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Bob Galvin (on the left) was named president
of Motorola in 1956 and succeeded his father, Paul Galvin
(on the right), as the chief executive officer
in 1958. The company began life with Paul Galvin’s
development of a battery eliminator in 1928 followed by the
development of an automobile radio in 1929. The battery eliminator
had a very short life while the automobile radio became a
profitable product for decades.
Motorola subsequently expanded into two-way radio communications
(e.g. police communications, military communications). Next
came the company’s entry into the
production of television receiving sets and semiconductors.
Motorola was prominent in all of those markets when Bob Galvin
followed his father as CEO.
In addition to formal management training Bob Galvin learned
the business by working in lower level jobs and by receiving
mentoring from older employees. Among his most important mentors
was Paul Galvin. And among the most important ideas passed
on from father to son were Paul Galvin’s two favorite sayings
about building and maintaining an entrepreneurial culture.
First, there was the saying that encouraged the entrepreneurial
act – “ Do not fear failure!” In other words, entrepreneurs take risks and
risk takers will inevitably experience some failures. Fear
of failure can prevent a potential entrepreneur from taking
risks. Second, there was the saying that kept those risks
manageable – “Recognize the signs!” In other words, recognize the possibility of
failure and move quickly to cut losses once it is clear that
a new project will not become profitable. When Paul Galvin
died in 1958 these two admonitions were part of the philosophy which he left behind. |
| In 1986 Bob Galvin gave up the title of CEO while remaining
chairman of the board. Between 1958 and 1987 sales had grown
from $ 216.6 million to $ 6.7 billion and cash flow per share
had grown from 89 cents to $6.10. Five years later Bob Galvin published The Idea of Ideas (Motorola University Press, 1991). There he presented
a variety of ideas which influenced his ability to lead Motorola
through more than three decades of successful growth and renewal.
His father’s legacy figured prominently in his writing.
Perhaps the most telling insight in that regard is this statement, “ …(M)y father treated me
to the most demanding discipline. He trusted me!” (p.6).
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During his almost 30 year tenure as CEO Bob Galvin
led Motorola through numerous renewal experiences. One was
the transition from management by a founding entrepreneur
to management by professionals who still retained some semblance
of the entrepreneurial spirit. A second was the transformation
of Motorola from a company which emphasized
both consumer and industrial markets to one which focused
on industrial customers. A third was to effectively respond
to the Japanese challenges in the areas of quality management
and business strategy. His was not a one-man show. Instead,
Bob Galvin maintained an egalitarian culture in which managers
at all levels were encouraged to develop a sense of proprietorship and a willingness to engage
in open discussion. |
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The history of Motorola’s color television business illustrates
Bob Galvin’s application of his father’s lessons on risk taking.
The father had introduced a color television receiver in 1955
and then quickly withdrew it when he recognized the signs
that it was too early to make a profit with that product.
Bob waited until a profitable opportunity appeared in 1961
and reintroduced a color television receiver. The venture
was profitable. But in the mid-1960s Bob began to closely
study the Japanese consumer electronics industry and concluded
that in the long run the Japanese would have a competitive
advantage. And so Motorola developed an exit strategy and
sold the television business to a Japanese firm. The proceeds
were redeployed to Motorola’s growth products for the future. |
| Meeting the Japanese challenge in the 1980s involved
two separate issues. One was the Japanese competitors’ strategy
of using cutting prices in the American market, keeping prices
high in the Japanese market, and blocking the American competition from
competing in the Japanese home market.
Bob Galvin led American industry’s response. That response
consisted of enlisting the U.S.
government in the rewriting
of the rules of competition so as to eventually eliminate
the Japanese home country sanctuary. The other issue with
the Japanese was the fact that they had developed superior
quality management tools. Bob Galvin insisted that Motorola
would learn to match the Japanese. His leadership enabled
Motorola to launch its then famous six-sigma quality management
program. The company’s success was recognized when the U.S.
Government awarded Motorola one of the first Malcom
Baldridge awards (U.S. President
Ronald Reagan is shown here giving the award to Bob Galvin
on the right). |
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Motorola’s success in implementing its total
quality management program resulted in a flurry of good publicity.
At a time when the American press expressed doubts about America’s
ability to compete, Motorola’s success offered encouragement.
Bob Galvin, himself, became a spokesman for American hopes.
As he once put in, “ We in America can readily hold our own against excellent
Japanese companies if we invest in research and development
sufficiently and implement that research properly, if we invest
in modern production techniques and use them, if we work very
hard and very smart in our participative management processes
and, furthermore, if we have at least the same quality expectations.”
(Grover Heiman , ”Competing with the
Japanese, Nation’s Business, November,
1982, p. 47). |
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Business ethics was an important issue with Bob
Galvin. Motorola’s
corporate statement on this matter read as follows for customers,
employees, shareholders and community.
“(FOR) CUSTOMERS, (our objectives are) to serve every customer
better than our competitors with products and services of
excellent value and quality , and thereby earn continued enthusiastic trust and
support. (FOR) PEOPLE (our objectives are) to treat each employee
with dignity, as an individual; to maintain an open atmosphere
where direct communication with employees affords the opportunity
to contribute to the maximum of their potential and fosters
unity of purpose with Motorola; to provide personal opportunities
for training and development to ensure the most capable and
effective work force; to respect senior service; to compensate
fairly by salary and benefits and, where possible, incentives;
and to practice the commonly accepted policies of equal opportunity
and affirmative action. (FOR) SHAREHOLDERS, (our objective
is) to have our shareholders prosper and, therefore, make
our equity securities an attractive investment. (FOR THE)
COMMUNITY, (our objective is) to be a good corporate citizen
by contributing to the economic and social well-being of every
community and country in which we operate. The corporation
will encourage its employees to actively participate in community
affairs.” (For Which We Stand. A Statemelnt of Purpose; Objectives and Ethics. Schaumberg,
Illinois, Motorola, Inc., May, 1986. |
| Bob Galvin’s success in dealing with the Japanese business strategy of sancturary reflected his broader view that a company CEO should
play a role in writing the
rules by which firms in an industry compete. In fact, when
talking to college audiences he sometimes would refer to the
three topics of sanctuary, credentialing and writing
the rules. Sanctuary, he would say, is what the Japanese achieve
by preventing American entry into the Japanese home market.
Re-writing the rules of international
competition is what must be done in order to open up the Japanese
market. But to convince the American Congress to rewrite
the rules it is necessary for industry spokespersons to have
credibility. To have credibility one must be credentialed.
And to be credentialed an executive must have a track record
of industry expertise. One of the ways Bob Galvin credentialed
himself was to become active in industry trade association
activities. |
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Bob Galvin’s Motorola was truly an organization
of proactive empowered leaders with a sense of proprietorship.
It was an egalitarian culture which was maintained by Bob
Galvin’s constant role modeling and such techniques as addressing
everyone on a first name basis, working in shirt sleeves and
encouraging open discussion. With respect to the last point,
management guru James O’Toole approving quotes the following
comment by a Motorola manager, “ The
expectation is that you will challenge any idea. The top three
guys – Galvin, Weisz and Mitchell – disagree with each other in front of
their managers. The upshot is a healthy disrespect for the
idea that those at the top are necessarily the wisest.” (James
O’Toole, Vanguard Management, Doubleday and Company,
1985, p. 292). This emphasis on participative management
was promoted throughout the company. |
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While disagreement was considered a healthy sign at Motorola,
Bob Galvin insisted on constant respect for people and uncompromising
integrity. The hoped for result was the kind of trust that
leads to creativity and hence long run survival. Here is what
Bob Galvin says about such trust in his The Idea of Ideas, “One’s
creativity depends on interaction with others – others one
trusts – others who feel trusted. For one to be unfettered
in risking creative interaction with another, that other must
know the trust of openness, objectivity and a complementary
creative spirit.” (p.12). |
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Motorola’s Malcomb Baldridge recognition was a fitting tribute to the fruits
of Bob Galvin’s commitment to the concept of corporate renewal.
In its simplest version corporate renewal refers to the process
of changing what needs to be changed while retaining those
elements of the company’s heritage that still provide competitive
advantage or survival value. In Motorola’s case the element
of corporate heritage that retained value was founder Paul
Galvin’s entrepreneurial principles --- (1) Reach
out! Do not fear failure and (2) Recognize
the signs (and cut your losses on risky ventures that aren’t
going to be profitable). One of Bob Galvin’s most impressive
accomplishments was his success in creating corporate renewal
in a way that retained the founder’s touch. |
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Copyright
© 2001 Illinois Business Hall of Fame. All Rights Reserved.
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