get Motorola to a point where it could focus on Zander's strategy of "seamless mobility," a world where someone can be connected to the Internet in the home, in the office, in their automobile, and just walking down the street, he said.

In this world, Motorola will face competitors beyond fellow mobile phone vendors such as Nokia Corp. and Samsung Electronics Co. Ltd., Zander said. He expects that companies such as Dell Inc., Hewlett-Packard Co., and even new partner Apple Computer Inc. will release several devices that blend communications and computing. HP has already started to move in this direction with its h6300 series iPaqs, and Apple and Motorola just released the long-awaited Rokr music player phone.

Some analysts and Apple fans believe that Chief Executive Officer Steve Jobs will eventually develop an Apple-designed smart phone, based on Apple's traditional insistence on keeping tight control over the hardware that runs its software products. Zander declined to comment specifically on the idea of an Apple smart phone, but said "all computer companies are thinking about voice."

He did have some harsh words for Apple's new iPod nano, which many analysts believe stole the spotlight from Motorola's Rokr phone during a recent launch event.

"Screw the nano. What the hell does the nano do? Who listens to 1,000 songs?" Zander said. People are going to want devices that do more than just play music, something that can be seen in many other countries with more advanced mobile phone networks and savvy users, he said.

Motorola, and Zander, will have to keep their eyes on many different evolving technology trends in order to keep the momentum going over the next few years, he said. "This is the only industry where you can whack yourself out of a $12 billion company overnight," he said.