We ought to be # 1: Zander

Caroline Humer

NEW YORK: Edward Zander relishes the role of an underdog. Take his taste in baseball teams -- despite his New York roots, he cheers for the long-suffering Boston Red Sox who have not won a championship in 85 years.

As the new chief of Motorola Inc., Zander is being called upon to turn the world's No. 2 cell phone maker -- which has been psyched out by product delays and quicker competitors -- into a nimble champion.

Zander, one of the nattiest dressers in Silicon Valley, heads to Chicago from California in early January, where his first move, he says, will be to buy some warm clothes.

"Nobody told me it would be this cold here," Zander joked during a conference call on Tuesday.

Zander, 56, a former Sun Microsystems executive, said he knew what he was up against as new chairman and chief executive of Motorola, which lost its lead in the cell phone market to Finnish rival Nokia in the mid-1990s.

Zander, who for the past 18 months has been managing director at private equity firm Silver Lake partners, said he would focus on Motorola's delivery of products. He alluded to one particularly painful misstep, when some U.S. wireless operators said in September that Motorola would not deliver some camera phones in time for the holiday season.

"These guys knew camera phones before any of us knew camera phones. We ought to be in the market and we ought to be No. 1," he said. "We've got to get execution. We've got to get results. We've got to get predictability."

SECOND FIDDLE AT SUN

At Sun, Zander helped more than triple sales before the computer maker fell on hard times. Sun, which rode the wave of the Internet boom, has posted declining revenues for 10 quarters in a row, beginning in the years when Zander was still No. 2 to Scott McNealy.

Zander worked at Apollo Computer and Data General before joining Sun in 1987 as vice president of corporate marketing. He moved up quickly, running everything from hardware and software design and development to global sales, service and manufacturing over the years when Sun's shares soared to $64 a share in September of 2000.

Zander was credited with helping change Sun's sales focus from the engineering community to business customers. He was revered by sales people at the computer maker, who attributed much of their success to him and his quick wit.

"He was clearly viewed as the driver behind the solid execution and was viewed as the force behind the operational success that they had," said Marty Shagrin, a technology analyst at Victory Capital.

Zander also apparently didn't have much need for coffee. "He had probably a higher energy level than any of the 20 year olds, who worked at the company when he was there," said a Sun executive who worked for Zander for 13 years.

But before he left the company, Sun already was having problems cutting costs in line with decreased demand for technology and coping with heightened competition.

Zander has since said he'd called at the time for a restructuring amid the downturn in technology spending and stiff competition from International Business Machines Corp., Dell Inc. and Hewlett-Packard Co.

"I would have done some things differently, but who knows whether I was right or not. I just felt strongly about some areas," Zander told Reuters.

One analyst recalled a meeting with Zander in which he laid out his concerns about Sun, and, instead of being rebuffed, Zander acknowledged a number of the points and asked the analyst what should be done to remedy the concerns.

"You really appreciate management that recognizes its weaknesses," said the analyst, who declined to be named. "The thing that impressed me most about Ed is that he doesn't stick his head in the sand, and at Motorola there really needs to be someone strong at the helm."

He also has a singular focus on the task at hand. The executive who worked for him recounted an earnings conference call on which Zander was to give the update on the company's business, but he had developed a pain earlier in the day that turned out to be kidney stones.

By the time of the call, Zander was lying on the floor outside the conference room before it was his turn to speak.

"It was like a bell went off," the executive said. "He climbs up and gives his pitch. And then literally as soon as he was done, his admin had to drive him to the hospital."

(Additional reporting by Ben Klayman in Chicago and Duncan Martell in San Francisco)

Reuters