I responded to the recent news of the resignation of RIM’s Jim Balsillie and Mike Lazaridis with mixed emotions.
As a Blackberry user and fan, it signals a possible change in direction to what I saw as an arrogant disregard for my patronage and loyalty. On the other hand, after reading some of the comments from the newly appointed CEO, Mr. Thorsten Heins I am saddened because it seems my love affair with this Canadian institution may just come to an end.
Mr. Heins’ sentiment that he will mostly follow the path set by his predecessors is disheartening and does not give me confidence in the future of this once global market leader.
I don’t believe you have to hold an International MBA in business to understand that for an incoming CEO to follow his predecessors when they were semi-forced to resign from their positions is a flawed strategy. Mr. Heins, have you not been paying attention? RIM, credited for inventing the smart phone industry, was once the most valuable company in Canada and essentially owned the world’s smart phone market share.
Today RIM is losing market share (down to approx. 10%), losing value quickly (89% since 2008) and been plagued with system outages, delayed product launches, terrible customer service, horrible PR and marketing and a complete and utter lack of innovation.
Even its original and most loyal customer base: businessmen and bankers are feeling neglected and let down. In a note to investors the BlackBerry was called “a secular loser to Apple and Android devices,” by Ittai Kidron, an analyst at Oppenheimer & Co. in New York.
Doing more of the same yields, well, more of the same. And given RIM’s shameful loss of market share and stock value, the “same” is not something the new CEO should be striving for. Be Warned. RIM and your predecessors are guilty of committing the 7 Deadly Sins of Market Leaders.
We all want success. And we love winners. It’s the famed “American Way”. And in my opinion there’s nothing wrong with that. However, market leaders can make strategic missteps when they try to overreach their success.
After dominating the North American smart phone market, RIM turned its sights to the international market where their networks were well suited for the Blackberry. On the surface this was a smart move; however, while the company’s resources were being funnelled to growth in those markets, the US market migrated to high-end mobile computing on the 4G platform and RIMs products were simply not ready for it. In their global domination efforts, they lost sight of what was happening at home and with their core market…and fell behind.
After achieving market dominance, when the money and fame starts rolling in it’s not uncommon for an owner/CEO to take advantage and play out their fantasies. You can hardly blame them after all, they’ve earned it. However, history is proving that every product and business has a lifecycle and the corporation cannot maintain a market leader roll without constant re-invention. And this requires a singular focus. The late Mr. Jobs and Apple are the poster children for this rule and the resulting benefits. If you cannot live this rule, step aside and let someone else do it before you’ve lost too much ground.
During the last few years, most of the news reported here at home about RIM’s Mr. Balsille was his battle to win a NHL hockey franchise when maybe he should have been focusing more on where market and consumer demand was evolving and innovating new products to meet those demands?
When a business becomes about the executive’s ego and not the company, market leading businesses quickly lose their position. Today, even a publicly traded business must be seen to be more about its customers’ wants and needs than those of its executives.
The contributions of Jim Balsillie and Mike Lazaridis to RIM’s initial success are unquestionable but their efforts to hold on to their titles (and presumably: pays, perks and notoriety) blinded them to what was going on around them. They rarely left their ivory towers to engage their loyal customers and the results speak for themselves. Ego will not only cost you market share, it will kill the business completely.
The social world we live in has made every person – customer or not – as impactful to the business’ bottom line as the people who work for the company itself. Through social media, the power of the pen is so much more powerful than ever before and so no executive of a market-leading company can rest on their laurels and become aloof to the trials & tribulation of their customers. Keeping customers and even non-customers happy and engaged with your brand is critical.
The fall of RIM is as much about arrogance as it is about its lack of innovation. A series of critical outages to RIM’s formerly well-regarded network was met with practical silence from the company’s executives: little in the way of updates and little in the way of heartfelt apologies. Adding insult to injury was a feeble attempt to offer old, ill-working apps at no charge, which were received with distain from loyal customers. In the absence of personal, well-intended communication we were made to feel that we should be lucky that RIM allows us the privilege of owning a Blackberry and so we should stop complaining.
5. Becoming Boring
Today a product and its business must be more than product’s quality and utility. It must have personality. In the era of social media, reality TV and instant-celebrity, people are more interested leaders who are comfortable being themselves and having a clear and definable message. Case in point: Richard Branson or Steve Jobs.
Can anyone tell me what RIM’s Jim Balsillie or Mike Lazaridis look like? Stand for? What they preach? What their vision is? Exactly.
6. Losing Sight of a Vision
It’s possible for a market-leading business to have multiple products in multiple markets but it must always communicate a central principle and vision. Further, it must demonstrate that in every action they take, not just in the communications they push out through PR firms. Consider companies like Coke, Starbucks or 3M as an example.
At RIM, the company’s leaders have been notoriously inconsistent and confusing about their vision and future plans. When asked what makes RIM unique, Mr. Balsillie told Bloomberg BusinessWeek: “We’ve taken two fundamentally different approaches in their casualness. It’s a causal difference, not just nuance.” What?!
Founder Mr. Laziridis is even more famous for his incoherency about the business. Reactions to his presentations at industry conferences are usually quite comical with phrases like: “Sorry, can’t follow what he’s saying” and “He isn’t making any sense at all. Quite literally, we don’t know what Mike is talking about right now.”
7. Believing your own hype
A business executive can spin so much hype that it becomes ingrained into his psyche, which prevents him from seeing what the trend currents are predicting: what the public’s perception is and how their needs are changing. The public is fickle and their loyalty is even more fickle. A market leader can never believe its own hype.
Case in point: RIM built an industry around a smart phone for business, which could also help personal communication and productivity. It was lauded for this innovation and it played on this premise so much that it didn’t see what was coming.
Apple (and more recently Google, Android and now even Microsoft) understood that the public would rather see the smart phone as a personal device on which they could also conduct business needs. They understood that the smart phone was becoming integral with our daily lives; almost another human appendage. Plus, there are more people out there than Blackberry’s beloved CIOs for whom RIM has relied on to build a business.
Eventually, the lack of personal apps, speed and ease of use – and dare I say: sexiness – of the Blackberry in the face of Apple and Google’s products rallied enough workers to push their CIOs to reconsider their allegiance.
If RIM’s new CEO follows in the path of his predecessors and continues to commit these 7 deadly sins of market leaders, he will be writing the business’ epitaph. Do you agree that these deadly sins were committed by Blackberry’s leadership during their rein as market leaders?