Canada's Financial Post is reporting that the long anticipated reorganization of BlackBerry maker Research In Motion (RIM) might be coming about before the end of this month, and that co-CEOs Jim Balsillie and Mike Lazaridis will be replaced by current board member Barbara Stymiest. This change is coming about no doubt in response to investor complaints which came to a head last June, when Northwest & Ethical Investments withdrew its shareholder proposal for the company to split its dual-CEO structure, apparently after reaching an agreement where the company agreed to form a committee to study its leadership and examine the importance of the chairman post.
It's hard to find anyone who wouldn't agree it's time to put an end to the long-running train wreck that has been RIM for the past few years, but I'm not sure this is a move in the right direction. Ms. Stymiest, 54, has served RIM's board since March 2007, which to my mind makes her complicit in this tragedy; she has been in a director's role while Mike and Jim “rode this baby down”. Until her retirement in 2011 she was Group Head, Strategy, Treasury and Corporate Services at the Royal Bank of Canada. Like the majority of the directors she is an accountant and with an HBA from the Richard Ivey School of Business, University of Western Ontario and FCA from the Institute of Chartered Accountants of Ontario.
Ms. Stymiest is no doubt accomplished and previously held the position of Chief Executive Officer at TSX Group Inc. that runs the Toronto Stock Exchange. Prior to that she was Executive Vice-President & Chief Financial Officer at BMO Nesbitt Burns, and she was the youngest Partner at Ernst & Young LLP at the age of 30. Clearly Ms. Stymiest is not someone to be taken lightly, but her accomplishments are all in the area of finance. Unless RIM's primary strategy is to sell themselves to the highest bidder, I don't see how this appointment could help things very much.
RIM is a technology company in desperate trouble and whose marketing has been about as effective as Mahmoud Ahmadinejad’s attempts to convince the world Iran is only interested in a nuclear program for "peaceful purposes". However, if you look at all of RIM’s directors you see much of the same--accountants and consultants, and many from the Harvard Business School. Jim Balsilie's a Harvard MBA and a Chartered Accountant with a Bachelor of Commerce degree from the University of Toronto. He also holds an FCA from the Institute of Chartered Accountants of Ontario.
David Kerr, 67, who has been a director since July 2007 has a B.Sc. from McGill University, and is what else, a Chartered Accountant. He is Managing Partner of Edper Financial Corporation, an investment holding company. Claudia Kotchka, 60, who joined the board in July 2011 is billed as "an independent consultant to Fortune 500 companies on innovation, strategy and design", and is what else, a Certified Public Accountant.
Roger Martin, 54, is a Harvard man, undergraduate and MBA, and is Dean and Professor of Strategy at the Joseph L. Rotman School of Management at the University of Toronto. Mr. Martin was formerly a director of Monitor Company, a Cambridge, Massachusetts-based consulting firm.
John Wetmore, 61, has been a director since March 2007. He has a Bachelor of Mathematics from the University of Waterloo, Mike Lazaridis's school, and like me went to Kellogg School at Northwestern only in the Advanced Executive Program. Mr. Wetmore is the former Chief Financial Officer of IBM Canada.
Besides Mr. Lazaridis, the only guy that seems to have a technology background is Antonio Viana-Baptista, 53, who has been on the board since 2009. His Masters degree from the Universidade Catolica Lisbon is in Economics, but he also has an MBA from INSEAD. Prior to his retirement in 2008, he held executive roles at Telefonica including General Manager, Chief Executive Officer, Telefonica Spain; Chairman and Chief Executive Officer, Telefonica Moviles and Telefonica International.
Now if RIM could "count" its way out of trouble, they certainly have the talent to do it. However, it has recently taken a loss of $485 million write down on unsold PlayBooks, reduced the price for the entry level BlackBerry model to $299, forecast fewer unit sales for next quarter, and consistently missed on critical delivery dates for upgrades like BlackBerry OS 7 handsets, PlayBook 2.0 software, and the long-awaited BB 10 software (formerly called "BBX" until someone figured out that name was taken).
What RIM needs is a strong, focused leader with a background in technology and marketing. The problem may be that the best-qualified executives took one look at RIM and either saw a mountain too high or an opportunity that could only sully their reputations. When the story is finally written I think it will show that RIM had a leading-edge, iconic product that gave them an amazing franchise for a few years, but a leadership that simply couldn’t take them to the next level as the next wave of devices led by Apple's iPhone began to take hold. That is indeed a shame because I know quite a few wonderfully talented people at RIM, and they (along with RIM's investors) will be bearing the brunt of Mike and Jim’s mistakes.
If you do come away with the job Ms. Stymiest, you can count on one thing: You'll need a full measure of good luck.
