I’ve had a lot of discussion this week about Motorola.  Readers of this blog know I’ve been a big fan of Motorola, yet here we are today with the company’s value barely higher than it was 4 years ago (see chart here) – and the savior CEO is being replaced. 

A Chicago analyst put Motorola’s situation well when he headlined "Big Expectations, Harsh Realities Plague Motorola" (see article here.)  The Phoenix Priniciple is all about growth.  When growth breaks out, you can’t stockpile it to use some future date. You have to keep growing.  Motorola Disrupted 4 years ago, and a slew of White Space projects led to rapid growth.  One of those projects was a breakout phone called RAZR – but that was just one.  Motorola bought Good, Symbol and brought out several new products in DVRs and 2-way mobile radios.  But this wasn’t enough (read full article here.)

Never forget Motorola once was the #1 microprocessor manufacturer – as the brains behind the early Macintosh.  Motorola also launched Iridium.  Not only was Motorola a huge leader in cell phones, but the company designed and deployed a satellite-based system intended to potentially augment or replace cell phones.  Motorola uses White Space. But, unfortunately, when things start working the company also has a penchant to start Defending & Extending that success.  Motorola’s Lock-in to infrastructure products meant the company didn’t give up on Iridium early enough.  And Motorola Locked-in on analog phones, which they led, moving to digital phones way too late. 

Trying to Defend & Extend what works has once again gotten Motorola into trouble. RAZR was a great product.  But by focusing on growing share through RAZR, innovation declined.  Instead of keeping Disruptions happening, and new White Space projects flourishing, Motorola overly focused (once again, unfortunately) on extending what worked (notice past tense) rather than maintaining innovation and keeping its eyes on the long-term future.  Now other mobile handsets are more innovative, and the other markets where Motorola invested are growing – but not fast enough to keep over-all company growth rates out of the Stall Zone.

Motorola’s new CEO needs to do exactly what the company did 4 years ago (see article on new CEO here).  Disrupt and open White Space.  Motorola is full of innovations – across all its businesses.  It needs leadership to Disrupt Lock-ins to hierarchy and sacred cows so that innovation can rapidly come to market.  If Motorola instills Disruptions and Lock-in it can repeat past breakout success and return to above average growth.  If it returns to The Phoenix Principle, and eschews D&E Management, its future looks very rosy indeed.  But the threat of failure looms large if management avoids Disruptions and doesn’t invest in White Space – needed now more than ever at Motorola.