Research In Motion’s collapse can be traced straight to the top of the company, where its execs are woefully out of touch with consumers, says a former employee who wrote us last night.”The problem is that they brim with hubris regarding their success in the corporate market and are culturally blind to the gaping holes in their armour regarding consumer. They honestly think they understand consumer product, business, mentality, marketing – but they really don’t,” says our source.
This isn’t a disgruntled former employee, either. He says, “RIM is a very professionally run company with hard working and relatively motivated people.” He thinks it still has a “real shot” at pulling through if it can make its new OS work, and argues “they are not dead at all,” and investors are underestimating the company.
Here is an edited version of our source’s note on the company:
“RIM is a great company that has exceptional potential, though they are going through a rough time and the market is right to punish them for some poor decisions, they have far more going for them than one would surmise from the recent media deluge. But their problems really stem from underlying cultural issues, and a failure to recognise the kinds of people required for addressing the consumer market. It is ironically their success in the business domain and their growing fortune that has shielded them from self-criticism.
CEO Jim Balsillie’s occupation of the ‘Chief Marketing’ position is evidence of one of the ongoing tragedies of the company and arguably Jim’s inability to find someone for this role of vast importance is evidence of an underlying failure to grasp just how important this ‘marketing’ issues is especially in the context of the consumer space. Of course, they do have an excuse in that their otherwise very able and capable marketing staff has been operationally effectively in leveraging carrier marketing dollars in lieu of their own – ironically, the strengths and capabilities derived from this ‘channel’ style marketing activity, which has made them billions – has left a dearth of talent in the areas of direct consumer marketing, and even worse – this ‘outsourcing’ of their marketing activities has left carriers to position BlackBerry as they see fit, leaving what is on the whole a rather incoherent and fragmented branding message to the end consumer. Their recent efforts with the ‘BlackBerry LOVE’ campaign have failed – and I think it is obvious that the ‘LOVE’ theme is simply inconsistent with the real and authentic ‘can do’, ‘make it happen’, and ‘entrepreneurial’ attitude of their core user base. The campaign was not authentic to the true nature of the company. Similarly with the new PlayBook experience, that some reviewers have questioned as ‘uninspired’. RIM keeps pointing to elements such as ‘dual core processor’ and their old fallback ‘security’ (you can tell a RIM exec is out of answers when he starts talking about ‘security’ …). The difference between a ‘list of features’ and ‘inspiring’ is the difference between 1st place and potentially ‘out of business’ – and this is something they need to understand – culturally.
But issues such as these are merely symptoms of what are arguably deeper, cultural issues. RIM’s failure to understand the consumer market from product, to messaging, to platform, and it goes right to the top. Despite the deep respect I have for the co-CEO’s of RIM, and their world-class strength in some areas – they are very weak in others. The problem is that they brim with hubris regarding their success in the corporate market and are culturally blind to the gaping holes in their armour regarding consumer. They honestly think they understand consumer product, business, mentality, marketing – but they really don’t. Take another look at that statement: it’s not so much that they are ‘weak’ in some areas, that’s only 25% of the problem. It’s that they don’t recognise that they are – and they are only beginning to respect the language, ideals, and perspectives of those who are strong in consumer. Their world-class exceptionalism in some areas has left them impervious to the stains on their coat… like Shaquille O’Neil, basketball phenom, bastardizing his lines in a wayward Hollywood epic that he just clearly doesn’t belong in.
Most of the design decisions at RIM are made by 50 something engineers, otherwise highly accomplished and credible in the field of engineering. But since they’ve lived most of their lives in the rural areas of Southern Ontario, and don’t have any real background or even social sensibility for culture, design and such issues, they’re woefully unqualified for the task of aesthetic judgement. The problem is not so much that they can’t create a user experience with ‘sex appeal’ – because they could hire the right people and improve, again, it’s that that they don’t recognise their own weaknesses in the area. They don’t speak the language of ‘the creative process’ and would probably laugh at anyone who did. Perhaps I can provide you with an anecdote; there is a folk-tale at RIM that the software engineers once brought in a foosball table – probably the most standard form of distraction and a minor symbol of authentic expression of what really is a heavy, intellectually creative process in need of … you know ‘breaks’ and ‘fun’ … Mike L. summarily dismissed the idea: ‘not in my company’. There is no room in his notion of what it means to be ‘professional’ for t-shirts, lounging, and hip-hop. RIM is one of the world’s leading brands, and yet, walking around campus you’d suspect you were in ‘nowhere, USA’, or Xerox HQ in 1992… by no means attractive to anyone at the cutting edge of this business. Google – it is not – in this regard. That RIM has not yet even made a dent on the ‘top 100’ lists of where undergrads and MBA’s want to go when they graduate is indicative of this – and yet it should be a place of inspiration and aspiration given what they are doing in the world.
Extending this cultural theme is of course the fact that the company is run by a ‘good ole’ boy’ network from Southern Ontario. Though I actually believe there can be advantages in this close-knit, trust-based social ecosystem, it is unacceptable in this day and age that a global brand should have the vast majority of its citizens derived from a section of a small province, of a small, somewhat provincial and less important country (Canada), that does not have a history of empire, or executive class with the depth or strength of character and identity as say, Sweden, or Finland. (I say this as a proud Canadian who believes that Southern Ontario businessmen are amongst the best in the world – but that no group of localites are prepared to take on such global challenges). If Apple were to be based in Wisconsin, and drew most of their talent from the state area, I’m sure Wall St. would wonder what is going on. Again – to compound the problem – it’s an issue that RIM isn’t really aware of. Perhaps they are intellectually, but they don’t ‘get it’, in this regard. I hope they will.
Make no mistake – I’m am not ‘disgruntled’ about my past experiences with RIM, I believe strongly in the company, and they have so much going for them. Their stock is woefully undervalued right now, with expectations lower than Yahoo, which everyone knows is a company that has been bleeding for years with no end in sight. RIM has a strong brand, a powerful new O/S coming soon (QNX was a brilliant move) is well positioned in several markets, has a relatively motivated and highly competent team, the authenticity of 2 founder-leaders who basically invented the market for smartphones by providing the first ‘addictive’ data application (e-mail) that gave life to the carriers otherwise dead data offerings. If they can deliver a few world-class handsets, get their marketing and branding act together, the rest will take care of itself. Steve Jobs should be thankful for RIM for initiating the market for him, and perhaps RIM will recognise that they were outdone with the iPhone 4 years ago and they have yet to produce a competitive offering and – and that they are running out of excuses. But I do believe in them.”
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