So here we are, after two full days of digesting the RIM CEO switchover to Thorsten Heins. The stock declined almost 13% in that time, although it's recouping some of that loss today.
A few weeks ago I got an email from a friend. There were rumors of a change of leadership on the board of directors and the market was reacting positively. The email from my friend said, "Wow, imagine what kind of reaction we'd get if Mike and Jim stepped down!"
It seemed logical enough to me. Investors wanted change and the rumors were causing investors to cast stock market votes with their dollars. So when the news broke on Sunday night, I thought we'd see a positive reaction when the market opened on Monday.
I wanted to write this article to address the problems that Wall Street has with the changes that RIM has made. I'll offer my perspective, and I'll raise some questions that I have.
First of all, the Street wanted to see more drastic change. I read more than a handful of analyst reports from my former competitors. Almost everyone wanted to see an outsider brought in to take on the CEO role.
I feel it's important for the incoming CEO to understand the real issues going on at RIM. He needs to understand the problems with the corporate culture, yet not be a part of the problems that go back 10+ years. Thorsten stepped into his first role at RIM when the company had already peaked. The culture was well established. To me he is an outsider who spent 4 years inside the company learning about its issues.
In my opinion, the biggest issue at RIM has been the company's unwillingness to demand more from itself. Much more. Many analysts point out how Thorsten was in charge of handset engineering, and how he must have therefore have been a contributing factor to RIM's problems. But I think we all realize the real problems have been related to software, top-level product vision, and ecosystem development. Those are not handset engineering problems.
I have a ton of respect for Mike and Jim. But what I think doesn't matter. There was a cultural problem and a large number of employees and former employees believe that the former Co-CEOs were at the heart of the problem. Regardless of how effective Mike and Jim were in building RIM to a $20 billion dollar company, it seems to us that the community of employees is energized by the fact that there is new leadership at the top.
RIM was a manage-by-consensus company, and all disagreements floated to the top. This was not healthy. It was also not healthy to have a culture where you were either part of Mike's organization or Jim's organization. Simply eliminating the Co-CEO structure looks like it will be helpful to getting things done at RIM.
The second major argument made by Wall Street is that Thorsten intends to simply maintain the company's existing strategy and not make any drastic changes. I admit that in his introductory videos and interviews (watch below) he could have pleased analysts more by spending time discussing his straight-up views on where RIM needs to improve. Thorsten showed a lot of excitement for the future, but if you read between the lines he did make some pretty easy-to-spot comments about where he sees RIM needing to change.
I don't think RIM would benefit from drastic changes in strategy. It could benefit from drastic changes in leadership beyond the CEO level, and it would certainly benefit from drastic improvements in execution ... but strategy? I don't think so.
I've seen analysts say that RIM should ditch BB10 and adopt Android. And in the exact same article I've seen the same analyst say that RIM should license BB10? WTF?
Let me lay my opinion clearly on the line here. If RIM adopts Android and dumps BB10 they are done. Over. Finished. It will never happen. Can you imagine how long it would take to forklift everything they've build to make it work on Android? And they'd have to completely give up control over the OS to Google too? Yeah, that sounds like a wonderful change in strategy.
Sometimes drastic is dumb.
I'm really anxious to see what kind of moves Thorsten makes. Who will lead the hardware engineering team now? Who is really in charge of software engineering at RIM now? Will they make additional executive changes surrounding the cloud infrastructure? I feel that RIM has some incredible opportunities to leverage its network infrastructure but they have been moving far too slowly, almost as if they've been waiting for Apple to come along with iCloud and cause them pain.
I don't know who could have been the alternative external CEO for RIM. But I do know that Thorsten is an improvement over what has been happening at RIM. I look forward to watching him work.
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