RIM co-CEOs step down
RIM has appointed a new CEO after increasing shareholder pressure and a poor financial performance in 2011. Thorsten Heins will take over as president and CEO, with former co-CEOs Mike Lazaridis and Jim Balsillie stepping down. Lazaridis will become vice chair of RIM’s board and chair of its new Innovation Committee and Balsillie will remain a member of the Board.
According to RIM, the appointment was made on the recommendation of Lazaridis and Balsillie, who had submitted a succession plan to the Board. The Board acted after conducting its own due diligence and the appointments are effective immediately.
“There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership,” said Lazaridis. “Jim and I went to the Board and told them that we thought that time was now. With BlackBerry 7 now out, PlayBook 2.0 shipping in February and BlackBerry 10 expected to ship later this year, the company is entering a new phase, and we felt it was time for a new leader to take it through that phase and beyond. Jim, the Board and I all agreed that leader should be Thorsten Heins.”
Heins joined RIM from Siemens Communications Group in December 2007 as senior vice president for hardware engineering and became COO for product and sales in August 2011
“It is Mike and Jim’s continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today,” he said. “I share that philosophy and am very excited about the company’s future.”
Heins said that RIM has a strong foundation on which to build. He said the Canadian Blackberry-maker has a strong balance sheet with approximately $1.5bn in cash at the end of the last quarter and negligible debt, and he reiterated that the company reported revenue of $5.2bn in its last quarter, up 24 per cent from the prior quarter.
“RIM earned its reputation by focusing relentlessly on the customer and delivering unique mobile communications solutions. We intend to build on this heritage to expand BlackBerry’s leadership position,” said Heins.
“As with any company that has grown as fast as we have, there have been inevitable growing pains. We have learned from those challenges and, I believe, we have and will become a stronger company as a result. Going forward, we will continue to focus both on short-term and long-term growth, strategic planning, a customer- and market-based product approach, and flawless execution. We are in the process of recruiting a new chief marketing officer to work closely with our product and sales teams to deliver the most compelling products and services.”
The new CEO has an uphill struggle ahead of him with stakeholders and observers alike expressing concern at the Canadian firm’s plight in 2011. Last year, a major shareholder in RIM, Jaguar Financial, called for the company to undertake a value maximisation process that could involve selling the firm. At the time, Jaguar chairman and CEO Vic Alboini said: “The status quo is not acceptable. It is time for transformational change. The directors need to seize the reins to maximise shareholder value before more market value is lost.”
Speaking to Telecoms.com last month, Bengt Nordström, CEO and president at consultancy Northstream, voiced his opinion that 2012 would be a very tough year for RIM.
“Sometimes when you’re pushing a certain concept, as RIM was pioneering smartphones with the BlackBerry – and then you miss the boat on touchscreens and the software around it – it almost becomes too late,” he said.
“One of its biggest challenges is how they make the BlackBerry app range compelling. In truth, they need to be successful with their efforts to support Android apps.”
David McQueen, principal analyst at Informa Telecoms & Media, advised that RIM should start over again with a clean slate.
“It’s almost worth them starting again and figuring out what they want to achieve; a bit like Motorola did and like Sony are starting to do now and Nokia did with Microsoft – start again.”
“Too many other companies are taking over. The key differentiators that they had: security, enterprise focus and the BBM platform, all are starting to be eroded, and now there are tools such as iMessage and What’s App, for example. Security is still an issue they can compete on but Samsung with Android are working on improving security in their devices and that just leaves expertise on the enterprise market; and they’re starting to lose all of that as well.”
Last week it was rumoured that Barbara Stymiest, who formerly served as a member of Royal Bank of Canada’s Group Executive and has been a member of RIM’s Board since 2007, would be appointed as the new CEO. However, she has been named the independent Board Chair.
Speaking on behalf of the Board, Stymiest said: “We believe that Thorsten is the right executive to succeed Mike and Jim. He has 27 years of telecommunications experience, including four years at RIM in senior management positions. As a Board, we have been impressed with his outstanding management skills, his leadership and his accomplishments within the company.”