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Motorola's fiscal chaos brought CEO to tears

One-liners to the rescue

Never afraid to pat himself on the back for a job well done, Motorola CEO Ed Zander took massive amounts of credit for turning around the telecommunications company, during a speech here yesterday.

When he first arrived at Motorola in January of 2004, Zander - a Silicon Valley veteran - broke into tears both because of the Chicago cold and the state of the company's operations.

"The first thing I did was cry," he said, when speaking at a Churchill Club event held at the Computer History Museum. "It was cold, and I cried."

But the frigid winter was just one factor contributing to the weeping Zander. One look at Motorola's operations, and Zander decided - "It was about as bad as anything I had seen."

As the end of the first quarter on Zander's watch neared, the CEO asked his top business unit leaders for their financial projections. Instead of a clear picture of Motorola's fiscal state, Zander received a dose of shock and horror. The executives refused to commit to targets. They had wide ranges of possible results based on complex metrics. The dire situation seemed the stuff of SEC officials' and investors' nightmares.

"I asked for the numbers and got 17 different sets of numbers," Zander said.

While Chief Operating Officer at Sun Microsystems, Zander enjoyed a much more consistent reporting scenario in which managers were held accountable for specific targets, he said. In addition, Motorola no longer paid attention to its customers, failed to deliver products on time and lacked the basic execution necessary at an IT giant.

So, instead of wasting time on a new "vision" or marketing campaign, Zander called for a return to the basics. He demanded that business unit leaders pick single targets for the quarter, that the product teams set specific dates for the delivery of new gear and that workers communicate better with each other and customers. Some of Zander's more touching initiatives to pull off this bold strategy included a weekly radio show and so-called town hall meetings where staffers are free to gripe about their wages or Fast Eddie's permanent tan.

As much as Zander seemed to be taking personal credit for Motorola's resurgence - the company's stock is up to $22.80 from close to $15 per share when he took over - he humbly refused to link his winning personality with the company's success.

Plenty of the talk during the Churchill Club's "Leadership" event centered around celebrating cultish executive types. Apple's CEO Steve Jobs was mentioned by almost every presenter as a model of the cult CEO. Zander, however, insisted that focus on these cult figures or the "religious" nature of Silicon Valley is a bad idea.

"I haven't been here in two or three years, and now you guys are into cults," he said. "This is scaring me. It really is."

Via selective omission, Zander seemed to hint that his former boss at Sun Scott McNealy - also mentioned repeatedly as a cult CEO by the speakers - may have relied too much on personality and not enough on logic during Sun's post-boom collapse.

"I have to give credit to (Bill) Gates and Michael Dell and Andy (Grove) at Intel and (Lou "The Dancing Elephant") Gerstner at IBM where, after some time, they realized it was time for somebody else to do the day-to-day operations," he said.

"The thing that drives great companies is having passion, (but) it gets you into trouble when passion becomes a religion."

Throughout our long history covering Zander, the executive has always had the right one-liner on hand for the right moment. One of the favorites being, "It's never as good as it feels, and it's never as bad as it seems."

In keeping with tradition, Zander was on form at the Churchill Club event.

"I worry all the time about the competition, but I also know you have to play offensive, and you have to take control of your own destiny."

"The best thing in the world is to have a customer base, and get big. The worst thing in the world is to have a customer base and get big."

And on Steve Jobs - "He is my buddy. I would hate to see what his enemies look like."

And on his approach to learning as a CEO and finding visionary ideas - "I always steal. I will steal a slide. I will seal an idea. I will steal anything."

Such quips make Zander a fun subject to watch and to report on but often leave one wondering how much of his personality is a show and how much is substance.

He once spent 20 minutes persuasively answering our question about why Sun was late to adopt the UDDI web services platform only for us to find out later than Sun had in fact backed UDDI that morning. We had missed the announcement, and so obviously had Zander. After our chat, however, it seemed crazy that Sun would go the UDDI route. Zander had been so convincing on the subject of why standards were often worthless. In short, he can convince you of just about anything and do so without knowing what he's talking about.

So when Zander said, "(The media) makes these CEOs bigger than life. We are not bigger than life. I think we are too full of ourselves sometimes" at the Churchill Club event, you had to wonder if he believed a syllable of it. We've always sensed that Zander wouldn't mind a "Cult of Ed" existing.

But who are we to judge? Let's take Zander at his word and not build him up too much. ®


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