RIM forms committee to investigate CEO roles as exec's open letter calls for change

Posted:
in General Discussion edited January 2014
Faced with strong pressure from investors and an open letter from an anonymous executive calling for a new CEO, BlackBerry maker Research in Motion has agreed to establish a committee to look into the company's executive and board roles.



RIM said in a statement Thursday that the committee would make recommendations on a corporate structure after completing its study, Reuters reports.



The decision is part of a deal with activist shareholder Northwest and Ethical Investments, which had filed a proposal for a vote on the issue. The mutual fund company, which owns close to 500,000 shares of RIM, has agreed to withdraw the proposal in light of the committee's founding.



The committee will consult NEI in "developing the specific terms of reference for this mandate" and will issue its report by January 31, 2012. RIM's board will have 30 days to respond.



An open letter



RIM's announcement comes the same day that BGR published an open letter allegedly from a "high-level" employee at RIM addressed to the company's Senior Management. Speaking frankly, the executive calls for radical changes to the company's strategy and management.



"I have lost confidence," the open letter begins. "While I hide it at work, my passion has been sapped. I know I am not alone ? the sentiment is widespread and it includes people within your own teams."



"We simply have to admit that Apple is nailing this and it is one of the reasons they have people lining up overnight at stores around the world, and products sold out for months," the letter continued. "These people aren?t hypnotized zombies, they simply love beautifully designed products that are user centric and work how they are supposed to work."



The executive went on to note that rival mobile operating system Android has a "major weakness" in that it will always lack "the simplicity and elegance that comes with end-to-end device software, middleware and hardware control."



"Rather than constantly mocking iPhone and Android, we should encourage key decision makers across the board to use these products as their primary device for a week or so at a time ? yes, on Exchange!" the letter continued.



The letter called new "heavy hitters at RIM" in software management, noting that competitors Apple, Google and Microsoft are "three of the biggest and most talented software companies on the planet." The executive described RIM's software teams as "demotivated" and "working crazy hours and still far behind."



The executive took a page from Apple CEO Steve Jobs' playbook and called for RIM's strategy to also focus on "the things you decide not to do."



"On that note, we simply must stop shipping incomplete products that aren?t ready for the end user. It is hurting our brand tremendously. It takes guts to not allow a product to launch that may be 90% ready with a quarter end in sight, but it will pay off in the long term," the letter read, pointing to Jobs' iconic 1997 keynote "for tips."



The letter pleaded with RIM's management to focus more on developer relationships and less on appeasing carriers and vendors. "There is no polite way to say this, but it?s true ? BlackBerry smartphone apps suck," the executive wrote. "Even PlayBook, with all its glorious power, looks like a Fisher Price toy with its Adobe AIR/Flash apps."



"Developing for BlackBerry is painful," the source said, comparing RIM's development platform to a "rundown 1990's Ford Explorer" and Apple's to a "shiny new BMW M3?just such a pleasure to drive. The letter also quipped that "Canadians are too nice," claiming there is no accountability at the company.



The letter also took issue with the company's focus on Adobe Flash and multitasking in its products. "25 million iPad users don?t care that it doesn?t have Flash or true multitasking, so why make that a focus in our campaigns? I?ll answer that for you: it?s because that?s all that differentiates our products and its lazy marketing."



The alleged executive characterized recent questioning of the company's dual-CEO structure as "warranted" and called the partnership between RIM co-CEOs Mike Lazaridis and Jim Balsillie inefficient. "Maybe we need our [former Google CEO] Eric Schmidt reign period," the letter's author suggested.



"Overconfidence clouds good decision-making," the letter continued. "We missed not boldly reacting to the threat of iPhone when we saw it in January over four years ago. We laughed and said they are trying to put a computer on a phone, that it won?t work.



"We should have made the QNX-like transition then. We are now 3-4 years too late. That is the painful truth? it was a major strategic oversight and we know who is responsible."

"Perhaps it is time to seriously consider a new, fresh thinking, experienced CEO. There is no shame in no longer being a CEO. Mike, you could focus on innovation. Jim, you could focus on our carriers/customers? They are our lifeblood."



The letter concluded by asking the company's management to "reach out to all employees" on how to make RIM better. "We?re all reading the news and many are extremely nervous, especially when we see people get fired. We need an injection of confidence: share your strategy and ask us for support. The headhunters have already started circling and we are at risk of losing our best people."



A quick response



The Waterloo, Ont., company quickly responded to the letter, finding it "difficult to believe" that an executive in good standing wrote the letter. "Regardless of whether the letter is real, fake, exaggerated or written with ulterior motivations, it is fair to say that the senior management team at RIM is nonetheless fully aware of and aggressively addressing both the company?s challenges and its opportunities," the company said.



RIM admitted that the company has recently concluded a "major business and technology transition" that took longer than expected. According to the company, the company has left behind a period of "hyper growth" in order to streamline its operations "to allow it to grow its business profitably while pursuing newer strategic opportunities." The smartphone maker sees itself as "in a solid business and financial position" with $3 billion in cash and no debt.



The company recently announced layoffs as sales, prices and profits have plummeted. Analysts described the company's recent financial performance as "when a disaster turns into a nightmare" and a "one-trick pony" whose one trick no longer works.

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Comments

  • Reply 1 of 36
    Understand their are openings at Burger King.
  • Reply 2 of 36
    cloudgazercloudgazer Posts: 2,161member
    John Gruber's take on this is great
  • Reply 3 of 36
    anantksundaramanantksundaram Posts: 19,046member
    January 31, 2012?



    It might as well be January 31, 2112 in this business!
  • Reply 4 of 36
    jimdreamworxjimdreamworx Posts: 1,063member
    Half a million shares of RIMM?



    Poor losers - literally!
  • Reply 5 of 36
    anifananifan Posts: 25member
    The writer of that letter is my hero. And how is $3 billion impressive when Apple has more cash than the GDP of quite a few countries?
  • Reply 6 of 36
    apple ][apple ][ Posts: 8,428member
    This is just natural selection taking place. Those species and companies that can not adapt to their environment die out and eventually become extinct. Such is life.
  • Reply 7 of 36
    anantksundaramanantksundaram Posts: 19,046member
    Quote:
    Originally Posted by cloudgazer View Post


    John Gruber's take on this is great



    1) What's your take?



    2) Who's John Gruber and why should we care?



    3) If we should, why don't you summarize his 'take' for us?
  • Reply 8 of 36
    anantksundaramanantksundaram Posts: 19,046member
    Quote:
    Originally Posted by Apple ][ View Post


    This is just natural selection taking place. Those species and companies that can not adapt to their environment die out and eventually become extinct. Such is life.



    Or death, as it were......
  • Reply 9 of 36
    apple ][apple ][ Posts: 8,428member
    Quote:
    Originally Posted by anantksundaram View Post


    2) Who's John Gruber and why should we care?



    He's the moron who people can thank for starting the whole trend of idiotic iPad retina display comments that other morons like to endlessly repeat.
  • Reply 10 of 36
    diddydiddy Posts: 282member
    Quote:
    Originally Posted by anantksundaram View Post


    1) What's your take?



    2) Who's John Gruber and why should we care?



    3) If we should, why don't you summarize his 'take' for us?



    1) My take is the same as Gruber’s. I agree with him 100%

    2) This guy.... He is very insightful and gets quoted a lot in the tech industry.

    3) I’ll do one better.



    Cite

    Quote:

    So they have a plan, to create a committee, which will conduct a study and produce a report. Well then, problems solved.



  • Reply 11 of 36
    anantksundaramanantksundaram Posts: 19,046member
    Quote:
    Originally Posted by diddy View Post


    1) My take is the same as Gruber?s. I agree with him 100%

    2) This guy.... He is very insightful and gets quoted a lot in the tech industry.

    3) I?ll do one better.



    Cite



    Wow. I am blown away! Such insight!
  • Reply 12 of 36
    anantksundaramanantksundaram Posts: 19,046member
    Quote:
    Originally Posted by Apple ][ View Post


    He's the moron who people can thank for starting the whole trend of idiotic iPad retina display comments that other morons like to endlessly repeat.



    Thanks. That's what I was trying to recall.
  • Reply 13 of 36
    cloudgazercloudgazer Posts: 2,161member
    Quote:
    Originally Posted by anantksundaram View Post


    Wow. I am blown away! Such insight!



    It made me laugh, your mileage may vary.
  • Reply 14 of 36
    bilbo63bilbo63 Posts: 285member
    They ought to make that executive the CEO.



    I know several people who work at RIM and that letter is spot-on.



    I'm hoping that RIM can turn things around, but based on their reply, that is not likely. They've "completed a transition" have they? Seriously? With what product, exactly? The Playbook has promise, but was shipped too soon and half baked. When was the last time they shipped a truly new phone that was a hit... not in the last year.



    I'm not against RIM in any way, but this guy said what needed to be said. He'll more than likely be unemployed by Monday if he isn't already. He'll likely also have another job by Tuesday cause he knows of what he speaks.



    Jim and Mike... The fish stinks from the head down. In this case the heads down.
  • Reply 15 of 36
    MacProMacPro Posts: 18,141member
    Quote:
    Originally Posted by Bilbo63 View Post


    They ought to make that executive the CEO.



    I know several people who work at RIM and that letter is spot-on.



    I'm hoping that RIM can turn things around, but based on their reply, that is not likely. They've "completed a transition" have they? Seriously? With what product, exactly? The Playbook has promise, but was shipped too soon and half baked. When was the last time they shipped a truly new phone that was a hit... not in the last year.



    I'm not against RIM in any way, but this guy said what needed to be said. He'll more than likely be unemployed by Monday if he isn't already. He'll likely also have another job by Tuesday cause he knows of what he speaks.



    Jim and Mike... The fish stinks from the head down. In this case the heads down.



    The question is how can they turn it around .... With what? They would need a Jobsian scale paradigm shift.
  • Reply 16 of 36
    bilbo63bilbo63 Posts: 285member
    Quote:
    Originally Posted by digitalclips View Post


    The question is how can they turn it around .... With what? They would need a Jobsian scale paradigm shift.



    Agreed.



    The longer that the co-CEO's remain defensive and in denial, the less likely it will ever happen. And that would be a shame. Their own high-ranking executive's suggestions might be a good place to start though. Trouble is they're not listening.



    An investigative committee? Why didn't you say so? Problem solved.



    The Powerpoint Presentation and pie graphs will be ready in August of 2014."
  • Reply 17 of 36
    nvidia2008nvidia2008 Posts: 9,262member
    Quote:
    Originally Posted by Apple ][ View Post


    This is just natural selection taking place. Those species and companies that can not adapt to their environment die out and eventually become extinct. Such is life.



    This seems like some sort of accelerated natural selection, akin to doomed dinosaurs actively looking for cliffs to jump off.



    "RIM said in a statement Thursday that the committee would make recommendations on a corporate structure after completing its study, Reuters reports.



    The decision is part of a deal with activist shareholder Northwest and Ethical Investments, which had filed a proposal for a vote on the issue. The mutual fund company, which owns close to 500,000 shares of RIM, has agreed to withdraw the proposal in light of the committee's founding.



    The committee will consult NEI in "developing the specific terms of reference for this mandate" and will issue its report by January 31, 2012. RIM's board will have 30 days to respond."




    The irony is so thick I can take a big scoop out of it and eat it like ice cream. This is exactly the nonsense the open letter talked about:



    1. No one willing to take charge and kick ass. Assembling a committee to study and then make recommendations is ridiculous this late in the game.



    2. A deal with activist shareholders. The open letter mentioned pandering to carriers and other parties rather than focusing on the end user and end user experience. Again, at this critical juncture, the end user is the most important. Any sensible shareholder will recognise that.



    3. Timeliness. January 31, 2012? Really? I mean, really? Over six months? This corporate disaster seems to be writing itself.



    The open letter really describes a textbook case of a technology company that has lost its way. Nokia definitely seems like a raging bull compared to this donkey.



    I'm really not a BlackBerry hater, I just didn't think it was this bad. I often refer to the time Steve Jobs said in the conference call in October last year that "We now passed RIM, and we don't see them catching up in the foreseeable future". At the time, I thought it was some typical Apple hype, oddly expounded on a conference call rather than in a keynote or press gathering. In any case, it's still amazing, Steve Jobs and I'm sure tons of RIM employees saw it back then.



    And particularly this year, when a "Co-CEO" basically talks unintelligible gibberish (literally, look up his comments... they make virtually no sense at all)... you know something is off.
  • Reply 18 of 36
    bilbo63bilbo63 Posts: 285member
    Yeah RIM's response actually validates what the executive was saying.
  • Reply 19 of 36
    nvidia2008nvidia2008 Posts: 9,262member
    Quote:
    Originally Posted by anantksundaram View Post


    1) What's your take?



    2) Who's John Gruber and why should we care?



    3) If we should, why don't you summarize his 'take' for us?



    1) What's your take?



    2) Why should we care? (Okay, let's assume we do)



    3) If we should, why don't you summarise your "take" for us?



  • Reply 20 of 36
    As Ross Perot (remember him?) once said pithily during a US Presidential debate: "If you see a snake, just kill it - don't appoint a committee on snakes."
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