Successful Transformation within Motorola

At the time I joined Motorola’s Europe and East Africa Parts and Service Division, it was an organisation with a $100 million turnover, a staff of around 300, and an operating loss of $7.5million.  The function of the division was to maintain and repair radio systems and distribute spare parts, typically used for public safety, such as walkie talkies for the police, or in commercial areas, such as for taxis.  28 workshops, across 10 countries, provided this service.  Against this background I was appointed Finance Director and then Managing Director.

Our first task was to understand from our customers’ perspective how we were meeting their expectations.  In summary, this was that the cycle time to repair the radios was too long, and that the preventative maintenance provision needed to be improved.

Setting as a goal the profitable repair of radios in three days, the management team looked at how the organisation would need to be structured to support this.  It was clear this could not be achieved in the individual workshops: the test bench costs and high spares stock requirements being difficult and costly to maintain.  Centralisation of the repair service would be necessary: a location near Frankfurt besides an existing parts warehouse was well sited, though with incumbent costs.

We worked in partnership with TNT to bring the radios to this central location.  On day 1 the radios were collected from the partnerships in the countries across the area, reaching the Frankfurt workshop by 6am on day 2.  A double shift pattern was set up to ensure that by 8pm on day 2 the radio repairs were completed and ready for despatch back to the dealerships in the countries.  This 3 day turnaround meant that the 1 week repair delivery which customers had told us was acceptable could be comfortably achieved.

Whilst the majority of the radios could be repaired in this tight timescale – upwards of 90% – there were those which would not have proved economical to repair – for which we introduced an exchange programme.  Within a year, with these older radios being removed from circulation, we were able to repair 99% of the radios within a day at the central workshop.

The centralisation of the workshop meant that the local workshops were not required.  Some of these were sold to local dealers in the countries, and the remaining technicians who did not move on in this way remained with Motorola to be retrained as field technicians, with their focus changing to provide the preventative maintenance side of the service our Key Account customers told us they expected.

The centralised repair provision had tangible benefits.  There was improved understanding of why radios failed and their recurring pattern of faults.  This was communicated to the engineering division who corrected the faults at source.  The field technicians were in place to be able to educate our customers on the use of their radio systems.  Putting these aspects together, we were able to devise and offer lucrative maintenance contracts.  The result was a distinct swing in to profitability: $7.5 million profit was delivered in year 2 of my tenure.

The journey thus far had started with the division in a state of chaos.  We had listened to our customers, understood priorities, looked at and refined processes.  We had sold off assets (the local workshops) to provide the capital to invest in the central workshop and we had reorganised and retrained our teams.

The next stage was to focus on developing interdependence amongst the staff and to this end we set up cross functional, customer focused teams whose objective was to support the Key Accounts and distributors within the countries.  We shared our learnings on preventative maintenance and optimisation of maintenance contracts, and helped to train technicians within the dealer and distributor organisations, creating a synergy all through the supply chain.  We had a commonality of purpose and a distinct customer focus.

I then sought to create a learning environment, using a style which I have previously referred to in a posting on Priceless Motivation.  An individual would work 80% of their time in their principal job function, but spend the remaining 20% in a secondary field, developing their complementary skills in this area.  They would be assigned a mentor to support this side of their personal growth and self development.  This was a way to give people a wider understanding of Motorola’s operations, and objectives, and helped them to remain motivated and satisfied with their roles.

As I moved on to my next challenge within Motorola, the Europe and East Africa Parts and Service Division was leaner, profitable, and growing.

Those of you who are familiar with Dr Stephen R Covey’s the 7 Habits of Highly Effective People will no doubt recognise the behaviours he describes used in this context of company transformation.  The behaviours are such an empowering set of principles that I regularly and repeatedly apply them to personal and professional challenges, and, as described above, with positive outcomes.

This summary of a many-month-long journey is, of course, selective in the aspects of the turnaround it describes.  Clearly I have focussed on the cash and human side to this example though we plan to look more at the process in the next blog posting.

Please sign up for our newsletter where we can bring you articles such as this direct to your inbox.  We’d be delighted to have you join our growing list of subscribers.  Your comments would also be very welcome.  Do any of the experiences I have related sound familiar to you?  Are you faced with similar challenges?

Be the first to comment

You may also like...

Recognise the Value of your Social Media Strategy

Studies indicate that an increasing number of businesses are in the early stages of adopting social media. Many of these, however, are not quite sure what to do with their …Read more  »

The challenges of the early days of the digital TV revolution – part one of a story of a transformation

Today (31st March 2010) Wales will become the first part of the UK to complete its television signal digital switchover. 6 years ago, as MD of Sony Manufacturing, we embarked …Read more  »

Successful Transformation within Motorola

At the time I joined Motorola’s Europe and East Africa Parts and Service Division, it was an organisation with a $100 million turnover, a staff of around 300, and an …Read more  »

People Behaviours in Turnaround Situations

Part 2In part 1 of this article I talked about the different characters you meet in a turn around situation, I am now addressing how you should involve them in …Read more  »