Why RIM's New CEO Is Unlikely to Succeed - Page 2

However, there was one distinct difference between Apple, which was increasingly leading the evolution of the smartphone, and RIM. That difference was the migration of demand from IT organizations to users. RIM largely remained focused on IT buyers. The market, following Apple's lead, started to evolve away from RIM's model and towards one that favored consumer-focused products over IT-focused products. The result initially was people carrying two phones, but as the iPhone gained more capabilities, the desire to have one device that played in both worlds drove buyers increasingly to Apple's model and away from RIM's.


This was accelerated by a decision made by RIM management to give in to requests from governments to provide some level of access for law enforcement and to identify government threats. While this level of access hasn't been fully disclosed, and others appear to have done the same thing, it created a cloud over one of RIM's strongest advantages, particularly against the growing Android platform, and that was security. In short, after these agreements became public, buyers no longer saw, for the most part, RIM's security as being significantly better enough to force employees to use that platform even over the comparatively more unsecure Android lines.


Finally, the company's other advantage, the consistent use of a hardware keyboard, wasn't reinforced in market and users took it for granted particularly when Apple effectively changed the default configuration for its smartphones to a design that didn't need a hardware keyboard. This effectively eliminated RIM's other big advantage and RIM dropped into decline.


Fixing RIM


To restore RIM, the firm has two paths and likely only enough resources to do one of them well. Either double down on IT and grow that market again or create a solution that consumers will prefer over the iPhone and Android phones. Both paths have a significant marketing component because RIM could build a competitive product, as Palm did with the Palm Pre, but if it fails as Palm did to build excitement and demand for it in either group, it is still done.


This suggests that rather than an engineer, RIM should have chosen someone who understands delivering products to consumers or someone who understands and can resource the reversal of the consumerization of IT trend that is killing its products. For the former, you'd likely do as IBM's Louis Gerstner did and pull from a consumer products company. For the latter, you'd pull from a company like IBM, which is fighting this trend successfully. Neither selection would be easy because the cultural differences in both extremes would make integrating the candidate difficult and thus you'd likely have to make some really hard tradeoffs.


Now, if, rather than trying for a perfect initial choice, you looked for a team (which is what you'd end up having to build regardless as even Apple wasn't successfully run by just Steve Jobs), having an engineer in that team wouldn't be a bad idea. This means that Heins isn't a disaster and he is a far better choice than Carol Bartz was for Yahoo because he at least understands RIM and can hit the ground running.


The critical next skill is marketing and here the same core requirements need to be met. In other words, the successful candidate must either understand how to bring a consumer product to market successfully or how to drive a campaign that both empowers IT again and makes them favor RIM's products. The two skill sets are vastly different.


Wrapping Up: Change for the Better?


On paper, this executive change is better in one way and that is it collects leadership into one person and drives change. However, change alone doesn't fix things much because changing direction when you don't know where you are going isn't likely to get you there any quicker. RIM needs to address either the elimination of IT as its core buyer or ride the consumer wave that Apple has created better than Apple does (because it has to catch up to Apple). Both paths are possible. IBM has demonstrated this with IT and moving around a dominant vendor is what Apple did to Microsoft.


But for either to be successful, the company will need to change perceptions and have products that are designed to be successful in the market chosen. That means strong, focused marketing talent that is adequately resourced and has some input into product design. This is rarely done in any company and Heins doesn't appear to have the background to recognize this need. This could hurt him in the end.

Add Comment      Leave a comment on this blog post
Feb 11, 2012 5:25 AM Steve Sasman Steve Sasman  says:

Astute commentary on the IT vs consumer market drivers of the success of Apple vs RIM.  I also think one of the main hurdles for RIM is just the overriding sentiment that they are toast, and their tech is old and past it's prime, almost like a pager - remember those?  Whatever they do, they better do it fast or be relegated to being a small niche player rather than the dominant force they once were.

Feb 11, 2012 8:19 AM Rob Enderle Rob Enderle  says: in response to Steve Sasman

Think they've already dropped into niche status, but agree, if they can't change the perception that they have failed they won't avoid that outcome.   


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