Motorola Plan B
Nov. 30, 2007Motorola said that Edward J. Zander will step down as chief executive of the troubled cell-phone maker on Jan. 1. He will be succeeded by Greg Brown. Zander will continue to serve as chairman of the board until the company's annual shareholders meeting in May 2008. Brown joined the company in 2003 and has served as president and chief operating officer since March.
I agree with the pledge - especially with replacing non-professionals (Zander, Lewent, Negroponte ...). Pity that the pledge is here so late - when MOT is already heading downhill with no brakes. I do not recall even ONE GOOD thing that Zander did for MOT. All he did was firing people, steadily, quarter after quarter. Even this he did not well - he forgot to fire himself in the first place. If I could I would add to the pledge one more point : all candidates for top management positions shall pass some basic tests in decision making and strategical analysis - I bet most would fail. If they did go through tests like that then they would never be selling phones with such a low margin that would create loss. MOT has many very talented engineers but I saw their skills being wasted on cumbersome, unproductive activities - usually when the "new order" was being introduced. MOT management do not have a plan for the future, they are reactive, work with a very short vision. Another thing is - why keep paying pathetically small dividends for the sake of paying only. If the dividend is so small that it is laughable, then rather don't pay it at all, and instead invest $ in research, marketing and good fashion designers' pay slips (aesthetics is a must for mobile phones etc). Even the phone names that are coming after RAZR show lack of imagination - SLVR, KRZR, RIZR etc - they really can't do any better than picking 4 letters that are almost impossible to pronounce ? And even with RAZR - they follow the easiest path - add a number to a "good" name and that's it (RAZR2). This is what they are paid those millions of dollars in salaries. Really sad.
Mr Jackson - I agree with what you are proposing with the exception of Ed Lampert - Lampert is only interested in 1 company - his own - it is ESL Investments - to be in this "CLUB", you must have a minimum $5 MIL to invest - you cannot touch that investment for 5 years without heavy fine or penalty - his company reaps an incredible average yearly return of about 30% for his investors - if you have the ability to research or investigate what companies he has had his fingers in over the past 15+ years, you might be surprised how those companies faired - you might find that the vast of shareholder return went to his own investors of ESL - be careful who you suggest to the board - you will find that all of a sudden, executives and board members start dropping off - but with an extraordinary unexplainable PLATINUM parachute for their bad performance - or in some cases, NO performance
Please visit the following forum - you will find good resources and you may find a few more supporters of your shareholder activism:
http://www.retail-w orker.com/forum/viewforum.php?f=2
Respectfully
MrsDD
One of the worst things that happened for MOT was the spin off of Freescale. MOT strength was in semiconductors - it was one of the company's pillars. Now I agree with one of the other pledgerees that MOBILE unit shall be separated from the rest of the company OR it shall release about 5 times less models in a certain period of time than does now, and FOCUS engineers and marketers efforts on designing really, really the BEST products. So that when the users review would later pop up on the internet they would all be close to "10 out of 10". I remember when I asked two questions at one of the internal MOT mobile phones presentations about poor features of the particular model that was YET to be released to the market, I was given a typical "funny" answer to amuse the rest of audience and nothing else has happened ! They were too proud to take the creative criticism.
People use electronics products and do not know how things are designed inside - if they knew they would think twice before buying. I have seen a lot of code written by and for MOT - some were just a miracle that they worked at all !
Motorola needs desperately to follow the model of GE and 3M who let their business managers make business decisions rather than having one person make them for all the businesses (central control).
Each business should stand or fall on it's own merits, not get propped up by another profitable business unit.
Applying the same organizational theory to all businesses has proven to be a loser for everyone from employee's to shareholders. Each business should be allowed to define how they need to be organized to best serve their markets. Let the manager's manage and hold them accountable for their performance.
And, stop the organizational merry-go-round just to create the illusion of progress.
I'd like to see another item in the plan b proposal. One of the news stories says that Zander will get somewhere in the neighborhood of $30-$50 million when he leaves as part of his golden parachute.
It's too late to do anything about that, but now is the time to get the board's attention that the next CEO Mot hires shouldn't have such a ridiculously huge golden parachute. They need to find a way to tie it to performance. If the person does well and leaves then by all means reward him/her. But if the company doesn't do well and the he/she leaves there shouldn't be a big payday for leaving.
Unfortunately, sickly high "separation" packages for CEOs etc are almost a norm in corporate world. Arrangement like that are actually detrimental to the company, i.e. to have a nice "handshake check" if one does not perform. Because no matter if Mr. CEO performs or not - he will ALWAYS get paid. So this is just a nice disguise for a hefty WELFARE payments coming from company pocket. One does his job or not - does not matter - will get paid huge amount of money anyway.
BTW: what I do not understand is where do people get estimates like this one from (i.e. that true value of MOT is around $27) : http://www.gurufocus.co m/StockBuy.php?symbol=MOT
As a former employee in the Semiconductor Sector I, early on, discovered that Motorola appeared to be playing "follow the leader" rather than planning to BE the leader. This was most apparent when the Power PC processors were being developed. After seeing a succession of "leaders" come and go it is not surprising that Motorola is in the current predicament it is in. I have "suffered" with the rest of the Motorola shareholders to the tune of $50K+ loss in my share worth. There has to be accountability at the top or there will never be any incentive to lead the company to profitability. Salaries tied to performance...poor performance results in loss of bonuses, etc. Afterall, us "lower-echelon" employees get our raises by performing......right?
I too am waiting for some "real" leadership for Motorola. BOOT ZANDER NOW!!!!
