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It takes Motorola inc. employee about 30 seconds after they meet Edward Zander to realize how
different their new boss is from their last one. When Zander¶s predecessor, Christoper B. Galvin,
was reserved, polite, and gentle, Zander is a bash brooklynite, incessantly pumping hands and
flashing his trademark mile-wide smile.

But in march, three months after taking over the chief executive post, zander showed he also
was going to be much more demanding.He gathered his top 20 executives in the company¶s
downtown Chicago offices, some 30 miles from the Schaumburg, 3, head quarter,for a two day
brainstorming session on how to improve motorola¶s lackluster execution.His
message:Employee will be accountable for customer satisfaction,product quality,and even
collaboration among business units.´if you don¶t cooperate and work together, I will kill you ³he
said.Today, Zander laughs:´That¶s surviving and growing up in Brooklyn talk.It was my way of
saying,¶we¶re going to fix this thing´

Zander is about as affable as CEOs come ,but he¶s deadly serious about restoring Motorola to
the top of the communications world.The tech veteran,who spent 15 years at computer giant
sun Microsystems inc.(SUNW)and eventually became its president,is trying to reinvent Motorola
as a nimble,unified technology company.His most dramatic effort to date is a plan to dismantle
motorola¶s debilitating bureaucracy and end a culture of internecine rivalries so intense that
motorola¶s own employee have referred to its business units as ³warring tribes´.And he¶s not
leaving it to change:He has made cooperation a key factor in determining raises and
bonuses.´It¶s a damn different place,´says Patrick J. Canavan, a 24 year veteran and motorola¶s
director for global governance.´ everyone is looking out for everyone else´.

The changes are just beginning. BUSINESS Week has learned that Zander has been exploring a
major reorganizing, and the first steps of the restructuring may be unveiled at an investor
conference in Chicago on July 27.By October, Zander hopes to abandon Motorola¶s stovepipe
divisions, which are focused on products like mobile phones and broadband gear, and
reorganized operations around customer markets-one for the digital home, for example and
another for corporate buyers.
The reorganization will help Zander deliver on a several new initiatives. Perhaps the most
important is what the chief executive calls ³seamless mobility´.The idea is that Motorola should
make it for consumers to transport any digital information-music, video, e-mail, phone calls-from
the house to the car to the workplace. Mastering that technology would do more than boost cell
phone sales.It also could make Motorola a key player in the digital home,helping it sell flat panel
tvs and broadband modems home wireless networks and gateway to manage digital
content.Seperately,Business week has learned that Motorola is planning a major push to sell
more services to corporations. While Motorola sells communications gear to corporate
customers now, zander sees an important growth oppourtunity in managing networks for those
companies.´We have to get more focused on that, ³said Zander in an interview with business
week.

So far Motorola is performing impressively under its new chief executive. On July 20 the
company reported that second-quarter sales surged 41%, to $8.7 billion, while operating income
rose five fold,to $ 845 million.The primary driver was the mobile phone division,which boosted
revenues 67%to $3.9billion.Still ,investor are looking for Motorola to get its profitalbility up to the
level of its rivals. Despite Nokia corp. (NOK)¶s recent trouble, the operating margins in its
mobile-phone business are 19%compared with 10% for Motorola.´Margins are still sub-par,
says Barbara L.Rishel, a Senior Portfolio Manager for MT Investment advisors, a large Motorola
share holder.

No dissagrement from zander.Although he¶s unlikely to announce it on July 27, Zander is


planning to trim costs in coming months by shedding employees, according to insiders and
analysts.He¶s also plotting management changes that will bring in more handpicked people to
help execute his plans. On July 20, Motorola said the head of its mobile phone division, Tom
Lynch, would leave the company at the end of the summer.Zander declined to discuss any
details of cost cutting or executive changes.

But investors that want zander to jettison poorly performing business may be disappointed.The
ceo proceeded with the spinoff of Motorola¶s semiconductor unit that had been put in motion
before he arrived ±the deal took place on July 16, despite upheaval in the chips market.Still,
insider say he¶s impressed with the remaining portfolio of businesses, including the 4.4 billion
wireless infrastructure business that some analysts have suggested that Motorola dump.

Instead ,Zander is focused on reducing the number of separate businesss.Analysts say he is


working on a plan that could combine te wireless network unit with the company¶s broadband
division.By collapsing two units that make equipment to route data through networks,moorola
could cut expenses and smooth execution. Zander decline to comment on any potential
reorganisatiom.

Just as important as the structural changes will be the strategy that goes with it.The concept of
seamless mobility was born on a flight to France in February when Zander and his chief
technology officer,Padmasree Warrior, were headed to a wireless industry conference.the
strategy has been refined over the past few months until senior leaders from motorola¶s
business units gathered last month at Motorola university ,adjacent to headquarters to
discussed strategies for internal development and potential acquisition.

Motorola vision starts with users sitting at home watching, say, the New York Times battling the
Chicago White Sox. To leave home, they pause video, transfer it to their phone, walk into the
garage and transfer the video to the car as they drive .The car would switch to audio so as not
to distract the driver and then then switch back to video mode if the driver stops at the traffic
light. Motorola has the technology portfolio to pursue the entire scenario.Besides phone and
cable set-top boxes, it has $ 2.3billion automotive electronics business that develops technology
for car to communicates with outside networks.

The key will be beating rivals to market with innovation solutions .That¶s why Zander top priority
has been improving execution.The main driver is a new incentive plan.In the past, workers were
compensated based on the revenue, profit, and cash generated in their particular sector.If one
sector did well, its employees pulled in huge bonuses.A unit that didn¶t perform go little or
nothing.

Zander has been relentless in trying to get the most out of his staff. A new bonus plan bases
25% on three key areas: customer satisfaction, product reliability, and cost of poor quality.When
the heads of each business unit first laid out their target, Zander¶s no-nonsense roots
showed:´you¶re sandbagging, ³he barked. Before long, the targets were more difficult.´ we¶re
driving for improvement year over year,´ says Michael j. Fenger, a Vet Zander picked to improve
corporate quality.