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Why did RIM’s Executive VP of Global Sales quit his job?

Patrick Spence at BlackBerry World 2012
By Chris Umiastowski on 24 May 2012 11:10 am EDT
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* Update: Turns out Patrick Spence took the job of CCO at Sonos *

Patrick Spence worked at RIM for 14 years. His most recent position was Executive Vice President of Global Sales, reporting directly to the CEO. For a guy who is under 40, this is a prestigious position to hold. He climbed up the ranks at RIM quickly.

I've been a fan of Patrick. He was a visible public face for RIM. He has broad, global sales experience, and having held at least two regional VP positions (Asia Pacific and North Amercica) over his years at RIM.

So why did he quit? And what does it mean for RIM? I'm not sure what the right answer is yet. I chatted last night with a few folks who follow RIM closely and it seems everyone is still digging for the truth.

We know that Spence was recently promoted to EVP of Global Sales, reporting into the CEO. We also know that Thorsten Heins quickly announced the intention to consolidate all chief operating officer activities under one executive, rather than RIM's tradition of having multiple COOs. Spence knew that this would mean his position would report into the COO, not the CEO. Would this be viewed as a demotion? Or worse, did he want the COO job? It's entirely possible that he did, and left as a result of not getting the job.

But I'm still left wondering why he left. Does he believe in the future of BlackBerry 10? Does he believe RIM's market share will remain relevant in the industry? The fact that he's quit makes you wonder if, perhaps, he's not confident. And as an investor, I'd be foolish to ignore the signals put out by senior management departures. This is one of those signals.

Maybe he does still believe in the future of RIM but lacks financial upside? Former RIM executives that I've spoken to have suggested the company has become very sparse with stock option grants. Perhaps Spence's options are so underwater at this point that even a huge comeback by RIM wouldn't create much of a pay day? I wanted to find out the answer to this question before posting this editorial, but the SEDI website ( System for Electronic Disclosure by Insiders) wasn't cooperating. When we get the info we'll post an update.

Finally, we still need to understand if Spence's departure will hurt RIM. Again, this is not entirely clear. As much as I like Patrick, I don't know if he was an effective executive. He was in charge of global sales during the launch of BB7, which hasn't exactly been the blockbuster RIM hoped for. This doesn't mean he was responsible for the weak market demand for BlackBerry 7, to be clear.

I also question how much value a RIM lifer can bring to the company beyond a certain point. Spence's experience at RIM may now be more valuable to another company than it is to RIM. This is similar to how Jim Balsillie's value to RIM declined over time, to the point where many feel he did more harm than good.

While it's tough to draw specific conclusions about Spence's departure at this point, I see it as a situation where he either wanted a C-level job and didn't get one, or wasn't financially incentivized to stay, or lacked confidence in BlackBerry 10. Despite his rapid rise through the ranks at RIM, it's not always bad to get fresh blood at the executive level. But right now, on balance, I see this executive departure as a negative for RIM.

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Why did RIM’s Executive VP of Global Sales quit his job?

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Perhaps he just ran out of ideas and decided himself he was no longer of good use?

Personally, I think a regular change in the top is a good thing. If nothing else it reminds them they are there for a reason so need to continue improving.

Lastly, I am sure this will be said a zillion times. RIM needs BB10 to be the bees knees in terms of hardware and software. Couple that with some breath taking marketing and perhaps we will see BB back to its glory days.

Till then, I continue to hope BB10 is the ultimate hybrid of what iOS and BBOS can be.

Or perhaps the only real success he has had is in India and Nigeria...

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It is still unclear why he departed but what we do know is that RIM is undergoing significant structural changes as they prepare to deliver a critical new device/platform in six months.

The new CEO sees the world differently and has a very different style than the former ones. Subordinates often find it difficult to adjust to leadership changes.

Accountability could have been the issue as well. It is said that at RIM people that screwed up were not held accountable in the past and perhaps the new goals seemed a new challenge tha was too different.

I think RIM needs to make changes and so people leaving and coming to RIM are just part of that change.

To me the big change is well known. Thorsten Heinz is it and I agree with Kevin that he will be the transformative force RIM now needs. I am a huge fan of Mike Lasaridis because he is a genius and just a good man but it did seem like it was time to bring in a new CEO. Everything else, including VP positions will fall into place.

Because the feedback recieved would be polluted with PR responses as he has an obligation to protect the reasoning in the best interests of RIM. Employed by them any longer or not. Unless of course, you want the generic PR answer.

 "Personal reasons"

Patrick Spence was good but he got to where he did because he was Jim B's nephew. Now that Jim is gone, I think he saw the writing on the wall and didn't receive the COO position. He may pop up again somewhere with Jim.

If this is true, then the reasons for Pat's exit become pretty darn clear now. We could have saved ourselves the wild speculation.

Well, we're still crawling wit BB7 here in Brasil. Most carriers don't have devices to sell at all.

Maybe this was for the best...

Sounds like the perfect time for a VP Sales to quit if you ask me. If BB10 fails to sell, he won't be blamed and won't have another failure on his resume. It will be easy for him to explain poor BB7 sales: the product couldn't compete with the competition. But poor BB10 sales may be more difficult to explain. He's young and probably thinking about his future by weighing risk/reward.

A large point in the article is, if you are VP of Sales and you believe in your new product, you generally don't quit out of the blue.

If you DON'T believe in the new product, you get out quick.

"on balance, I see this executive departure as a negative for RIM."

On balance with what? Right not, no one (apart from Spence and others at RIM) know why he left and to say that is a negative in your view is not helping RIM or others who are waiting on BB10.

The reason I say this is because, for non blackberry users who might be following the progress of bb10 and looking to this site for information, saying "it is a negative" would lead them to doubt as well.

I think you should not have given your opinion until you knew exactly what and why.

I'm a blackberry user and you making that comment did not sit well with me at all.

Chris is a RIM shareholder and voiced his opinion from that perspective.

And he meant on balance with all the ideas he presented in the article.

Chris presented a variety of scenarios and then voiced his opinion. You seem to have latched onto one sentence that bothered you to the exclusion of the bulk of the article.

Chis does a good job of analyzing RIM, however this article is too much micro analysis on nothing.

If Alec Saunders quit, that would worry me.

You're right, I should have been more specific. I'm not downplaying the article as whole but that one statement.

What I'm getting at is there is no truth as yet and to give a negative opinion will have am impact on readers.

All I'm saying is he should have left his opinion for when he knew what was really going on like he first intended to. He could have just left it out until he had all the pieces to the puzzle.

The truth is that their VP of Global Sales quit, that is the event he gave a definitive opinion on which he views as a negative. I don't see how it can be viewed any other way.

When you are four or five months from launching a device that could be your last ditch effort to regain footing in the smartphone market, you do not want to lose an employee that has built up relationships with the partners you are going to need to push that device.

They have a new COO and CMO from outside the company who now have to hit the ground running without a key executive. It makes the job more difficult. That's all Chris is saying when he says it's a negative event.

The purpose of CrackBerry is not to pretend that there are no problems at RIM. If they approached every event at RIM as a positive move they would have no credibility at all.

If this would have been published on BGR, it is understood, but article based on rumors will impress negative marks on RIM...

Depends,
Now RIM has choice to hire better experienced person or some old RIM guy who was held back and have better ideas, plans and strategies..
..
Let's not make mountain out of a mole...
Wait and watch who fills the gap...

If some one is not productive and not helping in achieving company's current goal he should take rest unless he has better ideas.
.
You really can't empower some one based on relationships.
.
What RIM needs is group or very talented and goal oriented team.
.
I see this as a positive attitude.

Money talks. I think the statement in the article about his exp being more valuable to others than it is to RIM is money. RIM competition would love to have access to his global contacts as they move into that market.

He did not get COO, he went fishing for a bigger better deal elsehwere

I highly doubt there is as much a confidence issue with BB10 and there is with his pay cheque.

He's Balsillie's nephew!

He's reporting to Thorsten.

I think his ladder-climbing days are over at RIM because he doesn't have an ass to kiss anymore.

I think RIM is still tweaking BB10 to make it as perfect as possible. I don't think this reflects any doubt of BB10's future, but his reason for departure might be something completely unknown to everyone. I would not want to start any false rumors or speculate too much as an outsider, but with the stock trading well below it's true worth and potential, maybe Patrick Spence sees the possibility RIM will be bought out by a larger company leaving him without a job. Would he still benefit with his stock options if he left for another company? Just some thoughts.

If its true about Spence being Jim BS nephe then that really does say a lot.. Also other platforms would love to get where RIM is in the global market so yea he would definitely be more of an asset elsewhere.. (unfortunately)

Yet again, another excellent post Chris! I think this was a very balanced and speculative article. When I found out that Spence was leaving yesterday, I of course thought the worst and assumed BB10 may not be enough to save RIM.
But your post is balanced and gives 2 other equally viable reasons for his departure. I also appreciate your guts in addressing your concern about possiblity of BB10 not being good enough.. Especially on "Crackberry".
I will buy the first BB10 with a qwerty keyboard regardless.. But I do appreciate this well written, balanced and speculative post.
Thanks!

Kevin must be out of town again. No offense Chris but Kevin would have covered all the options and left out his opinion until he got an interview. I'm no stock holder or even a journalist but your opinion seems out of place in this article without some facts.

At this point on time, any commentary concerning the reasons why RIM's Executive VIP quit is purely speculation and conjecture.

The only fact that is available is that their stock prices dropped 3% when news of him leaving RIM broke.

Sounds more like he jumped before he was pushed.

An in-law of Jim B (as posted earlier), and based well away from the action in London.

He got the message.

When BlackBerry was the only game in town the inadequate marketing and sales folk at RIM didn't have to work too hard. As soon as competition came along they were left with no answers. As a result RIM's brand image has been devastated - at least in North America.

Financial analysts are a strange bunch. They whine about RIM losing sales volume in the US and then whine when the people responsible leave the company.

Sorry to be cruel but losing long serving people from sales and marketing at RIM is a positive not a negative!

Why did he leave?

"RIM sinks to an 8 year low" - that's why. He's a bright guy. Why stay on the Titanic when it's sinking?

And to all you nay-sayers ... just keep watching the stock price sink ......

The stock may indeed drop for a little while longer. However, maybe Patrick's going to work for Apple. If Apple bought RIM out at $27 a share, it would only cost one quarter of their earnings. Then they would have another niche on Google's android. This is not to start any crazy rumor, but if it happened, then Patrick could head up a senior spot with the Blackberry division at Apple.

" If Apple bought RIM out at $27 a share... "

I'm sorry, but on what planet exactly does a highly successful company pay more than 250% of the current stock price for a buyout...? Pat Spence has a better chance of becoming COO of Disneyland than the scenario you are spinning here.

In fairness google paid over double share price for motorola, which at the time was losing money left and right. Also HP spent a huge ammount on palm too. So ya, it 'can' happen at that % but that never means it will happen

This Spence guy's smarter than the Titanic musicians...

Oh, btw, $RIMM is now trading at a new -again- 52 week low of $10.57 and now has a market cap valuation of $5.8B

Chris is no delusional, he's just being paid to pump/hype RIM stock every now and then...

#RIMTANIC

Even the highly anticipated upcoming launch of the BlackBerry 10 device will not be enough to keep shares of Research In Motion Ltd. from falling below the $10 mark as the latest data shows the company’s smartphone market share has been cut in half over the past year, new research from Kris Thompson with National Bank Financial said.

At this point, investors are hanging onto RIM stock for the wrong reasons, Mr. Thompson said in a note to clients.

“Many investors continue to hold RIM stock on the way down hoping the company will achieve some shareholder value through a restructuring plan that could include selling assets, seeking joint ventures, licensing patents or opening its proprietary network to other vendors,” he said.

While some or all of these could happen some time down the line, RIM has already committed to the BB10 this year. As a result, investors are likely setting themselves up for disappointment.

“Our view is that investors will punish the stock below $10 per share on worsening fundamentals in the May and August quarter regardless of a potential BB10 resurrection in the future,” he said. “We’d continue to stay away from the stock over the summer and assess an investment in RIM later this fall.”

Meanwhile, RIM continues to lose ground against fierce competition. The latest survey data for the first quarter of 2012 shows RIM’s smartphone market share is now down to 7%, from 14% a year ago.

I think when you have a new CEO, a new leader, things change. What was believed in the beginning is different now. Thorsten has a different outlook on the future.Spence was in a BIG JOB, so he had to leave for a legit reason!

Spence is ambitious. He was passed over for C-Suite role. His stock options are deeply underwater. So C-Sutie role at Sonos looks promising to him.

Nothing wrong with new blood in sales leadership role.

Go back in time and see how the CrackBerryites wailed when Mick Kirkup left. And who did we get - Saunders? Talk about a huge positive.

Spence leaves and the wailing continues.

Believe it or not, RIM is still selling the 20-month-old Torch 9800 slider at full price over here in one of The major cities in Asia. Looks like RIM won't even bother to release this "newer" Torch 9810 slider refresh here by the looks of it. Heck, I won't buy a Torch 9810 now as it is no longer "new" model. I've done waiting for this model, now that BB10 models hopefully coming in end-2012.

So let's see, marketing mistake? Marketing head is now gone (one of the two former monkeys at the top of RIM).

Now Spence is gone, head of sales.

So let's hope that the new Marketing, and Sales key staff will be more competent !

And with excellent smartphones to back up marketing & sales fuctions!

In short, RIM needs to make a home run in almost every aspect to pull this off, good product, good marketing, and good sales. RIM, you've got your work cut out for you, and good luck!