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RIM Needs a New, New CEO

Thorsten Heins has been CEO at {complink 4644|Research In Motion Ltd. (RIM)} for less than 48 hours, and yet it's clear the company must start searching for a replacement immediately. Heins's background wasn't inspiring, and his first words during a conference call at which he indicated no plans for any “drastic changes” were a dramatic letdown.

The appointment of a new CEO on Monday should have lifted RIM, and initially the stock price bubbled up 6 percent before it became clear Heins wasn't exactly suited for the job. He joined RIM from {complink 4929|Siemens AG} where he was chief technology officer of its communications business, not exactly the best proving ground for the head of a consumer electronics company. This could have been overlooked had Heins not compounded the problem by giving the impression RIM doesn't need a comprehensive makeover in the face of grinding market share losses to the iPhone from {complink 379|Apple Inc.} and {complink 2294|Google} Android-based phones.

Neither Mr. Heins nor the folks who appointed him understand the severity of the danger facing RIM. Jim Balsillie and Mike Lazaridis, the former co-CEOs and co-chairmen of RIM, are planning to stick around. Balsillie remains a director while Lazaridis stays on as vice chairman — an absurd title (after being co-chairman) that reinforces the belief the board is deaf to the market's clamor for a new beginning.

Lazaridis and Balsillie don't seem to get it, so let me say it plainly here: Investors don't want you around anymore. They demonstrated this clearly by driving down RIM’s stock price more than 8 percent after the changes were announced.

It's time to go guys. So, please go far away and take Heins and the clueless board of directors with you so somebody else can figure out how to rescue this company.

22 comments on “RIM Needs a New, New CEO

  1. dalexander
    January 24, 2012

    Bolaji, Recently I saw a program that featured RIM product being the dominant mobile phone in Indonesia. What did they do there that they have not done in other less profitable territories?

  2. Houngbo_Hospice
    January 24, 2012

     

    ” What did they do there that they have not done in other less profitable territories? “

    @ Douglas Alexander 

    That is what the new CEO would have to figure out very fast; but RIM needs to make a come back in the developed countries market to remain  viable.  

  3. Houngbo_Hospice
    January 24, 2012

    Obviousely, that was not the change that the market was expecting, but it seems that the former Co-CEOs Jim Balsillie and Mike Lazaridis still think that they are useful to the company and they will continue to heavily influence Heins's decisions. This way it would indeed be difficult for the company to make tournaround that would be necesary for its viability.

  4. Nemos
    January 24, 2012

    I liked the fact that you don't hide your words, and you say the things as it is, like a last SOS call. However, how we can judge negatively a CEO that he has only 48 hours as a chief ?  

  5. Houngbo_Hospice
    January 24, 2012

    “However, how we can judge negatively a CEO that he has only 48 hours as a chief ? “

    @Nemos:

    You are right, he should be given time to prove himself. The problem is that as soon as he was appointed,  RIM  shares fall . We would have expected better tidings, don't you think?

  6. itguyphil
    January 24, 2012

    It sounds like they did a great job of either user or industry adoption in the region. Seems like people caught on to the idea of using/enjoying the handsets.

  7. bolaji ojo
    January 24, 2012

    Douglas, RIM is actually selling very well in other developing countries and especialy in Asia and Africa. The company is doing very well in Indonesia and elsewhere simply because the hottest competitor hasn't arrived yet. RIM has lost market share in the West because Apple and Google Android phones entered the sector. Once Apple and the rest of the competition get into Indonesia, RIM would lose again.

  8. bolaji ojo
    January 24, 2012

    Nemos, Hospice puts it well. RIM is in urgent need of a radical reform and the market understands this. They would have given the new CEO time to prove himself except that he started by saying he didn't think RIM had a need for any “drastic changes.” Well, why are the two co-CEOs and co-chairmen stepping down? That's already a major change after months of opposition to the idea by the two men.

    Further, Thorstein Heins, the new CEO has been with RIM for about four years and was previously chief operating officer, which means he agrees with the actions taken so far by his predecessors. The two ex-CEOs are also staying on in one form or the other. When Jerry Yang left Yahoo, he moved on and resigned all his positions. These guys are still intending to stay around.

    Of course, you are right. You need more than 48 hours to prove yourself in a job but from experience, I can tell you the market (investors) has a way of getting this thing right and they don't seem to be in agreement with the appointment.

  9. bolaji ojo
    January 24, 2012

    Hospice, The RIM ex co-CEOs have handed power to a new CEO but they are holding tightly onto the leash. The positions they are keeping on the board of directors, coupled with their history with the company, seem to indicate they probably will be pulling the strings behind the scene.

  10. prabhakar_deosthali
    January 25, 2012

    It is true that wherever the Apple or Android phones have reached , RIM has lost its market share. In India Samsung Galaxy Smart phones have become much popular with the younger generation and compared to Apple they are cheaper also. These are replacing the Nokia and Blackberrys

    RIM still does not seem to take congnizance of its competitors.

     

  11. Daniel
    January 25, 2012

    Bolaji, you are right. They had lost their market shares in west and in most of the Asian and Middle Eastern countries. As we know in most of the Middle Eastern and Asian countries, government has interfered their blackberry service due to certain security concern. That pops a wrong command that, most of the terrorists are using blackberry service. This pave the way for other competitors to capture the market space with android based smart phones. I think in these areas, Samsung is the major beneficiary.

  12. Himanshugupta
    January 25, 2012

    Bolaji, i agree that RIM should follow YAHOO's lead and let Hein's give somewhat complete control. If there are people interfering on his decisions then he cannot steer this ailing ship.

  13. JADEN
    January 25, 2012

    Though much is expecting of the new RIM CEO, and it's too early to measure his worth.  I watched his introductory video on blogs.blackberry.com, actually he sounds unconvincing in everything. In quote “We are a great innovative comapny, but sometimes we innovate too much while we are building a product”.   Does that mean RIM should stop coming up with ideas or what?

  14. JADEN
    January 25, 2012

    @ Douglas Alexander,

    Blackberry dominate most developing countries where they found it affordable expecially in Africa, and where the technology has not really gone in advance like United States.

  15. Anne
    January 26, 2012

    I expected RIM to have sourced for an outsider as CEO not someone internal.  The danger I see is that Thorsten Heins will likely carries on business as usual and carries on in his old bosses footsteps, which may not bring about the change they need to turn things around. His standing relationship with former CEOs may limit his ability to pursue a bold new strategy for the company if at all he has one.

  16. Anne
    January 26, 2012

    @ Bolaji,

    Going by Heins qualifications, does he has experience in consumer tech to formulate a robust vision for the RIM's future?

  17. t.alex
    January 26, 2012

    Who is the best suite for RIM CEO? I think stealing someone from Google or Apple might help.

  18. Mr. Roques
    January 26, 2012

    They need to go back to thinking like a small company trying to create an interesting product… just like they were a few years ago. They think what they have will last… but it wont.

    I want to know who is giving them the news and data that makes them think they are doing alright? Probably the same consulting firm that Classmates.com has (http://www.theonion.com/articles/classmatescom-employees-dont-have-heart-to-tell-ce,6710/)

  19. dalexander
    January 29, 2012

    As it turns out, my friend from Indonesia was visiting today so I peppered him with a bunch of questions about RIM. He is a technologist and very business savvy. He said almost everybody has a Blackberry, even elementary school kids. He said Apple was there but the iPhone was too expensive for everyone. The biggest reason is the commonplace question people ask each other and the low, low device rates. When an Indonesian meets another Indonesian, early in the conversation, the question ” so, what is your PIN number?” surfaces. The connectivity of RIM users is virtually universal and expected. The subscriber rates for unlimited everything is $10 per month. I asked him if these were cheap phones and he said that many of the Blackberries were refurbished phones from Europe. These sell for about $180.00 and introductory services rates are free for the first three months. So, the barrier to entry is knocked down. He said the dealers can't discount Apple phones and carry the low service rates too. He did say that Samsung is gaining entry because they have cheaper phones, but services are higher because there is no money left for the dealers unless they hike Samsung related service cost. He also said that he roamed 9 countries for an additional $2.50 month per country. That got him unlimited services everywhere. Oh, before I forget, the PIN is a six place alphanumeric code that is absolutely secure and is unique to each phone for use as IM. So, low service rates, as low as recently offered for unlimited at $5.00/month seems to be key to RIM 's strategy in Indonesia. Add low cost, full featured refurbished phones, and you have a nice formula for market desirability …price and features.

  20. bolaji ojo
    January 29, 2012

    Douglas, Your friend's point about the affordability of RIM's BlackBerry phone is noted and he makes a convincing case as far as the consumer is concerned. The problem, though, is this: Apple had about $13 billion in net income in the December quarter on sales of $46 billion. Apple's income in that single quarter is far above RIM's total market value of about $9 billion today.

    The truth is that while customers in the developing economies may prefer BlackBerry today, it's really not a winning strategy for the company because it is then king of the low-margin market while Apple runs away with the higher margin end. Volume is great when it comes with a fat margin, not when it is starved of profit. RIM had profits of $265 million in its last quarter. That doesn't put it in the same league as Apple.

  21. ahdand
    January 29, 2012

    I think Apple would be the ideal place. Even someone from Microsoft would fit in.

  22. Wale Bakare
    February 3, 2012

    RIM is going through big storm the like of Apple experienced of in the past. Apple had gone through so many revival series courtesy of late Steve Jobs, Guy Kawasaki, former Apple's Macintosh evangelist, and designer Jonathan Ive, current Apple Senior Vice-president of Industrial Design and few more.

    I believe Heins is capable of turning things around at RIM he's experienced guy, he has eyes for strategy and innovations. If you dont have MBA degree certificate, does it makes someone non-visionary leader? I have to applaud Heins for his quick realisation of mistake his predecessor made in the past.

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