RIM's Board Didn't Trust Outsiders To Run Company - InformationWeek
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12:37 PM
Eric Zeman
Eric Zeman

RIM's Board Didn't Trust Outsiders To Run Company

Research In Motion feared 'morons from the outside' would destroy the company, board member says.

Research In Motion's long-time co-CEOs, Mike Lazaridis and Jim Balsillie, stepped down from their leadership posts last month to allow a company insider, Thorsten Heins, to take their place. The decision didn't happen overnight--it took years, for a reason: there was no one else RIM's board trusted to get the job done right.

Speaking to The Globe and Mail, RIM director Roger Martin--who, by the way, is also the dean of the University of Toronto's Rotman School of Management--insisted that there's no way RIM would have given the CEO job to an outsider.

"I laugh at the vast majority of critics when they say, 'Oh, you should have made this CEO transition, like, four years ago,'" he said. "Yeah, right--like, to who?"

[ The co-CEOs are gone. Now what for RIM? See 5 Things RIM Must Do In 2012. ]

Martin seems to be implying that there was no one prepared to handle the challenges of being RIM's CEO until they stumbled onto Thorsten Heins. In effect, Martin says there was never anyone worthy of the post.

But why not hire from the outside, you might ask. After all, surely tapping the global job pool could find a laudable leader. Not so, says Martin.

"So we're supposed to hand it over to children, or morons from the outside who will destroy the company?" he said. "Or should we try to build our way to having succession?"

Obviously, RIM has chosen the latter path. Martin said that Heins didn't really become visible to the CEOs and the board of directors until last fall--and that it was Lazaridis' and Balsillie's decision to move on the transition once Heins emerged as a good fit.

According to Martin, RIM grew so fast so quickly, that it was unable to develop a deep and talented managerial base. Balsillie called Martin about five years ago about joining the board. The company was having trouble scaling internally and asked Martin for help.

"If we were to say to Jim and Mike [five years ago], 'Well, we're the board and you should go away now,' they would have laughed at us," said Martin. He firmly believes that there was no one internally or externally who could have replaced Lazaridis and Balsillie.

RIM's investors might disagree. The company's stock has lost more than three-quarters of its value in the last year as consumers and professionals (RIM's former bread and butter) switched to iPhones and Android devices.

Martin--who was fully of money quotes during his chat with The Globe and Mail--said RIM was astounded that people wanted such devices.

"People were saying we can't make powerful phones like Apple. Yes, we can, but we couldn't believe consumers would put up with that kind of battery inefficiency and that kind of network inefficiency."

Put up with it they have. Between Android and iOS, 500 million people have chosen less efficient but more powerful devices. Obviously, not everyone has the same priorities that RIM's management does.

Now that Thorsten Heins is in charge of the BlackBerry maker, does it have the right priorities?

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User Rank: Apprentice
2/16/2012 | 6:37:02 PM
re: RIM's Board Didn't Trust Outsiders To Run Company
"Research In Motion feared 'morons from the outside' would destroy the company, board member says. "
Stephen Elop strikes again ?
WW Thinker
WW Thinker,
User Rank: Apprentice
2/14/2012 | 10:39:18 PM
re: RIM's Board Didn't Trust Outsiders To Run Company
Though I am living in US for many years, I have been thinking of telling my daughter to attend the universities in Canada. Now, I can tick off University of Toronto especially the Rotman School of Management from consideration. Though I have not read through the whole interview transcript, the result of RIM reflects the capability and the business sense of the individual directors including Roger Martin on the board of RIM. In view of the hundreds and thousands of Canadian families ruined by the successive laid offs at RIM because of the failures of the so-called directors and the two CEOs, I would not trust my pension funds to whoever still invests in the RIM stock and trust the well-beings of my children to UT's Rotman School of Management.

"Anyone is replaceable" should be the principle by which a successful company operates. Whenever any individual fails to deliver her/his corporate duty, the exit door should be presented to such individual, after reasonable time were given for the fault to be rectified. RIM exemplifies how a company should not be run. HP is another example. Acer is another example....
User Rank: Apprentice
2/13/2012 | 9:01:04 PM
re: RIM's Board Didn't Trust Outsiders To Run Company
RIM board needs a good mentor. You can't sustain leadership with this type of leadership. Look at Nokia example where just change of CEO have such a great impact on company. RIM seems a lazy and self focused organization with unrealistic vision...do not talk about strategy it is based for monopoly market which doesn't exist. Innovation alone is not enough for business leadership and you need to maintain the excellence across the value chain. New CEO is singing the same same song and why this change if nothing is going to change in business. RIM need to understand that the phone are for customers with their needs.

If they thought the battery is issue then what did they do? Apple filed a patent for Hydrogen battery to resolve the issues. Only god can save RIM or any organization with such board!
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