Focus or Die: Case Study of Motorola

by Victor Cheng

In the keynote speeches I give, one of the themes I emphasize is how important it is to FOCUS on the key opportunities in your business.

Hands down, I find most companies spread their resources, staff, and executive attention on too many projects.

This is especially true if you’re in a turnaround situation.

So what’s the big lesson?

Cut your list of major projects in half (or more), Double the staffing on what remains

A perfect example of a company pulling this off successfully is Motorola.  You’ll recall that a few years ago Motorola was the clear market leader in cell phones.

As the smartphone segment of the market grew (think: iPhones, Crackberry), Motorola got left behind.  They started losing money.

In 2009, Motorla didn’t sell any smartphones.

The company’s CEO realized that they need a major R&D effort to field a competitive product.

The problem was the company had their R&D efforts spread way too thin – they had phones running on 6 operating systems, and had a total of 23 platforms (I’m assuming these are product lines).

By comparison, Apple only supports 1 operating system and a single platform. Blackberry does the same.

Motorola’s CEO realized there was no way that Motorola could beat or even match Apple and Blackberry across 23 different platforms.

This conclusion is what I term recognizing you are in a fight you can’t win under the current approach.

So he decided to focus on just 1 operating system – the Android operating system created by Google.

In this way, he could focus his R&D team on building a phone around someone else’s operating system and Google stood a better chance of winning the mobile phone operating system wars than Motorla.

So that freed up a ton of R&D resources.

Next he scrapped the majority of the company’s 23 platforms, and focused on creating a single smartphone platform.

The combination of these two moves dramatically increased the size of the R&D team around a very focus platform.

In Q1 2010, the Motorla shipped 2.3 million smart phones, was profitable and is off to a great start this year.

Their flagship product “Droid” has been well received and they’re on pace to sell 12 million smartphones in 2010 (a marked improvement over essential zero sales in 2009).

So here’s my thought for the day:

Are your company’s resources spread too thin?

The companies that thrive are NOT the ones that try to do too much. They are the ones the do very few things, in many cases only 1 thing, extremely well.

Focus or Die. It’s as simple as that.

On a personal note, I’m in Chicago today giving two speeches on how companies can beat the recession and am off to Hilton Head, South Carolina to do the same for an association in the building services industry.

I don’t normally travel much in my work, but have done a fair amount in the past 12 months. It has been very eye opening to see how companies across the US are finding their way in this recession/recovery (depending on who you believe).

From Seattle to Milwaukee, Chicago to Ft Lauderdale, Plano to San Diego, in every city there are companies that are doing well despite the economic environment.

One of the common threads amongst those prospering is a pretty intense focus on selling the right product/service for the times. And given that times have changed quite a bit in the last 2 years, it’s not surprising its working.

Comments

{ 5 comments… read them below or add one }

Josh May 19, 2010 at 11:28 AM

Excellent point! My biggest fight with clients (and my own projects) is to have laser focus on the 1 or 2 highest leverage activities and stop wasting time, money and energy on anything else.

My theory is that most people that work in small businesses get bored from the redundancy of focusing on one project or deliverable and sabotage themselves with their need for new stuff to start and mess with.

Apple and RIM and now Motorola are all great examples to model after. Thanks for the timely wisdom!
-Josh

Gerald Guard May 19, 2010 at 1:31 PM

They – The companies – have to zero in on the correct product that is demand, in the first place, in these tough times.

Good article. Victor.

Thanks.

Jerry Thornton May 19, 2010 at 3:10 PM

Less is more – what a concept!! I often think I need to do more when maybe it’s doing less that will make us better.
Thank you for the insights!!
Jerry

Victor Cheng May 19, 2010 at 3:30 PM

Thanks for everyone’s comments. My motivation for writing the article is I’ve been seeing what a struggle it is has been for several of my clients to stick to just one thing.

This is especially important in this particular economy where the capital markets are unusually restrictive. It’s hard to get credit to expand. It’s hard to raise money from equity investors.

In short, companies from $100k in sales to $300 million in sales are forced to make do with whatever pre-existing resources they have on hand.

Pick and choose. Tradeoff decisions. It’s probably the #1 job of a CEO – deciding what’s important enough to focus on doing (and to stop doing everything else).

Philip Chin July 22, 2010 at 3:52 AM

Thanks Victor. News for you, Motorola has once again started screwing their customers by saying they are still undecided if they would provide the latest Android 2.2 upgrade to their 7 months old flag ship smartphone, the Motorola Milestone in Europe. However, the US version of the same phone is getting the upgrade. Customers from Europe and Asia are demanding refund for their smartphone and many already so put off that some have declared they will not buy another Motorola phone again. It is speculated that Motorola is undecided on the upgrade because they are trying to protect their new smartphone soon to be launched in August 2010. Is this a strategic move to protect their short term sales target over long term customer satisfaction? Will it work or a suicidal move? Only time will tell.

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