How the Razr (almost) saved Motorola
Ed Zander is stepping down as CEO of Motorola. The stellar hit of the Razr was not able to be translated to continued growth for the company.
Ed Zander is stepping down as CEO at Motorola, having overseen a boom time and a gradual decline. While there are probably many inter-twined reasons for Motorola's lack of performance after it hit the big time with the Razr, many will point to the lack of innovation following on the back of that spectacularly successful phone.
To his credit he was able to spot the potential of the Razr while it was still in development, and encouraged getting it to market rapidly. He recognized that it was just what Motorola needed to re-energize its image outside the company (which had lacked a hit consumer product since the Star Tac some ten years earlier), as well as to revitalize innovation inside Motorola itself. Time has shown that it was more successful at the former than changing the latter.
There are no facts about certain things that are really, really important -- new design directions, new "experience design" directions and new kinds of experiences that can create new businesses. At the end of the day, we have to assemble the best clues and inferences we can, and the best set of facts on what's gone before, and make the leaps -- to make the best -- on the new things.
That's one of the great things about Ed Zander. When Ed joined Motorola, we were already working on Razr and we kind of knew we had a great product. He took one look at it and said, "How many can you make?"
While the success of the Razr seems obvious in hindsight, it was far from a sure thing beforehand. At $499 when it first came out, it was twice the price of previous phones. Frost noted:
There's a big lesson [here] about the limits of traditional research. Our traditional research told us there was a total available world market of about two million units for a $499 phone; we sold over two million units in the UK alone. So, the real lesson is, the best way to predict the future, as Peter Drucker once said, is to create it."
He then comes out with this:
The best way to predict the total available market for a new thing is to invent it.
This is a profound statement, but also one that is scary to many middle managers afraid of risk-taking based on partial information, or who want to use information about the past to predict the future.
(I highly recommend this article about the development process by which the Razr came to be, there are many lessons in it.)
Unfortunately, it seems that this attitude prevailed at Motorola, and that the magic moment of the Razr was not able to create a broader shift at the company, to create a more innovation-focused and risk-tolerant culture. The later generation Razrs lacked the innovative spark, and did not recognize that the competition had caught up and that fickle consumers' expectations had moved on. (And let us not speak of the Rokr travesty.) Zander and his team were not able to capture the momentum and convert it into continued growth.