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Q. Do you think that Motorola will leave the handset business?

A. The company needs to restructure itself, and it won't be easy.

To give you an example, Nokia has $33 billion in revenues and about 30,000 employees. Its executives come in every day thinking about handsets and infrastructure.

Motorola has $25 billion in revenues and 90,000 employees. Their management comes in each day and thinks about 12 different markets, from handsets to cable. They have to deal with multiple industries, multiple end-markets and multiple competitors. They need to look at what they are doing and at what is worth doing.

Handsets represent more than 50 percent of their revenues, but at this point I would question if handsets are a good business. I don't know if Motorola would sell it. But it is worth more now than it will be in a year or two.

As all the mega-mergers of the last few years have settled out, it's looking like running large conglomerates successfully is much harder than running the component companies separately. That is, it seems like business folks are having a hard time making the whole more profitable than the parts.

Unfortunately, my only b-school education is a couple chapters of Drucker; still, I wonder if there's some rule of thumb for figuring how wide/narrow a companies focus should be. It seems that highly diverse product companies (vs. service companies) have the most difficulty. Additionally, as always, as a company gets larger, the employee's ability to innovate seems to calcify.

Link.