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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). |
 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). |
 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. |
 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. |
 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). |
 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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