How To Start Turning Around a Behemoth
ED ZANDER, CEO, Motorola
By G. Pascal Zachary

(Business 2.0) – You replaced Chris Galvin as CEO of Motorola in January. What's the first thing an outsider does to run a legendary high-tech company that has seen better days?

I knew I was coming in at the top of an 85,000-employee company without any support structure. I showed up the first day and wondered, Whom do you trust? I didn't even have my own administrator. Over Christmas, I read three books: Jim Collins's Good to Great; the first 100 pages of Lou Gerstner's memoir on turning around IBM; and Execution, by Lawrence Bossidy, because I'd heard Motorola was only so-so in execution. I also called CEO friends of mine for advice. I had lunch with John Chambers of Cisco. I flew to D.C. and talked with Michael Capellas at MCI. And Pat Russo at Lucent.

I came in with a plan of action, but I also knew I'd better live in the house for a little while before I jump to conclusions and start firing people. In the first week, I had one-on-ones with everyone, letting them talk. As much as I like to talk, for the first month I tried to listen. I held one or two "town hall" meetings a week, all across the country.

How did you think about the message that you wanted to deliver?

I wanted the employees to understand my hot buttons, so I kept my messages very simple. Basically it was the five reasons I joined Motorola: the market opportunity; the technical prowess, with one of the strongest labs on the planet and a great patent portfolio; the brand, which, while tarnished, is an awesome franchise; the company's great customers; and, finally, the employees themselves. We've got great people who want to win. I didn't want to provoke them. I didn't attack the culture.

The decisions I made that first month were another way of communicating the message. I quickly validated the decision to spin off the company's semiconductor operations—that showed I wouldn't second-guess everything that happened before I got here. I also made a big decision to change the compensation plan for management to include criteria for quality and customer satisfaction. And to back it up, I hired a chief quality officer and a vice president for customer advocacy.

What was your biggest surprise when you arrived on the job?

That customers weren't a high priority at Motorola. I sat around my first three weeks, and no one asked me to make a sales call. So I picked up the phone and called two of Motorola's largest customers, Brian Roberts at Comcast and Tim Donahue at Nextel. I introduced myself and asked to go see them. That helped make my game plan very specific. Any advice I had for Motorola in the first months had better be right, or I'd spend the next six months undoing my mistakes. I knew the worst thing you can do as a CEO is to guess wrong. Your credibility goes to zero. — G.P.Z.