RIM: A Sweeter Berry or “Canadian Road Kill”?
When a management reshuffling is announced on a weekend at an hour when most of America is focused on football playoff games, it’s not usually a good sign. I got the news from my Facebook BlackBerry feed.
Fans of the Blackberry and RIM (I count myself among them) certainly knew that some big changes had to be coming in 2012. US Market share was collapsing after a series of products like the PlayBook appeared to be duds. The stock price had collapsed. Time for a new small-p playbook.
But on a conference call with analysts, the new CEO, Thorsten Heins, was offering a new cover on the existing book. Heins said that RIM’s problems were not in its products and strategy, but in its marketing, PR, and execution. To many analysts, this sounded like an entrenched exec defending a strategy he helped devise, not a change of direction:
I don't think that there is some drastic change needed. We are evolving. We are evolving our strategy. We are evolving our tactics, our processes. I don't feel that I was held back in any way to do what I needed to do. But when I talked about -- I'm a German, so I like this word, the process discipline. I think that is something we need to get better at. But this is not a seismic change. This is scaling the company further. -RIM CEO Thorsten Heins, RIM conference call.
Heins’ statement apparently sparked another selloff in the stock, and some huffing and puffing in the media, best exemplified by this quote from RIM shareholder Vic Albioni on CNBC: “[Heins’ remarks sound] too much like the former co-CEOs handpicking a successor to stay the course, and the board just going along with the change to bring about almost any change to try to appease the marketplace.”
The opinion that should matter the most here is that of RIM’s employees, particularly the one who wrote this amazing open letter to Lazaridis and Balsillie last summer . In sum, the anonymous “senior executive” suggested that at RIM:
“Almost every project is falling further and further behind schedule at a time when we absolutely must deliver great, solid products on time. We urge you to make bold decisions about our organizational structure, about our culture and most importantly our products.
While we anxiously wait to see the details of the streamlining plan, here are some suggestions:
- Focus on the End User experience…
- Recruit Senior SW Leaders & enable decision-making…
- Cut projects to the bone…
- Developers, not Carriers can now make or break us…”
The really amazing thing is that RIM actually responded to the letter and emphasized that the company is much stronger than the dissident employee would have us believe:
The company is thankfully in a solid business and financial position to tackle the opportunities ahead with a solid balance sheet (nearly $3 billion in cash and no debt), strong profitability (RIM’s net income last quarter was $695 million) and substantial international growth (international revenue in Q1 grew 67% over the same quarter last year). In fact, while growth has slowed in the US, RIM still shipped 13.2 million BlackBerry smartphones last quarter (which is about 100 smartphones per minute, 24 hours per day) and RIM is more committed than ever to serving its loyal customers and partners around the world.
Fair point. That’s the profile of a company that not only has a seat at the table, but also is a force in the industry. The same could have been said of Apple in 1997, at the dawn of Jobs’ return and the depths of observers’ doubts about the company’s viability. As the RIM executive pointed out, that’s when Jobs took the stage at the 1997 developers’ conference.
“I believe that there are some really good people running the key areas of Apple… I believe very firmly that there is still a very sizable market for some really great products, and there are some giant holes that we can fill.”
That’s true of RIM, too: it single-handedly created share-of-belt-space where non had existed before; it has become part of corporate IT’s DNA, and its users are far more loyal, and addicted, I believe, than the aters would suggest. And c’mon! These dudes are rock stars in the industry. Have we all forgotten Mike Lazaridis’ awesome American Express commercials?
We need a bold, innovative RIM. My gut has been telling me that despite its runaway success, Android is a science project for Google, where it lives to serve the company’s number one priority, search. And even in an age of bring-your-device, I think that Apple will never speak the language of the CIO in the way that RIM has for more than a decade. That’s more than a niche, that’s a huge business. And it’s there for a courageous CEO to take, even if it means taking on the two founders on a few sacred cows. Is that Mr. Heins? I hope so. Let’s prove Jim Cramer, who called RIM “Canadian Road Kill” wrong, and burn his Canadian bacon over this one. I believe the ‘Berry has sweeter days to come.
