Table: Grading Galvin
In his four years as CEO, Galvin has found success elusive. Save for a few months in early 2000, when Motorola's stock soared amid a seeming turnaround, his reign has been characterized by more missteps than accomplishments. Here's an assessment of his performance:
Galvin is more philosopher than operations chief. He relishes studying technology and economic trends. He defined Motorola's (MOT ) current mission: to tailor the wireless Internet for the person, the work team, the home, and the car. And he is the chief proponent of Motorola's research into biotech, a budding industry that Galvin suggests could produce Motorola's next great innovation.
Galvin has taken months to make key decisions. For example, he let the ill-fated Iridium satellite network proceed for almost a year after his lieutenants warned him it was troubled. He's also struggled to find the right corporate organization, with three restructurings in four years. After costs spun out of control, he decided to cut 26,000 jobs and sell businesses to rein in expenses.
Motorola has repeatedly misread what buyers want. In 1999 and 2000, Galvin's troops insisted on making expensive phones when buyers wanted stylish, sub-$100 phones. Motorola's share of the mobile-phone market has dropped from 26% in 1996 to 13% today. Galvin and Motorola listen better now: Galvin spends more than 30% of his time visiting customers.
Motorola has a strong legacy of innovation. It designed the first portable two-way radio, and was a pioneer in TVs and car radios. Yet Motorola hasn't had a breakthrough product since the StarTAC, the clamshell mobile phone
introduced in 1996. His biggest innovation is an Internet phone that will transmit data as fast as standard PC modems.
Motorola's stockholders have fared badly. Since the beginning of 1997 when Galvin became CEO, shareholders have lost 16% of their money. Over the same period, the Standard & Poor's 500 rose 76%. Nokia (NOK ) and Qualcomm (QCOM ), leaders in wireless, have given stockholders returns of 544% and 1,100%, respectively. Since May, 2000, Motorola's stock is off 72%, to $16.75.