Motorola Solutions CEO Greg Brown on Reinvention Under Pressure | The CEO Signal

I reacted very negatively and very bluntly to the board and I said, 'Are you freaking kidding me? Are you kidding me? There is no buyer for this company and it's wrong. And if we run a process, it'll leak to the journal. It'll cause unrest and further distraction. And if you want to fire me, go ahead and fire me.' Which I would recommend for future use, not something you should say to people you work for.

Well, not really. I recanted. I apologized. A few days later I said, 'You know what? That was an emotional reaction. My content doesn't change. My delivery does.'

Thanks for having me.

My pleasure.

We did.

I think, this is my 19th year. And it really, it sounds a little bit corny, but I really, Penny, love what I do. And I love what I do, but more importantly, I love the mission of the company. You can be CEO of a lot of different companies, but what we do is very special because it's public safety and national security. It protects communities. It protects people. And I like to learn. Like you, I'm a consummate learner. I am not at all embarrassed to ask dumb questions. It doesn't matter. I don't care what you think or say, 'Boy, he should know more than that.' I don't care because I know what I know. I don't know what you know. So, ingesting information, networking, widening aperture of understanding. And the other reason I love the company is I learn from people all the time. I do as many meetings and one-on-ones and skip levels and ask a zillion questions. And that's my oxygen.

Well, I would say in my evolution as a CEO this long, I don't think I've gotten to be a reasonably good CEO until the last 10 years. That's important. I think you evolve. And part of it, Andrew, is time management and information. So, early on I was more doer than delegator. Was involved in too many things. Didn't have the right level of prioritization in my opinion. And so finally, and this was several years ago, I took a step back and said, 'Time out. What's the information I need to run the company, and how often do I need it?' People, organization charts, financials, do I need it weekly, do I need it daily, do I need it monthly, financial projections, cap table, investors, competitive landscape, operations review information, board information. So, it was iterative and I curated in a software program that's an off-the-shelf program the list of things up top. I always say what's up top in my iPad. So I open it up. I go to this one screen and whatever's up top above this certain file folder is what I'm focused on. Right now it is supply chain ops review. Every company in America is going through a memory shortage whether it's direct memory costs DRAM or flash PCB boards servers. Okay. So what is the disposition of our direct memory costs? What was it last year? What is it this year? What is it by month? Tell me the top 20 suppliers. What's the trend? What's our end of year projection? What are we doing to mitigate? That's one example. So my iPad, as long as I have it, I have the information at my disposal and then it allows me to inform how I manage my time.

I would have to say the majority of my curiosity is around Motorola Solutions and things that are affecting it primarily or secondarily or from a tertiary impact. So I want to know about AI. I want to know about memory costs. I want to know about Dell servers. I want to know about our competition. I always and you and I you know this about me. I always have an affinity for politics. More interested at the federal level because it talks the field of the landscape by which we compete. But I want to know what's happening in Ukraine. I want to know what's happening with Iran. I want to know what's happening why did the UAE opt out of OPEC? Why did they do that?

No, that's more raw curiosity. So I want to know what are the options we have to open the Strait of Hormuz. Do we really have a munitions problem from a supply standpoint that's informing whether the Trump administration continues to engage kinetically or diplomatically? I like to know that. It has an ultimate impact on Motorola. But that's not my interest. My interest is why are these policy decisions being made and what's driving them? Because at the end of the day, I want to learn information that informs the why behind the what, but also gives me a window into the way people are thinking about solving problems.

Well, what's interesting is people often say, 'Boy, that was an incredibly courageous decision and insightful and cerebral.' I don't think so.

It was because if you knew what I knew, you would have made the same decision in the first month that I became CEO, literally as the baton gets passed to me and I get visibility into the enterprise-wide financials, the firm was losing about 350 or 400 million a quarter and it was all driven by the cellular phone device business. Had we not made the decision to split, bifurcate, segregate and exit that business, there wouldn't be an interview today. There wouldn't be a firm. We were a year and a half to two years away from bankruptcy extrapolating out. Now, you can slash costs, freeze the pension. We did all that, but it didn't change the crisis that was facing the firm.

Exactly.

I think now we are a public safety, national defense and enterprise security firm that does more than just public safety comms. So we sold systems or we sold devices largely to consumer or carrier. The public safety business, this jewel that was buried in the bowels of Motorola did systems, devices, software that interconnects the two bespoke and curated around workflow that public safety agencies, police, fire, EMS couldn't live without. It's vitally, vitally important. And I said, 'This is the only business like this. This is the only business with a competitive moat where our customers really see the value and criticality of what we do. And we could broaden that out where we could be instead of just a public safety communications company, a safety and security powerhouse over time to be the market leader.' And that's what I think has happened.

I think the three most important things to effective police safety, public safety is bail reform, courts, resources on people, officers, and the deployment of technology. And the deployment of technology could be instead of your old brick walkie-talkie that communicates from point A to point B, now it does broadband. Now it can incorporate LTE. Now you can see situational awareness on your walkie-talkie on a screen. Now a firefighter can see, he or she can see what's happening in a situation before they're there. So I see this voice-centric communications being multimedia systems and device to the firefighter, to the EMS technician or to the law enforcement officer that makes his or her job exponentially more effective. In 911 calls, we have AI translation, transcription, and other technology where if we reduce a response to a 911 call one minute, one minute, it saves 10,000 lives. That technology is being used in 911 call processing. We now have drone as a first responder. So DFR gives you aerial situational awareness. It's not spying or surveilling. It's flying to a situation over a fire, over an accident, over a distressed individual, over a lost child, and that technology can be brought back into the 911 center situationally pushed to the officer. The technology benefits, Penny, are extraordinary.

I think eventually you may. It's several years away, but you won't see them hovering. They're not going to be in the sky suspended over communities. They're dispatched per emergency. So, I don't think you will see them hovering. But you may see them being dispatched.

So when we look at safety and security and say, what are the most important things that we should own? Can we own them? Is there a competitor that's too far advanced already? And if there is, maybe it's an acquisition, maybe it's a partnership. What's the opportunity cost of deploying capital there versus somewhere else? And how much time will it really take to build something that competes versus something that leads? Because if I pick a market now or an area and say, 'Well, we're not in it, but it would take us 18 months to build a product.' I had this conversation this morning with Mahesh. I said, 'How long would it take you to build this product?' 'Year and a half.' But the market's not standing still. So what he's able to release in a year and a half today, we think would be comparable, but at the time in a year and a half won't be. So I think we're very disciplined around what to buy, what to build, and what to partner with.

Well, this was an exciting one. Penny, it's the biggest acquisition I've ever done. So, it's right now four and a half billion. If they and we achieve the earnout, which we put an earnout structure in place, it could end up being 5 billion. I hope it is. The business is doing superbly better than even we and I thought it would.

I don't necessarily want to be in the drone device business, but Ukraine has become the test bed and the best example internationally of where drone technology is being used. We don't make any of those drones, but do you know who's powering them? Many of them. We are. So, the acquisition of Silvus wasn't about getting into the drone business. It was getting into what I'll call drone infrastructure powering them through mobile ad hoc networking. Silvus is primarily a defense play, not a public safety play. Which is why I love the position because what we're doing in safety and security, whether it's public safety or defense technologies, I like being foundational in the infrastructure that then powers these individual devices to make service and defense exponentially more effective.

Well, I want to caveat. I welcomed him. Let's start with Icahn since he was chapter one. I welcomed him and I did. I also knew I had no choice, right? So, if you only got one choice, you better make it work. So, I'm not going to fight city hall. Carl was coming one way or the other. I did go to the board proactively and said we should settle with Icahn. They didn't want to do that. I said we should have representation on the board. They didn't want to do that. And they warned me. This is 4 months into my tenure. 'Greg, we want to be clear. We don't want that.' I said, 'I hear you.' And by the way, I said this with deference. I understand clearly what you're saying. I want them in the boardroom. Not him, but representatives. Those board members were some of the best board members I've ever had. They didn't consume oxygen in the room. They held management accountable. You come to these board meetings and work in between and you better damn well be prepared. And what I've learned over here's the best thing. And now my wife says, 'Greg, you got Stockholm syndrome. That's what you got.' In all of my 19 years either an activist or private equity has been in the boardroom. That has made me a better CEO. Because you're more accountable, you learn, you're prepared. By the way, it also makes the board better, too. And I just think I would tell you early on it made me transition as a CEO that thinks like a manager to thinking like an owner. Now, I always owned a reasonable amount of stock and still do. But I believe I really do believe that one of the things that makes me more effective than not is I run MSI as an owner, not a manager.

Well, it's more about the way you deploy capital. So, I could write a we can write a 100 million, 200, 500 million check. That looks like a good idea. Is that really would you do that with your own money? Would you do that with shareholder money? You're a shareholder. Is that the best use of the money? So I appreciate Icahn was tough. Icahn was very tough. ValueAct was tough too.

With Icahn it was more of an endurance test. I mean he would call me all hours of the day. He would say, 'I want to see you in New York tomorrow night for dinner.' And every time he called, I took his call. Every time I stopped what I was doing and took his call. And if anybody who's ever dealt with Carl, there's no call less than 45 minutes. So that's one. Two, he wants to see you. Three, he peppers you with questions, a million of them, and he'll ask you the same questions over and over, to see whether you're consistent, whether you know what you're doing. So Icahn made me tougher and stronger. I was very intimidated by Carl in the beginning and for a few years. Over time I don't know if there was a magic moment but begrudgingly we spent so much time together. I think he developed mutual respect. I always respected him. I think early on he was quite skeptical of me because he told me but we reached this common ground where he knew I would do what I said I would do.

Well, if you think about my plan was I believed separating Motorola was the right thing to do and exiting the cell phone business. That thesis got tested in an extreme way that never became known publicly. And I won't go into that detail behind the curtain, but at the 11th hour of separating the firm, there was a challenge to that. Is this really the right thing to do? Maybe we shouldn't. Maybe we should keep the business together. Maybe we should keep the business together and get rid of Brown.

It was. So, Greg is the guy to split the company. We got that part and we'll spin off the mobile devices business and we're cool with Brown, but maybe we shouldn't do that. Maybe we should keep it together. And if we do that, then Brown's not the right guy to run it. And that came up not by the board, but it came up through a challenge that reached the board level. And because at the time of that challenge, I had agreed to make the leader of the cell phone business co-CEO. That challenge with two CEOs thrust the board into the adjudication responsibility of deciding do we stay the course or do we hold up keep the firm together and get rid of Greg and that one not just because it was self-survival. I said I don't care what you do with me but you're out of your minds if you don't separate and exit cell phone. You want to shoot me? Shoot me. But this you're crazy if you do anything differently. That was a severe challenge that we ended up staying the course and that ironically Carl Icahn was quite instrumental in and we stayed the course. An example where I didn't and shifted was ValueAct. So we separate the firm. We're running Motorola Solutions. At the time, Penny, the largest acquisition I made was of a company called Symbol Technologies. I think it was in '05 or '06. Now it's a few years later and ValueAct says, 'Do you think it makes sense to still be in that business? Have you ever thought about maybe you shouldn't be?' I said, 'No, I actually haven't thought about that per se.' And they said, 'We think you should look at it.' We did, I did, and we sold the business. So the very business that we bought and I led the acquisition of my largest in my career, I led the divestiture of five or six years later. That's one where I did change course. One I stayed the course when I changed course because I am a believer in a meritocracy of ideas. Check your ego at the door. What's the right thing to do now? And that decision today might be different than what you would have decided three or four years ago.

I did. Now interestingly I did welcome them in 2014. ValueAct when our growth stalled said sell the firm.