Motorola – how not to do business

By March 2, 2009 5 Comments

There is an FT interview with Greg Brown, Motorola’s joint CEO, which shows how the company’s handset division has been little short of a lesson in how not to do business.

Full marks to Greg for his honesty and candour, but this is head-in-hands stuff for Motorola shareholders.

In the following table the content in column headed “The Motorola way” is copied from the FT article and the pearls of wisdom in the other column are mine.

The right way

The Motorola way

Know your customer

But Mr Brown says Motorola did not spot quickly enough how mobiles were evolving from simple devices for making phone calls into sophisticated handsets for surfing the internet and sending e-mail.

Be on top of the key trends in your market

Motorola’s failure to anticipate the growing importance of mobile software rather than handset design

Keep it simple

While its rivals have been striving for simplicity, Mr Brown says Motorola has been “rolling against the tide” by using several operating systems and chipset suppliers.

As a result of these mistakes Motorola has seen it’s market share slip from 23.3% in Q406 to 6.5% in Q408, has seen the number of handsets sold slip from 217m in 2006 to 100m last year, lost $2.2bn in its mobile division last year and is now laying off 5,000 employees (50%) and 10,000 contractors.

It sounds like Greg has got a handle on all this, so hopefully things will start to improve from here.