With RIM replacing its co-CEOs, it seems to finally be acknowledging that things need to change if the company is going to end its recent troubled run. Investors have been calling for co-CEOs Jim Balsillie and Mike Laziridis to hand over the reins for some time and they’ve now taken the hint by moving aside for former COO Thorsten Heins.
However, the change in leadership may not be as significant as it first appears
One of the first comments Heins made on assuming the post was that there will be no “drastic change” to the company’s strategy. This implies that the company’s strategy has been successful all along. That’s if success means falling sales, profit warnings, service outages and product delays, which led to the company’s shares hitting a seven-year low.
RIM needs a new course but early indications are that the new CEO intends to keep business as usual. And with Laziridis and Balsillie still on the company board, their influence will undoubtedly still be felt. This has led to fears that the company could continue on its present course, which would only see it fall further and further behind its rivals.
The financial markets seem to agree. The news of Heins’ appointment prompted RIM shares to slip 8.5 percent to US$15.56 at the Monday close in New York, Bloomberg reported.
Another technology company that was in a similar position to RIM a few years ago is German business software maker SAP. At the end of 2009, SAP was suffering from declining revenues and product delays, while also being at odds with customers by attempting to hike support costs.
After losing the backing of the board, CEO Leo Apotheker was replaced by co-CEOs Jim Hagemann Snabe and Bill McDermott in February 2010, who said they intended to regain the trust of customers.
The new leadership was effectively admitting something was wrong and that they intended to address it. Towards the end of their first year in charge, user groups said they felt the company was finally listening to them.
The co-CEOs also stated their intention to put innovation at the heart of the company. SAP duly delivered its long-awaited cloud software and in-memory processing technology while investing US$5.8 billion in mobile platform company Sybase.
Fast forward to the end of 2011, and SAP delivered its best ever full year and Q4 results with its new technologies driving much of the revenue. SAP’s leadership articulated how they wanted to change SAP and delivered on it.
The change of leadership at Apple in the late 1990s, when Steve Jobs returned messiah-like to build the huge electronics company we all know today, is another example of a change of leadership that had a real impact. Apple didn’t just promote someone from within to continue its course – it took a gamble and the rest is history.
RIM could learn a lot from SAP and Apple. Like those companies, it now needs fresh thinking if it’s to get out of its current predicament. It can’t sit around and hope its current strategy delivers just because someone else is in charge. It needs to innovate. The company’s next-generation BlackBerry 10 platform looks promising but if the company keeps delaying its release rivals will have made another leap by the time it emerges. BlackBerry 10 needs to come out as soon as possible and be a true rival to Android and iOS.
The company also needs to consolidate its product range to reflect what consumers want. The Qwerty devices that made RIM’s name will stagger on for a while but the company has to focus on developing touchscreen smartphones with the functionality users want. It also looks like the company has finally understood what people want from tablets with this year’s PlayBook update, but why didn’t the company think of including native email support in the first place?
And like SAP before it, RIM needs to rebuild customer trust. It can’t afford a repeat of last year’s BlackBerry email and messenger service outage, which affected millions of users.
All of this will ensure RIM keeps pace with its rivals but it also needs to innovate to find a new USP that has a similar impact to its original push email technology. In order to do this, the company needs fresh inspiration and, ultimately, the appointment of Thorsten Heins as CEO may yet prove to be not quite inspired enough.
Stability is all well and good when a company is breaking revenue and profit records but if a firm is struggling with an aging hardware and software portfolio and constantly delaying new technology, it isn’t going to help. Big changes are needed and after spending 23 years at Siemens before joining RIM in 2007, Heins doesn’t appear to have the credentials of someone who can shake up an ailing technology giant.
A new face at the top doesn’t automatically mean a struggling company’s fortunes will improve. Like Apple and SAP before it, RIM needs a change of philosophy if it’s to become a major player again – and it needs it fast.
The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members