Why Innovation and Complacency Don’t Mix

You've heard about the woes of BlackBerry, a mobile giant turned also-ran. It isn't the only tech giant that offers a parable on complacency. Motorola, the company that literally invented the mobile phone, now finds itself at a crossroads. It's a story with similar lessons but diverging paths.

Sometimes, history repeats itself in parallel.

In the July/August edition of Associations Now, Jeff De Cagna, FRSA, FASAE, wrote a thoughtful piece about the leadership issues bugging a once-major smartphone giant, BlackBerry. And the points the Principled Innovation principal made are well worth heeding.

“When it comes to developing business models under which associations can thrive, myopia and complacency in the face of profound societal transformation is a toxic mindset, second only to ignorance or denial,” he wrote.

With this in mind, I read a long, well-written piece about another mobile lifer that had lost its way, Motorola. In Chicago Magazine, Ted Fishman takes a good, hard look at a company that built a reputation for taking on huge challenges and finding success, only to let its corporate culture eat itself in the process.

Before Motorola invented the cellphone—quite literally, it came out of its laboratories just over four decades ago—it was a company known for its role in public-safety infrastructure, building walkie-talkies and car radios, and bringing the technologies into vogue. It had a strong track record of innovation, as well as an internal culture of competition.

That culture of warring tribes served Motorola well when it was a company with few competitors, but when the mobile revolution hit, newer companies like Nokia usurped Motorola’s strengths, and the internal warfare led to tough long-term challenges.

These days, like BlackBerry, Motorola Mobility is an also-ran in the mobile market, an Android maker whose ownership has changed hands twice in just three years. (The public-services component was split off in 2011 as Motorola Solutions.) But there’s a place where the stories diverge—and that’s where it perhaps gets the most interesting.

In other words, Motorola’s competition could see where the company’s model didn’t work—and fixed it.

A Big Leap Forward, A Bigger Leap Back

Back in 2004, Motorola had the hottest phone on the market—a device called the RAZR. It wasn’t a smartphone, but it was a lot smarter than Motorola’s earlier phones. Like the iPhone now, it became a fashion statement, a device owned by millions.

The man who spearheaded this innovation, Chris Galvin, was the grandson of Motorola founder Paul Galvin and was CEO throughout the development period. But, due to bad luck in other parts of the company, Chris Galvin was out before the phone was released—and it became a monster hit.

The success of the RAZR—with 50 million units sold by 2006, the most popular phone of the era and a major style symbol—led the company to become complacent, choosing to commoditize its biggest product and accept thin margins rather than working on new generations of innovations.

It was at this time that the story diverges most: Apple, a company fresh off the success of the iPod, went to work with the then-hot Motorola on a phone called the ROKR. At a time when the iPod could store thousands of songs at once, it was a phone that could hold just 100 songs. It was clearly more of a Motorola product than an Apple product, and Steve Jobs—who went out of his way to emphasize that Apple didn’t design the phone in the clip above—looked like he couldn’t get off the stage fast enough when announcing it.

Less than 20 minutes later, Jobs overshadowed the ROKR announcement with a music-playing device that was clearly better, the iPod Nano. Apple took the most unpleasant lessons from the ROKR experience, cut out Motorola, and worked directly with Cingular on a device called the iPhone. By 2009, Motorola had come out with the Droid, a device that, while a hit, was clearly meant to play catch-up with a former corporate partner.

In other words, Motorola’s competition could see where the company’s model didn’t work—and fixed it.

When Success Seeds Failure

The tales of Motorola and BlackBerry have a lot in common, though with some differences. Motorola Mobility, now owned by Lenovo and once owned by Google, has less of a hill to climb than BlackBerry does. BlackBerry once owned the world of business; Motorola’s mobile niche is more on the consumer side, and has been for years.

Nonetheless, their stories share a common theme: Culture, poisoned by short-term success, can do a lot to hold back long-term innovation.

Motorola had invented much of the technology used in phones now but had become so bloated by its own success that, when it needed a “next thing,” the Droid came about almost as an afterthought. And while that device played a major role in Android’s success, it ultimately wasn’t enough to keep Motorola atop the market—the company’s declining fortunes led Google to hand off the mobility business to Lenovo earlier this year.

Motorola Mobility is still with us—and probably won’t die anytime soon. It knows marketing, and it has some killer engineering chops. And its devices are even pretty cool these days.

Shaken by years of complacency, it’s taken a lot for Motorola to hold on. From inventing the basic technology that the mobile industry is built on to turning phones into status symbols, Motorola was in front of what makes our smartphones work now.

But just imagine where it could be if it had seen its victories as an opportunity to keep a hand on the throttle.


Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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