Monday, January 9, 2012

RIM is an ongoing lesson in management failure

Having watched Nokia self-destruct due to executive incompetence, the higher management of Research In Motion should have been alert that a similar fate could befall other handset manufacturers.
But a side effect of arrogance, as was seen with Nokia, is to remain stubbornly blind to what is happening around you. The fact that RIM's price plummeted 75 per cent in 2011 and its lamentable approach to new products--its PlayBook is a notable disaster--should have been warning enough for RIM's joint chairmen and its board of directors.
What also surprises me is that RIMs non-executive directors and institutional investors let this down-sliding continue for so long without sweeping away the management responsible for this debacle.
Only now are the chief architects of RIM's downfall, co-chairmen Mike Lazaridis and Jim Balsillie, being positioned for removal having been widely criticised in recent years for their lax approach to driving the company forward. Perhaps the weight of Lazaridis and Balsillie being the second and third-largest shareholders in RIM proved to be a barrier to accepting the dire state the company was heading for.
Altogether, RIM is in a very sorry position for a company that was once a benchmark for product innovation and the delivery of services that delighted its subscribers. If market chatter is to be believed, then the notion that RIM may licence its forthcoming BlackBerry 10 operating system software to companies such as Samsung, HTC and others, could indicate that someone within RIM is trying to stop the rot.
There are even rumours of RIM being sold--but who would buy it and for what reason?
There are three players with the necessary resources and ecosystem to withstand the rigours of competing in the smartphone sector: Apple, Google and Microsoft. RIM has lost its highly lucrative corporate email niche to other platforms that now offer much more, and RIM has proven it cannot compete with the pace being set by these three industry heavyweights.
What RIM cannot afford to do is take a"‘head-in-the-sand" approach. It must face reality--that Nokia moment, perhaps--and realise the world has moved on and take the radical and harsh decisions necessary for RIM to survive.
But I fear that the existing management will attempt to stifle any internal insurrection and continue to muddle along in their prescribed manner--striding purposely sideways, blinkers firmly attached.


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