The sea change at RIM
Mike Lazaridis and Jim Balsillie did the right thing by resigning their roles yesterday as co-CEOs and co-Chairs of Research In Motion. I had different replacements in mind on December 16 when I urged this course in a blog (Time for them to go), but the succession by former Chief Operating Officer Thorsten Heins makes eminent sense.
Or does it? Everyone went to some lengths yesterday to say how smooth this all was. “What you will see with me is rigor and flawless execution,” new CEO Heins told The Globe and Mail. He will hire a new head of marketing. But selling what you’ve got matters little if your products have fallen as far behind as RIM’s. Heins must also devise new ideas that close an ever-widening gap with competitors.
The role of Prem Watsa, founder and CEO of Fairfax Financial Holdings, has been crucial in this resuscitation. Interesting that while the media published many a rumor of late, no one caught a whiff of the real story. Share price is bound to jump when markets open this morning. A more relevant long-term development may be the opportunity for some at RIM to leave and start their own companies. Not everyone will fare well under this new boss. Such departures are to be welcomed; there have been far too few such seeds spread in the past.
As for Mike and Jim, they will play a continuing role at RIM, but life will never be the same again. Both are about to turn 51: Jim on February 3, Mike on March 14, leaving them lots of time to save the world in some new way. As a co-founder, Mike will remain involved with innovation. Jim will have a harder time filling his dance card with meaningful roles. The Phoenix Coyotes may be moving to Hamilton yet.
Meanwhile, as Jim said in 2006 when RIM paid $612.5 million to settle a patent dispute, “We took one for the team.”
UPDATE: Share price briefly moved higher in pre-market trading until the market figured out that Mike and Jim were still going to be coming into work. By 11 a.m. RIM shares were down almost 7 per cent. CNBC called the new CEO “no clean break,” a phrase that will likely become the new narrative. If that’s the case, I pity Thorsten Heins. There’s nothing worse than being named boss if the ancien regime is still in charge.