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Cultural mesh of Google and Motorola – not so fast, says Google

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A search term of “motorola google culture clash” typed into Yahoo yields 239,000 results. Do you think that a good number of people think there is going to be something interesting taking place with Google’s $12.5 billion acquisition of Motorola Mobility?

Earlier this year, Motorola split into Motorola Mobility and Motorola Solutions. Sanjay Jha is chief executive of Motorola Mobility.

From the Wall Street Journal

Mr. Jha’s cultural transformation will be put to the test with the tie-up of two companies half a continent apart, each a product of distinctly different eras. People familiar with Motorola’s inner workings say there is still a big gap from the culture at Google, a child of the Internet age that helped pioneer a free-wheeling style that values improvisation. Though Motorola delivered some hit cellphones, for example, others were slowed by a bureaucratic layer of middle management and little innovation from rank and file workers, say some current and former employees.

Some of the Motorola employees are looking forward to the Google culture. But perhaps, not so fast – from the Google perspective.

Sanjay Jha says that the Motorola culture and the Google culture will “mesh really well”.

Mr. Jha said on Monday that the two cultures will mesh “really well,” but that both companies can learn from each other. “Every culture which is successful gets a certain pride in its cultures and sometimes being challenged is a good thing,” he said.

That seems the opposite of the expectation of a Google spokesman.

Regarding cultural differences, a Google spokeswoman said: “This story is searching for a problem that does not exist. As we have said repeatedly, we intend to run the company as a separate entity.”

Ouch!

The last thing that any culture wants is to be challenged – whether it is a good thing (for who?) or not. To perhaps over simply things a bit, Google is a culture of free wheeling innovation while Motorola is a staid culture of bureaucracy; Google is a culture of meritocracy while Motorola is a culture of entitlement. Last year Google made $8.6 billion for its investors while Motorola lost $86 million for those willing to continue to hold Motorola shares. How much of this financial result is due to culture and the quality of its workforce and executive leadership?

So it’s easy to understand why Mr. Jha of Motorola Mobility would want Google to challenge the Motorola culture to be more innovative.  But it is equally clear why Google would not want Motorola to challenge the Google culture into a sense of entitlement.  So, in the end, “mesh really well” is a benefit to Motorola and a risk to Google.  It seems Google is not willing to take the risk of what is embedded in the Motorola culture.  They will keep Motorola at a safe distance – run ” as a separate entity”, according to Google.

“probably the hardest thing I’ve ever faced in my working career.”

If anyone should know about the clash of cultures it’s former Motorola CEO Ed Zander. Zander’s tenure as CEO was partly undermined by his inability to change the culture of Motorola.  Zander was ousted by the Board in 2008

Some concerns are also shared by Edward Zander, who served as Motorola’s chairman and CEO from 2004 to 2008 and called his own struggle to update the company’s culture as “probably the hardest thing I’ve ever faced in my working career.”

Mr. Zander said he made some progress, and believes Mr. Jha has made more. But the performance has been inconsistent, making Motorola seem more valuable for its patents than its business. “They are going to have to stand alone and win in the marketplace, or Google will shut them down and just focus on the patents,” he predicted

Culture as major determinants of success/failure

Corporate culture and hiring/firing practices are two of the most important determinants of corporate and organizational success and failure. This is something that Galvin family Motorola CEO Chris Galvin failed to see in his bid for redemption (read) after being fired by the Motorola Board of Directors.

“Hire more slowly and fire more quickly”

At a conference a few years ago, Tony Hsieh CEO of Zappos was asked about his experience as a 20-something founder and CEO of two companies.  One of the questions he was asked was what he would do differently. His response was, “Hire more slowly and fire more quickly”.

Mr, Hsieh put this into practice at Zappos learning from his previous experience with Link Exchange.  Prospective employees at Zappos get two interviews – one for skills and competences and another for culture fit. If they still get it wrong, new employees are offered several thousand dollars to quit if they don’t think they fit the Zappos culture after working at Zappos for the first few months.

In short, at Zappos “culture is king” and they (executive leadership) do everything (have practices in place) to protect it.

Who is running the asylum?

Every culture will try to preserve itself – but who decides what the culture will be and who benefits? This gets back to the Principal-Agency problem (read). In any corporation or organization there are always two major constituency groups – the owners (investor/stakeholders; the principals) and the employees (agents). In whose benefit does the company or organization operate? Will there always be a conflict of interest?  Who ultimately runs the show?

To “hire more slowly and fire more quickly” in a culture of meritocracy vs preserving a culture of employee entitlement yields opposing results for the two constituency groups. In the former, the investors/stakeholders win at the expense of under-performing employees. In the latter, under-performing employees win at the expense of the investors/stakeholders. In the latter, the inmates are running the asylum.

Employee’s running the asylum can only happen at the implicit consent of the corporate executive leadership team – and the buck stops with the CEO.  The head of Motorola human resources saw this flaw in Galvin and his inability to “pull the trigger” (fire) under-performing employees (“Galvin had flaws as a young C.E.O. Executives who worked with him say he stood by senior managers even after repeated screwups. “He had a hard time pulling the trigger,” says Glenn Gienko, who was Galvin’s head of human resources. “His heart got in the way.”).  Chris Galvin’s heart was with who – principals or agents?  What happens to the culture of an organization after years and decades of not getting rid of under-performing employees?

When the Motorola Board ousted Chris Galvin and brought in Ed Zander one Board member advised Zander to “gut the place”. Zander did not (nor could he). In short Zander was defeated by the Motorola culture that he was put in place by the Board to change.

The Take

So when Motorola Mobility Chief executive Sanjay Jha says that Google and Motorola culture will “mesh really well” then I can see why Google spokesman’s comment suggests hesitancy –  “we intend to run the company as a separate entity” – and perhaps wants nothing to do with a “cultural mesh” with Motorola given the long history of Motorola and it’s culture as discovered by Zander.

Google may have acquired “Motorola Mobility” – but they would be best advised to leave the Motorola culture behind focusing more on Patents and other Intellectual Property than on people and the inertia of their embedded culture (read).

Resources

http://online.wsj.com/article/SB10001424053111904253204576512761738987674.html  (cached)

https://frrl.wordpress.com/2011/07/01/principal-agent-redemption-at-motorola/

https://frrl.wordpress.com/2011/06/28/the-principal-agency-problem/

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Written by frrl

August 21, 2011 at 3:07 pm

Posted in Uncategorized

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