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 A CEO’s Perspective - Making Innovation Work Chris Galvin

Co-Founder and Chariman, Harrison Street, Former Chairman and CEO, Motorola, Inc.

Praveen Gupta, the Editor of International Journal of Innovation Science, had an opportunity to

interview Chris Galvin for his views on innovation at his new company Harrison Street Capital in

Chicago, IL. We would like to thank Mr. Galvin and his staff for the interview in support of the journal

and making innovation more pervasive, predictable, and profitable.

PG: How does it feel to give up a jewel like Motorola, an innovative company, and how much do you

miss technology aspects of your job?

CG: Allow me to answer in some detail, connecting the dots between the importance of high

innovation, or lack thereof, and financial results.

During 2001-2003, it wasn’t easy to lead Motorola's painful restructuring worldwide, butsimultaneously, it was a delight for me to lead innovation in my role as CEO, partnering closely

with a spectacularly imaginative team of Motorola innovators then. We created the vast array of 

Motorola’s new products that sold so well and gained market share in 2004-2006, including the

RAZR, which was completed in 2003. Global technology buyers purchase greater quantities and

pay much higher prices for breakthrough innovation in new products. The RAZR and the GSM

V series phones became two of the top five mobile phone sellers ever at $150-$200 or higher

price point. High innovation pays off. Just like Apple Inc. produces terrific financial results today,

Motorola, back then, doubled Mobile Devices sales from $11 billion to $28 billion, gained 8%

global market share to 22%, and more than quintupled earnings, from $500 million to $2.7 billion

from 2003 to 2006.

The undercurrent of your question is… I did not "give up" Motorola, Motorola’s Board of 

Directors chose proactively to extinguish the Galvin CEO leadership of innovation at Motorolaafter 75 years.

What resulted?

Each product’s lifecycle is approximately three years in mobile phones, so products created

during the 2001-2003 timeframe would naturally begin to run out of gas by late 2006.

Unfortunately the new senior leadership team failed in 2004-2006 to create the pipeline of 

exciting products to sell in 2007-2009. Motorola’s financial results declined accordingly.

Motorola’s Mobile Devices has now declined to a $7 billion business in 2009, shrunk to 3.7%

global market share and the business has lost billions of dollars since 2007.

Regrettably as of the end of 2009, Motorola Inc. has now shrunk to half its $43B size in 2006,

and suffered profitless performance over the last three consecutive years. Failure to innovate has

painful consequences in financial performance, negatively impacting shareholders and UScompetitiveness.

Today Motorola Inc.'s share price is 20%-25% below what it was when the Board announced I

should no longer lead Motorola’s future innovation. It’s 70% below the company's share price at

the peak of the RAZR innovation boom.

The years 2000-2009 were the first decade in 80 years when Motorola didn’t create a new

industry unlike the creation of the Public Safety Communications Industry (1930’s), the Cellular

Telephony Industry (1970-1980’s), and the Cable Broadband Industry (1990’s).

Now Motorola’s Board of Directors has decided to split the company, taking away the advantages

of global scale, diversified technology business portfolio and multi-faceted and broad technology

core competences.

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International Journal of 

Innovation Sciencehttp://InnovationScience.org

Editor-in-Chief: Brett E. Trusko, PhD

Mount Sinai School of Medicine, New York, NY, USA

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Work phone - 212-824-7639

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About the Journal

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