Problems at Motorola

This commentary is interesting because it recommends Motorola hire an outside CEO. To do this, I think, is a sign of a poorly run company. Hiring an outside CEO means that the company has not done a good job of developing leaders in-house. Sometimes it is necessary though, because everyone within the company thinks a certain way, and a fresh perspective is needed to get them out of a rut.

Motorola would do better to bring in an outsider. It needs someone immediately capable of cutting through the company's notoriously intractable bureaucracy and hidebound engineering culture. Motorola is famous for hanging on to technologies such as analog and satellite phones long after the market rejects them.

It needs a leader like Edward D. Breen Jr., the former COO it lost to Tyco International (TYC ) in 2002 after just a few months on the job. Breen impressed many by killing unpromising cable-modem technology and urging the sale of the wireless-infrastructure unit. "My issue with Motorola has always been the glacial pace of how they run their businesses," says Kevin M. Rendino, a fund manager at Merrill Lynch & Co., which owns 9.7 million Motorola shares.

GET TOUGH. The company also needs a leader with a proven record for divining key tech trends. With wireless growth slowing and phones fast becoming a commodity business, Motorola's next chief needs to understand how to catapult into such promising areas as gaming and PC-like smart phones. That's where a Silicon Valley exec could help — someone who knows how to develop technology that matches what customers want.

That has been a perennial problem at Motorola, which has failed to customize cell phones for key carriers such as Sprint (FON ). The new CEO ideally would have experience in both marketing and technology — one reason investors say Edward J. Zander, former CEO of Sun Microsystems (SUNW ), would be a good fit.

Above all, the next chief will need to be tough. He or she will have to decide what to outsource and what to keep in-house, as well as what to jettison. While its walkie-talkie technology is a keeper, axing the rest of the infrastructure biz looks like a no-brainer. Figuring out what to do with semiconductors won't be so easy, since wireless chips are part of the company's heritage.

That's precisely why an outsider would be best: Motorola needs someone willing to slay a few sacred cows. The company's success may depend on it.

It will be interesting to see who they pick.

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