The Canadian company, Research in Motion (RIM) created a disruptive technology that set the world of mobile communication on a trajectory of innovation that continues to this day. So pervasive was the device in the hands of its owners, that it was often referred to as a “Crackberry” for how addictive it became. The dominance it held over competitors was impressive and seemed insurmountable – that is until Steve Jobs and Apple came along with their iPhones and then every other competitor got into the act with Androids and others flooding the market and superseding whatever advantages RIM once had over those other companies.
The bleeding is so bad at Research in Motion that they recently announced the elimination of 5000 jobs and a quarterly loss of over $500 million. Further exacerbating their troubles, they also admitted that the release of the Blackberry 10 smartphone will be delayed. These actions all taken in concert point to a firm that is reeling. Customer confidence and loyalty have eroded and the prospects of a successful turnaround are dwindling.
A recent article in Entrepreneur examined the reasons for the downfall of the once mighty company, and came up with the following reasons:
- Forgot or ignored their competition
- Leadership missteps
- Adapt to changes
- Remain focused
Forgetting there are Competitors
Just five years ago, RIM had 9 million global subscribers and had sold 20 million units. In spite of drawing the attention of business press, consumers, and being very public with their success – it did not occur to them that they were also attracting the interest of competitors who saw a market that was growing. Ignoring, or at least not responding as Apple began to plan their response; Blackberry units are now third in volume behin iPhones and Androids.
Leader vs. Co-Leaders
As with many technology start-ups, RIM was being run initially by two people (Jim Basillie and Mike Lazardis). As the company matured though, the need for a singular direction, voice, strategy, etc. became evident. However, the confusion raised by having to serve two masters created a hardship on the company that it only rectified within the last year when it went to a singular head.
Aside from the complexity of having the two co-CEOs in different offices and not having frequent contact, the different strategies that each valued were not always aligned and direct reports were often left uncertain of what was truly the highest priority, current strategy, or specific goals and metrics to pursue.
Change is a Constant
Because the company did not anticipate and react to change as quickly or successfully as needed, it is now in a position where under current CEO, Thorsten Heins, there is talk of selling off parts of the company. The loss of market share, revenue, and dwindling profitability has compelled the company to access savings and resources earmarked for other purposes just to meet expenses.
Focus on Core Business
One of the key lessons in the popular business book ”In Search of Excellence” by Peters and Waterman was “Stick to the Knitting.” By that, they meant that a firm built on strengths in one area should leverage that strength and not seek to expand beyond what it does best. Similarly, RIM’s owners attempted to parlay their expertise in mobile devices and went after non-essential businesses (the purchase of professional sports teams and various research institutions among them). When the Blackberry business needed direction and innovation the most, senior management was off seeking other ventures and lost focus on what made RIM the powerhouse it had become.
While most small businesses will not approach the size and stature of RIM, the lessons to be extracted are equally applicable to smaller firms. It is only a matter of scope that changes – not content or importance.