Linked by Thom Holwerda on Wed 27th Aug 2014 22:56 UTC
In the News

Getting outflanked by tech upstarts, hacked in two by a fearsome corporate raider, and finally taken over in part by a Chinese company that exists largely because of the world Motorola made for it: Such a fate would have been unthinkable 20 years ago. Motorola was then one of America's greatest companies, having racked up a stunning record of innovation that continually spawned new businesses, which in turn created enormous wealth. Motorola had the vision to invest in China long before most multinational companies. It even developed Six Sigma, a rigorous process for improving quality that would be embraced by management gurus and change the way companies nearly everywhere operate.

However, as the history of many giant corporations (Lehman Brothers, General Motors) shows, great success can lead to great trouble. Interviews with key players in and around Motorola and its spinoffs indicate that the problems began when management jettisoned a powerful corporate culture that had been inculcated over decades. When healthy internal competition degenerated into damaging infighting. "I loved most of my time there," says Mike DiNanno, a former controller of several Motorola divisions, who worked at the company from 1984 to 2003. "But I hated the last few years."

Very detailed in-depth look at the rise and fall of Motorola.

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Comment by tumdum
by tumdum on Thu 28th Aug 2014 03:57 UTC
tumdum
Member since:
2009-01-31

Not very detailed, no word about acquisition by NSN: http://nsn.com/news-events/press-room/press-releases/nokia-siemens-...

Reply Score: 2

I worked there then
by Lorin on Thu 28th Aug 2014 05:05 UTC
Lorin
Member since:
2010-04-06

I was at Motorola from 1995 to 2001, the culture was unique and things did get done. The founder and his son stuck with the standards they created and Motorola was a success, then came Grandson Chris Galvin who had none of the respect for the values the company grew with, Motorola essentially became a Yugoslavia, a nation built with warring states and villages, and no one able to govern it as a whole.

This decline, once it started was impossible to stop, those of us who were there during the good times feel a great sadness for what Motorola has become.

Reply Score: 8

RE: I worked there then
by protomank on Thu 28th Aug 2014 11:21 UTC in reply to "I worked there then"
protomank Member since:
2006-08-03

There is a saying in Brazil that states: "pai rico, filho nobre, neto pobre" (rich father, noble son, poor grandson) that seems to be a good fit for this case.

Reply Score: 5

RE[2]: I worked there then
by jgagnon on Thu 28th Aug 2014 13:18 UTC in reply to "RE: I worked there then"
jgagnon Member since:
2008-06-24

Most family owned businesses do not survive to the third generation (at least in the US). One likely exception to this rule is farming, but in general it stands true based on all the research I've done.

On a personal note, I work for a company in its second generation of leadership and it is most certainly declining. The boss' sons are gearing up to join the company in under 10 years and I'm sure it will flounder and fail not long after (if it survives that long). Passion is not something you inherit or learn. You either have it or you don't.

In my mind it all comes down to money. The first generation works hard to get it, taking every opportunity as it comes. The second generation still remembers growing up without money so they work hard to keep it. The third generation has always had money and tends not to think about where it came from or how much work it took to get/keep it. It all goes south from there, so to speak.

As an aside, if you're looking for a good read (or listen if you're into audio books) on the subject of how different one generation can be from another, check out Earth Abides by George Stewart. It's fiction and was written before computers had much of a hold on the modern world (1949).

Reply Score: 4

RE[3]: I worked there then
by kwan_e on Thu 28th Aug 2014 16:06 UTC in reply to "RE[2]: I worked there then"
kwan_e Member since:
2007-02-18

I don't think that's it. I think it's simply a case of people being handed the top position and they don't understand the company they are working in. They think they can see everything just from the numbers in a balance sheet, but they don't understand the organism as a whole.

Reply Score: 5

RE[3]: I worked there then
by tylerdurden on Thu 28th Aug 2014 17:25 UTC in reply to "RE[2]: I worked there then"
tylerdurden Member since:
2009-03-17

Most family owned businesses do not survive to the third generation (at least in the US). One likely exception to this rule is farming, but in general it stands true based on all the research I've done.


Well, since you have done all that research care to share with us the citations backing up the numeric claims you just made?

Reply Score: 2

RE[4]: I worked there then
by jgagnon on Thu 28th Aug 2014 17:49 UTC in reply to "RE[3]: I worked there then"
jgagnon Member since:
2008-06-24

Average lifespan 24 years (it's tough to get 3 generations in 24 years outside of Alabama): http://www.businessbewareshow.com/2012/02/20/family-business/

This one states that only a third of family businesses make the transition to the second generation. The third is at least as bad, obviously. http://www.gaebler.com/Family-Business-Statistics.htm

This one states that only 12% of them survive to the third generation: http://www.familybusinesscenter.com/resources/family-business-facts...

Shall I continue?

Reply Score: 6

RE[5]: I worked there then
by tylerdurden on Fri 29th Aug 2014 07:46 UTC in reply to "RE[4]: I worked there then"
tylerdurden Member since:
2009-03-17

Interesting, thanks.

Those statistics are rather inconclusive outside of the context of business longevity, though.

E.g. mom&pop's little HW store may not be a very attractive proposition for their son who just graduated top of his Law class and got a job with some high power attorney firm. In that case, the inter-generational wealth, for that family, rose even though the "family business" ended up closing. (I made up a ridiculous scenario to illustrate the point.)

Reply Score: 4

RE[3]: I worked there then
by TemporalBeing on Thu 28th Aug 2014 18:06 UTC in reply to "RE[2]: I worked there then"
TemporalBeing Member since:
2007-08-22

Most family owned businesses do not survive to the third generation (at least in the US). One likely exception to this rule is farming, but in general it stands true based on all the research I've done.


Bull. Might be true for a the few big companies that you can case-study over it, but realize - the vast majority of companies are small-to-medium businesses (SMBs); the great majority of which are family owned, and usually passed down.

The greater issue is whether the incoming generation wants to continue the culture, sell it off, etc. Unfortunately too many MBA programs (which is nearly required for positions in Medium or larger sized companies at the officer levels) teach a very short-sighted outlook of the company so the folks don't really now how to play the long-game any more, and as a result failures happen more quickly. That is probably more of what you are seeing than anything else.

But, as another said, show us some data.

Reply Score: 1

RE[4]: I worked there then
by jgagnon on Thu 28th Aug 2014 18:09 UTC in reply to "RE[3]: I worked there then"
jgagnon Member since:
2008-06-24

Please see my previous reply for some examples. Or search for "family owned business statistics" for a mess of your own to review. I'm not making this stuff up.

Reply Score: 4

RE[4]: I worked there then
by unclefester on Fri 29th Aug 2014 11:23 UTC in reply to "RE[3]: I worked there then"
unclefester Member since:
2007-01-13

Unfortunately too many MBA programs (which is nearly required for positions in Medium or larger sized companies at the officer levels) teach a very short-sighted outlook of the company so the folks don't really now how to play the long-game any more, and as a result failures happen more quickly. That is probably more of what you are seeing than anything else.


That is very much an American situation. In Australia most companies value experience far more than academic qualifications (some major companies still have a CEO that have never attended university). Most Australian MBA graduates are middle/senior managers who already have 10-20 years executive experience. An MBA without extensive work experience is generally considered to be worthless here.

Edited 2014-08-29 11:29 UTC

Reply Score: 4

RE[5]: I worked there then
by TemporalBeing on Fri 29th Aug 2014 13:26 UTC in reply to "RE[4]: I worked there then"
TemporalBeing Member since:
2007-08-22

"Unfortunately too many MBA programs (which is nearly required for positions in Medium or larger sized companies at the officer levels) teach a very short-sighted outlook of the company so the folks don't really now how to play the long-game any more, and as a result failures happen more quickly. That is probably more of what you are seeing than anything else.


That is very much an American situation. In Australia most companies value experience far more than academic qualifications (some major companies still have a CEO that have never attended university). Most Australian MBA graduates are middle/senior managers who already have 10-20 years executive experience. An MBA without extensive work experience is generally considered to be worthless here.
"

It's a sad remnant of the Baby Boomer generation where they upped the requirements for positions in order to limit folks applying, and it has not been for the better.

Essentially, many positions require a college degree of some sort even if it doesn't make sense to have one. And other times, you may have all the required training and knowledge, but because you don't have the degree they won't give you the position any way.

My grandfather saw the issues in the accounting field way back. They started requiring college degrees and he found the graduates couldn't do the work and got management to drop the requirement (at least at that time; it's probably changed again).

Many HR depts will do the same thing - if you don't have the MBA there's only so high they will let you go due to dumb policies.

However, while the MBA training doesn't help anything, the issue I'm referring to is primarily driven by an political/legal/economic climate that puts the stock holders first, so companies (wrongly) believe they have to pursue an increasing stock price all the time, even to the detriment of the company. The MBA argument is that an increasing stock price means a healthy company; the problem is that it leaves the company without any long term plans or ability to pursue long term plans.

Reply Score: 4

RE[2]: I worked there then
by puenktchen on Fri 29th Aug 2014 09:01 UTC in reply to "RE: I worked there then"
puenktchen Member since:
2007-07-27

There is a similar saying in german: The first generation creates wealth, the second generation preserves it and the third generation squanders it. Or in a version contributed to Bismark: the third generation studies history of arts and the fourth generation degenerate completely.

Thomas Mann's "Buddenbrooks" tells the same story.

But I don't think that there is a scientific base for it. ;)

Reply Score: 3

RE[3]: I worked there then
by protomank on Fri 29th Aug 2014 09:58 UTC in reply to "RE[2]: I worked there then"
protomank Member since:
2006-08-03

How is it written in german?

Reply Score: 2

RE[4]: I worked there then
by puenktchen on Fri 29th Aug 2014 13:11 UTC in reply to "RE[3]: I worked there then"
puenktchen Member since:
2007-07-27

In Bismarck's words: "Die erste Generation schafft Vermögen, die zweite verwaltet Vermögen, die dritte studiert Kunstgeschichte, und die vierte verkommt vollends."

Reply Score: 3

A shame they didn't mention freescale
by jockm on Thu 28th Aug 2014 05:07 UTC
jockm
Member since:
2012-12-22

Until 2004 Motorola also manufactured integrated circuits. Despite the fact that their lovely graph goes back to 1984, and mentions the split of Motorola Mobility and Motorola Solutions, it is a shame they didn't mention Freescale — the IC division.

Oh and ON Semiconductor which spun out of Motorola in 1999...

Edited 2014-08-28 05:09 UTC

Reply Score: 3

hobgoblin Member since:
2005-07-06

I can't say for sure, but it seems to me that Freescale is struggling to stay relevant.

Reply Score: 3

jockm Member since:
2012-12-22

I am not so sure of that, but I haven't seen any 2013/2014 numbers yet. But even still they and ON are relevant to the story of Motorola in that article. It shows a trend that started before the narrative in that story

Reply Score: 3

Bill Shooter of Bul Member since:
2006-07-14

I think they're doing ok. They, like Texas Instruments, are staying out of the Cell phone business and focusing on other embedded areas.

Reply Score: 3

and yet...
by hobgoblin on Thu 28th Aug 2014 10:04 UTC
hobgoblin
Member since:
2005-07-06

Mororola consumer phones were fashion over function from a European standpoint. The firmware on the Razr models were downright crap.

They seemed to be getting it with the Z8 and Z10, but then largely pulled out of Non-American markets.

Reply Score: 5