How management has failed at RIM Falling market share. P.docx

How management has failed at RIM
Falling market share. Product delays. Angry investors. An
exclusive, inside look at the BlackBerry maker’s internal
chaos.
Jan 19, 2012 Joe Castaldo
Update: On January 22, Research In Motion announced that
Mike Lazaridis and Jim Balsillie
would step down as co-CEOs and co-chairmen of the board of
directors. Lazaridis will now be
vice chair of the board, and head up a new innovation
committee. Balsillie will become a
director. Their replacement as CEO is Thorsten Heins, formerly
RIM’s chief operating officer
for products and sales. Barbara Stymiest, who became a director
in 2007, will now chair the
board. Investors reacted negatively to the news, with RIM
shares opening 5% lower on the
NASDAQ on January 23.
Is it all falling apart? It seems an absurd question to be asking

about a company like Research In
Motion, Canada’s most successful and influential tech firm. Just
how successful it would become
was hard to imagine when Mike Lazaridis set up shop in a tiny
office above a strip mall in
Waterloo, Ont., in 1984. Jim Balsillie joined eight years later,
bringing with him the sales and
strategy muscle to take RIM’s products to the world. Together,
they were unstoppable. They
turned RIM into a global powerhouse that delivered mobile e-
mail to the masses, sparking a
revolution in mobile communication and defining the
smartphone as we know it. Under their
stewardship, RIM continues to rake in billions in revenue each
month and attract new subscribers
at a time of fierce competition.
But somehow, lately, something’s gone terribly wrong. A deep-
rooted dysfunction seems to have
overtaken the company. Balsillie and Lazaridis have so badly
lost the confidence of the market
that investors and analysts no longer seem to care about the
billions in revenue or the 35%
increase in subscribers over the past year. The highlights of
2011 are almost too painful to

mention: the PlayBook, RIM’s first tablet, was a flop; its latest
line of BlackBerry smartphones
was delayed; weak sales forced the company to issue a profit
warning in the spring; its network
was hit by a massive service outage in the fall; and it suffered
the largest wave of layoffs in its
history. Once dominant in the smartphone industry, the
company has lost significant ground to
the competition: RIM’s chunk of the U.S. market dropped to
just 12% by year-end from 44% in
2007, according to research firm Strategy Analytics. Its share
price on the Toronto Stock
Exchange has fallen even further—losing a full 75% of its value
in 2011.
What isn’t fully understood is how RIM ended up going from
the company that could do no
wrong to the company that can’t seem to get anything right.
RIM declined to make either
Balsillie or Lazaridis available for interviews, but discussions
with a number of high-level
insiders who left RIM during the past year portray a company
that has grown unwieldy and
http://www.canadianbusiness.com/author/joe_castaldo/

unorganized, and where conflicting opinions and a lack of clear
direction compound an already
difficult situation.
There’s no question that 2011 was a year to forget, but so far
2012 isn’t looking much better. On
a conference call to discuss RIM’s fiscal third-quarter results in
December, the co-CEOs
revealed that their newest smartphone line, dubbed BlackBerry
10, will not be available until the
latter part of the year. That means RIM will have no major new
products in the North American
market for months, and it is already behind the competition in
many respects. Instead, it plans to
spend upwards of US$100 million per quarter to market its
existing smartphones in the U.S.
Balsillie and Lazaridis still enjoy support in some quarters,
including from prominent investors
such as Fairfax Financial Holdings CEO Prem Watsa. But others
are calling for the co-CEOs to
break RIM into pieces, sell it off or relinquish control entirely.
For the two guys who essentially
created the smartphone market and built a multi-billion-dollar
company in the process, the calls

to step down must seem outlandish. In December, the pair
announced they would each take $1 in
annual compensation as a sign of their commitment to RIM.
Their commitment, however, was
never really in question. Unless they change their ways, it may
in fact be the problem.
Everyone—except maybe RIM—recognized competition would
come to the smartphone market.
Unfortunately, RIM reacted to Apple’s iPhone and Google’s
Android operating system by
ignoring them.
“How much presence does Apple have in business? It’s
vanishingly small,” Lazaridis said in an
interview with the Guardian newspaper when Apple revealed the
iPhone in 2007. A week after it
went on sale, Balsillie told a reporter he wasn’t sure if anyone
at RIM had used it. “I haven’t
seen one,” he said. “You watch these things, but you really have
to just focus and do your job.”
Neither of these statements is particularly surprising; bravado is
necessary to avoid spooking
investors. But inside RIM, they were just as dismissive,
particularly of the iPhone’s short battery
life. In RIM’s early days, Lazaridis obsessed with ensuring the

company’s devices could operate
for weeks without a change of batteries, believing longevity was
important to business clientele
on the move. A practical engineer, he couldn’t understand why
anyone would use a device like
the original iPhone, which died after a few hours.
Their confidence stemmed from years of vanquishing
competitors. Nearly every handset from
established players like Motorola and Nokia was touted as a
BlackBerry killer. They all failed.
“We just kicked the shit out of Microsoft and Nokia,” says a
former employee, “and there was
this general sense that we didn’t need to do anything else
besides focus on our core
competencies.”
RIM’s dominance and financial success allowed the CEOs to
engage in noble philanthropic
pursuits, and each established a non-profit institution. Lazaridis
created the Perimeter Institute
for Theoretical Physics in the company’s hometown of
Waterloo. Balsillie set up the Centre for
International Governance Innovation practically across the
street. He even found time to chase

the purchase of an NHL franchise. To anyone concerned that he
was distracted, Balsillie told The
Globe and Mail in 2007 that he still spent 90% of his time on
RIM.
Success also bred hubris about RIM’s position in the market. By
late 2009, it was clear that the
iPhone and Android had redefined the smartphone, and that RIM
needed to adapt. The company
had to target consumers more aggressively, not just business
customers. It also had to drastically
improve the BlackBerry’s user interface and web-browsing
capabilities, not to mention attract
developers to write more applications for the BlackBerry
platform. Smartphones became less
about communication—RIM’s biggest strength—and more about
consuming media.
What’s more, the company itself was becoming increasingly
complex. RIM produces multiple
handsets, each with different screen sizes and internal hardware.
RIM will even customize the
same device to suit the needs of different carriers. Apple, in
contrast, produces just one iPhone
model per year. The product complexity at RIM takes a firm

hand to manage, and that becomes
more difficult when the entire organization is undergoing a
seismic shift.
Around the time that Apple emerged as a serious competitor,
RIM lost a crucial executive when
chief operating officer Larry Conlee retired. He joined RIM in
2001 after 29 years at Motorola to
oversee the crucial engineering and manufacturing functions.
With the droopy countenance of a
bulldog, Conlee was a pragmatic taskmaster, ensuring deadlines
were met and that subordinates
were held accountable for screw-ups. (Conlee has since worked
with RIM in an advisory
capacity at various times, including last summer when the
company announced 2,000 job cuts.)
Before Conlee retired in late 2009, he brought up a new crop of
people to replace him. But
according to a former employee, the new operational staff
members were never fully empowered
to do their jobs. Instead, Balsillie and Lazaridis took a greater
role in running the company.
Lazaridis, for instance, started holding regular meetings with
senior operations staff who
previously reported to Conlee. This ultimately became

problematic. Lazaridis believes RIM can
pull off just about anything, and his enthusiasm led him to set
overly aggressive deadlines. One
of Conlee’s skills was managing his boss. Given his deeper
insight into operations, Conlee knew
better what was achievable and pushed back against Lazaridis to
arrive at more realistic dates.
He also had clout. Unlike many subordinates, he didn’t owe his
career to RIM, and happened to
be 13 years older than Lazaridis, giving him the confidence to
tell the founder of the company
that he was wrong. When Conlee left, there was no one with
comparable experience and
influence to disagree with Lazaridis. Deadlines were set, launch
dates announced publicly, and
then blew past.
One former employee says the situation got so bad that internal
deadlines simply weren’t taken
seriously. As a product launch date inched closer, it was
common for a few teams working on the
same project to realize they were unlikely to make the date, but
no one spoke up, under the belief
that another team was even farther behind. “Everybody just kept
their mouths shut, waiting for

somebody else to break,” says the former employee. Because
the teams weren’t fully
communicating, the executives overseeing them had little clue
as to the source of the problems.
Adding to RIM’s difficulties is the co-CEOs’ preference for
consensual decision-making. Former
employees describe it as a process of bringing vice-presidents
on board with a proposal, and
things move ahead only when there is widespread agreement.
Some see it as a relic from the co-
CEOs’ days of running RIM when it was a startup. Building
consensus may work well in small
companies, but not in large enterprises when multiple vice-
presidents are involved. “Gaining
consensus to get something done was next to impossible,” says
a former employee. “It just stalls
all innovation.”
Balsillie and Lazaridis would push through ideas they felt
strongly about, but the goal of
achieving consensus nevertheless created confusion. No one
would take responsibility if a
concept failed, so it wasn’t clear who should be disciplined or

fired. “You’d be in meetings
where the question was ‘Who the hell is responsible for this,
anyway?’ And nobody puts up their
hand,” says the former employee. The duo prefers this model
because it allows them to maintain
control, according to this individual. Since senior executives
knew consensus was necessary, and
because accountability was often unclear, they were unlikely to
make decisions without the
consent of Balsillie and Lazaridis.
Adam Belsher, who left his job in September as vice-president
of the Verizon business unit at
RIM after seven years with the company, says the lack of
accountability is partly a result of the
company’s rapid growth over the past decade. Because the
popularity of the BlackBerry
exploded, the company didn’t have the ability to set up a
rigorous management structure in
which everyone had clear responsibilities. RIM has tried to
improve the situation in the past year
or so, and announced a reshuffling of senior executive
responsibilities in July. “If you miss
schedules, people should lose their jobs,” Belsher says. “That’s
a bit harsh, but based on the new

structure they’ve put in place, there’s going to be more
accountability and focus on execution.”
Whether Balsillie and Lazaridis will be able to enforce greater
discipline is unclear. “Mike and
Jim are very experienced running a startup, where we’re in this
together. But when a company
has 20,000 employees, it doesn’t work that way,” says a former
employee. “Making the tough
decision to let somebody go is just heart-wrenching for those
two guys. This is just not
something they do.” More accountability also means they will
have to pull back and let the
senior executives below them do their jobs, including allowing
for more leeway to make
decisions. “If they can’t, then those calling for a change of
personnel may well be right.”
The development and launch of the PlayBook stands as an
unfortunate example of how RIM’s
internal problems result in poor execution. The irony is that
RIM had an opportunity to be on the
forefront of the tablet market. Years before Apple’s iPad
debuted, RIM’s corporate customers
were pushing it to scale the BlackBerry experience up to a
larger device. RIM envisioned a

digital picture frame that would mirror BlackBerry content on a
bigger screen. Later, the
company talked with bookseller Indigo about creating an e-
reader, according to those familiar
with the matter. But the massive success of the iPad in 2010
made it clear the company needed
more than an e-reader.
Determining the intended audience for the tablet was an issue
from the start. Typically, the co-
CEO structure allows the two to focus intensely on their
strengths and interests. Lazaridis can
concentrate on technology while Balsillie can develop carrier
relationships. But their interests
sometimes overlap, such as with branding or marketing, and
certainly when RIM develops a new
product like the PlayBook. Former employees say the two
present a united front on issues when
together, but discrepancies can arise in their views when talking
to executives separately. This,
too, leads to confusion and undesirable outcomes. According to
former employees, Lazaridis
wanted to target a broad range of users with the PlayBook,
including consumers; Balsillie saw it

as a tool primarily for business clients. The conflicting views
may have contributed to an
unfocused product. The marketing campaign positioned the
tablet as “professional grade” and
yet the very name of the product suggests it’s all about fun. It
ultimately hit the market without
meeting the needs of either consumers or business users.
A change in strategy partway through development contributed
to the problem. RIM initially
intended to “port” its existing Java-based operating system onto
QNX, a much more powerful
operating system. In simple terms, porting meant that RIM
wouldn’t have to build much of the
underlying software from scratch. According to those familiar
with the matter, RIM didn’t
adequately determine whether porting was a viable option
before it made the decision and set
deadlines for various PlayBook elements. As RIM progressed, it
became clear that porting would
be problematic in the long run, and that many features would
indeed have to be built from the
ground up in QNX. This includes an e-mail program integrated
with RIM’s famed security

features, which will only be available for the PlayBook with a
software upgrade to be released
next month.
Meanwhile, the lack of clarity around the tablet’s intended
audience, and the fact that many
features were falling behind caused huge difficulties for those
trying to create a coherent
advertising campaign. RIM’s chief marketing officer at the time
was Keith Pardy, who joined in
2009 after stints at Nokia and Coca-Cola. Pardy had been trying
to shift RIM’s advertising away
from highlighting specific features and create a more emotional
attachment to the BlackBerry
brand. Both Lazaridis and Balsillie, however, were unhappy
with the PlayBook concepts. RIM
parted ways with two ad agencies, Leo Burnett and Los
Angeles–based boutique firm
72andSunny during the process. In one concept, 72andSunny
pitched having Tom Cruise reprise
his character from the 2008 comedy Tropic Thunder as a brash,
cursing movie studio executive,
and equip him with a PlayBook to run his corporate fiefdom.
Balsillie and Lazaridis hated it. The

company later ended its relationship with 72andSunny. Pardy,
who did not respond to interview
requests, left the company soon after.
Only a few weeks remained before PlayBook launched, and the
campaign was still not finalized.
A mad scramble ensued between RIM and its remaining ad
agency, AMV BBDO, to put
something together. Eventually, Balsillie laid out a new vision
for a campaign that focused on
the features that differentiated the PlayBook from its
competitors, namely Flash capability
(which the iPad didn’t have), multi-tasking and portability.
BBDO quickly produced the
commercials. The ads were a return to RIM’s traditional
marketing strategy, which narrowly
focuses on technology and eschews an emotional connection.
While the PlayBook was crippled by its deficiencies, one
feature that it did include further hurt
its chances of success. RIM developed an app called Bridge
that, among other things, allows the
PlayBook to connect to a BlackBerry and browse the Internet
without the need to purchase a
separate data plan. Some inside RIM warned that carriers
wouldn’t be receptive to this feature

since it’s essentially a lost revenue opportunity for them.
Balsillie, according to those familiar
with the events, pushed it ahead. It was an unusual move for a
company that has always
promoted itself as a faithful companion to carriers. “Enthusiasm
took over,” says a person
familiar with the situation, “and that resulted in trouble.”
Out of a desire to differentiate the PlayBook from the
competition, particularly because it lacked
many of the features of other tablets, RIM may have ended up
disturbing its relationship with
U.S. carriers. In a press release issued one month before the
PlayBook launched, RIM included
Verizon, AT&T and Sprint on a list of retailers it expected to
carry the PlayBook. None of those
carriers did so for its April launch. The Bridge app wasn’t even
available for AT&T BlackBerry
subscribers until June, as the carrier said it needed time to test
the function. In the crucially
important U.S. market, RIM sold the tablet primarily through
big-box retailers such as Best Buy
and Staples. Unfortunately, the company neglected to include an

interactive demo to run on
devices that were on display in stores. In some cases,
mischievous shoppers dove into the
security settings, set passwords and walked away, rendering
PlayBooks unusable for others (RIM
says the issue was not widespread).
In late 2010, with PlayBook development in full swing, some
executives worried that RIM was
neglecting its core enterprise market—industry jargon for
business users. The enterprise sales
and marketing division bulked up with new employees to push
more BlackBerry devices into the
corporate world. The PlayBook, however, dominated internally.
“Everybody that had access to
clients was being asked to focus all dialogue around the tablet,”
says a former employee. “It was
a distraction, and it took away from the overall message that we
also have a very, very attractive
smartphone.” Last summer, the enterprise sales and marketing
division was among those
downsized. The result is that RIM may have taken its eye off
the BlackBerry to rush a tablet to
market that wasn’t yet ready. Ultimately, 500,000 PlayBook
tablets were shipped during its first

quarter on sale. Only 150,000 were shipped during the latest
quarter, and sold at deep discounts.
The PlayBook makes up just 1.1% of the tablet market,
according to research firm IDC Corp.
Despite all of the problems the PlayBook caused, RIM can’t
ditch it, even after the company
took a US$485-million pre-tax charge in the last quarter to
write down the value of its inventory.
The tablet is the only product running the QNX operating
system until the new BlackBerry
handsets are released, and RIM needs developers writing
applications for the platform to
counteract the perception that BlackBerry devices suffer from a
dearth of apps. Both CEOs are
committed to seeing it succeed. “While we would have preferred
the initial launch to have been
smoother,” Lazaridis said in December’s conference call, “I
firmly believe that the BlackBerry
PlayBook tablet remains the most secure and most advanced
tablet platform on the market
today.”
As RIM’s stock price plummeted last year, one of Canada’s
savviest investors began buying in

massive quantities. Prem Watsa, known as Canada’s Warren
Buffett, is now the company’s fifth-
largest shareholder through Fairfax Financial Holdings, the $9-
billion insurance and investment
firm that he founded in Toronto. Watsa held a small stake in
2010, increasing it as others fled. As
of last September, he held 2.25% of the company. The value of
his investment, then worth $252-
million, has shrunk by more than $50-million.
He’s unconcerned. “That’s never bothered me because we take a
three- to five-year view,” he
says. Watsa’s contrarian bets, such as getting out of stocks
before the markets crashed in 2008,
have proved remarkably successful over the years, and he’s now
betting on a turnaround at RIM.
At current prices, RIM is a bargain. It is trading for less than
the total value of its assets. In
Watsa’s view, this is an irrational market reaction, given that
RIM is a debt-free company which
earned $19.9-billion in its last fiscal year. Investors are also
discounting RIM’s international
growth. In the past year, RIM actually boosted its subscriber
base by 35% to 75 million.

“There’s a huge opportunity for smartphones,” Watsa says.
“BlackBerry is an established brand,
and we think BlackBerry will get its share.” He dismisses the
unfortunate events of last year as
the kind of short-term problems that any business undergoes
during a transition. As for RIM’s
delays and profit warnings, he says he simply doesn’t pay
attention to company guidance.
It’s tempting to assume Watsa is betting on a sale or a breakup
of the company. He denies this,
adding that he also does not want either Balsillie or Lazaridis to
be replaced. Doing so would
throw the company into worse peril. The pair’s
accomplishments, building RIM from scratch
into a multinational powerhouse, is proof they can manage
through the current malaise. “It’s one
of the most outstanding track records we have in Canada,”
Watsa says.
But the market at large no longer seems to care about that
record, nor about the company’s
success outside of North America. Patrick Spence, RIM’s senior
vice-president and managing
director of global sales and regional marketing, concedes some
of the perception problems are of

the company’s own making. “We haven’t communicated as
effectively as we should,” he says.
There are a number of issues the company would like the media
and the financial community to
better understand, such as that the BlackBerry is still the
bestselling smartphone in Latin
America, and that it recently became the No. 1 device in
Nigeria, Africa’s most populous
country. RIM is also gaining market share in parts of western
Europe, the Middle East and Asia.
And that growth is coming from consumers.
The idea that the BlackBerry is predominantly a device for the
office, which RIM has struggled
to shake in North America, isn’t nearly as strong abroad,
according to Spence. The BlackBerry
had been entrenched in the corporate world in North America
for years before the company
actively courted consumers, whereas it was already equipped
with consumer-oriented features
such as music and social networking capabilities when it
entered new markets more recently.
“In the U.S., what we need to do is show people that we are a
great choice for a consumer

smartphone as well,” Spence says. RIM is making a renewed—
and expensive—marketing push
in the U.S. to promote the latest line of BlackBerry 7 devices,
which debuted last year. It’s
unclear whether additional marketing will help when American
consumers haven’t been
enthusiastic about the new line so far. RIM expects to ship 12
million smartphones at most this
quarter, down from 14.1 million in the last one.
Another complication is just how many U.S. citizens will
purchase an existing BlackBerry when
RIM has promised an even better one is right around the corner.
RIM is slated to launch the
BlackBerry 10 line in the latter part of this year, which will run
a version of the QNX operating
system currently powering the PlayBook. In 2010, RIM
purchased QNX Software Systems, the
Ottawa-based company that created the operating system. For a
while, the work of developing
QNX for RIM’s products was done in isolation. Lazaridis may
have been applying the lessons of
a book called The Innovator’s Dilemma, published in 1997 by
Harvard Business School
professor Clayton Christensen. (Lazaridis has talked about the

book frequently at RIM town hall
meetings.) Christensen argues that innovative companies lose
their way because they become
encumbered by their existing customers. They need to devote so
much time to servicing these
clients that they’re unable to focus on the next big innovation.
Lazaridis, according to former employees, believes this is
essentially what happened to RIM. To
help solve the problem, Christensen recommends carving out a
team to work on whatever the
next innovation will be so it’s not beholden to the same rules
and thinking as the rest of the
organization. It’s not surprising, then, that the QNX team was a
separate entity. But theory and
reality are two different things. As pressure mounted and
workloads grew, RIM began moving
more employees over to QNX. Last year, the software
development teams were officially split
between those working on QNX and those servicing the existing
BlackBerry operating system.
Everyone knew the latter system was headed for obsolescence,
to be replaced with whatever the

QNX team developed. Those working on it wondered why they
were wasting time on a dying
platform. When some of the developers started leaving the
company, Lazaridis put the teams
back together in one department, overseen by a single vice-
president. It was an unfortunate
miscalculation that cost time and resources during a crucial
period for RIM.
The question now is how many more blunders shareholders will
tolerate. Some are already
seeking to loosen the influence of Balsillie and Lazaridis.
Northwest and Ethical Investments, a
Toronto firm, may seek a proxy vote to prevent the co-CEOs
from also serving as co-chairmen
of the board of directors if RIM’s board can’t provide adequate
justification for the governance
structure by the end of January. The Financial Post recently
cited unnamed sources saying the
board is considering appointing Barbara Stymiest, former COO
at Royal Bank of Canada, as an
independent chair to replace the duo.
Meanwhile, Toronto-based institutional investor Jaguar
Financial Corp. claims to represent a
consortium of investors who want leadership changes and a sale

or breakup of RIM. After the
company’s dismal third-quarter results in December, Jaguar
issued a press release specifically
calling for Stymiest and fellow board member Roger Martin,
dean of the Rotman School of
Management, to fulfil their duties and seek to restore
shareholder value. “Jaguar considers it
highly unlikely that the Board will cause a change in leadership
or a change in strategic focus,
unless Ms. Stymiest and Mr. Martin push for dramatic change,”
the release stated. A Wall Street
Journal report later quoted an anonymous source claiming that
independent directors on RIM’s
board have long deferred to Balsillie, “the most forceful
presence in the room by far.” The
insinuation is that Balsillie, along with Lazaridis, dominate a
weak and ineffectual board, thereby
preventing it from tossing them out.
Another possibility is the board doesn’t consider dramatic
change necessary. A clue to Martin’s
thinking, for instance, can be found in his latest book, Fixing
the Game. Martin lambastes the
philosophy that a company’s primary purpose is to maximize
shareholder value. Executives

spend too much time dealing with investors and analysts, trying
to meet or exceed earnings
expectations every quarter, and end up seeking short-term gains
at the expense of the company.
“We must shift the focus of companies back to the customer and
away from shareholder value,”
Martin writes.
The investors clamouring for change at RIM are most dismayed
by the 75% drop in its share
price. But while both revenue and net income are slipping, there
is debate over how much panic
is appropriate. The investors and analysts who support RIM
argue the extreme market reaction is
unwarranted. “Stock prices in the short-term have nothing to do
with intrinsic value,” Prem
Watsa says. “They reflect emotion.” (Years ago, Balsillie even
implemented a rule at RIM that
anybody caught talking about its share price would have to buy
doughnuts for everyone on staff.)
The board might have the same opinion, particularly when
Martin argues focusing on quarterly
earnings and expectations instead of customers is misguided.

Balsillie himself is guilty of inflating expectations. All year he
has claimed the BlackBerry 10
devices will “leap-frog” the competition. In October, he told
The Globe and Mail, “It is really,
really powerful how we’ve intercepted the future.” He can also
be hard to understand. In
response to a question in March about why RIM expects gross
margins to increase, Balsillie said:
“I’ll just be blunt. I mean, we have just really an outstanding set
of new product introduction,
which is cutting over new architectures. And the capability of
these, we haven’t talked about, but
it’s a major, major step-up.…So quite frankly, it’s a time of
cutting over and it’s a heavy cutting-
over time.”
His off-the-cuff remarks sometimes catch his own employees by
surprise. During a presentation
to financial analysts in May, Balsillie started discussing the
PlayBook, which had only recently
launched. The ad campaign was taking some heat for its
lacklustre nature, and some in the media
speculated it had to do with the departure of Keith Pardy shortly
before the tablet debuted. “I’m

just gonna go through some of the ad campaign,” he told the
audience. “I’ve taken over the CMO
reports, and feel very, very good in the ad strategies.” Balsillie
ostensibly assuming chief
marketing officer duties was news to some employees covering
for Pardy after he left, as well as
their subordinates. One employee sitting in the audience recalls
turning to a co-working and
exclaiming, “What the fuck?”
Some executives within RIM have encouraged Balsillie to rein
in his bombastic tendencies in the
past. “He’s a very proud guy. It’s pretty hard to tell him he
needs training in anything,” says a
former employee. But Balsillie may have relented somewhat.
His tone on December’s earnings
call was subdued, even contrite. There were no bold
proclamations.
At this point, what Balsillie and Lazaridis say matters little. The
most important task is to release
the BlackBerry 10 smartphones. If the devices fail to reignite
the U.S. market, the pressure to
remove Balsillie and Lazaridis from their roles as co-CEOs will
become more intense. It is a
scenario neither of them seems willing to consider. After

everything they have achieved, their
pride is understandable. The unshakable level of confidence has
been with them from the
beginning of their working relationship. In 1993, shortly after
joining RIM, Balsillie spoke to
The Kitchener-Waterloo Record. “It’s a bit conceited,” he said,
“but Mike believes there isn’t a
technology issue he can’t solve, and I believe there isn’t a
business issue I can’t stick-handle my
way through.” They’ll keep trying as long as they can, but
they’re running out of time.
Note: This story was updated on January 23, 2012, to reflect
breaking news regarding
leadership changes at RIM.

How management has failed at RIM Falling market share. P.docx

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