RIM brings in new CEO but will it be enough?

Research in Motion, scrambling to keep up in a smartphone market it once led, has announced it has replaced co-CEOs Mike Lazaridis and Jim Balsillie with Thorsten Heins, the current chief operating officer. Laziridis, who founded the company in 1984, will serve as vice chairman of the board of directors, while Balsillie, who joined in 1992, will stay on as a director. Both also served as co-chairmen but they will be replaced by director Barbara Stymiest, a board member since 2007, who will now serve as the independent Board Chair.
The shuffle at the top was framed as an orderly passing of the baton and not a reaction to shareholder unrest, which has picked up as RIM’s stock has fallen by three quarters of its value in 2011 and its marketshare in smartphones has dropped dramatically. Lazaridis said that with the launch of BlackBerry 7 smartphones and the BlackBerry PlayBook last year, along with the upcoming launch of new BlackBerry 10 phones based on the QNX operating system, the time is right to hand the reins over.
Heins, a former CTO at Siemens Communications Group(s si), came to RIM in 2007 and served as Senior Vice President for Hardware Engineering, before becoming Chief Operating Officer for Product and Sales in August 2011. Lazaridis said Heins has the right mix of experience, operational skills and leadership to guide RIM through the company’s next chapter.

Jim Balsillie and Mike Lazaridis

Heins acknowledged some growing pains and challenges for RIM, but said the company was on sound footing, as it looks ahead to BlackBerry 10 devices, which are set to launch at the end of the year and PlayBook 2.0, the next update in its tablet software set to appear next month.
“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,” he said in a statement. “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.”
Heins said in an interview with the Wall Street Journal that he is open to licensing the BlackBerry 10 software if it proves successful but isn’t looking to change the fundamental strategy Balsillie and Lazaridis have set in motion. Heins will also look to fill the chief marketing officer position that remains vacant.
“It’s going to be continuity, but it’s not going to be a standstill,” Heins he told the journal of RIM’s strategy.

Thorsten Heins

With RIM’s value plummeting, there’s been increasing talk of possibly selling the company or perhaps licensing its technology to other technology players. The latest rumor involved RIM trying to sell to Samsung, which promptly denied any interest.
The company is being left behind in the smartphone race by Google (s goog) and Apple (s aapl) and is in danger of being passed by a resurgent Microsoft(s msft), which is looking to use its partnership with Nokia (s nok) to turn its Windows Phone platform into a viable third player in the market. In the latest Nielsen figures in the U.S., RIM’s overall marketshare had slipped to 14.9 percent, and among recent acquirers in the last three months, it had just 6 percent of sales, with marketshare dipping month over month. That’s the challenge that RIM faces. It’s trying to compete against the leaders in the smartphone market, all of which have turned toward touch-based, media-centric app devices — features that are hardly RIM’s strengths. There may be hope in BlackBerry 10 but it’s woefully late and its delayed launch continues to raise doubts about RIM’s ability to execute on time.
Heins may just be acting polite to Lazaridis and Balsillie in glossing over the “growing pains” the company has experienced in the last couple years. But he will have to do better than just talking about staying the course, executing better and being consumer focused. With each passing month, the company falls more into irrelevancy and there needs to be an acknowledgement that the company can’t just beef things up a little and hope to compete. There needs to be a radical improvement in execution, some very mind-blowing ideas introduced and some real progress shown on the app developer front. Putting out a me-too platform and a set of devices later this year won’t cut it. RIM may be able to hold on in emerging markets, where it’s increasingly getting more of its sales. But if the same pattern continues, it will lose out to low cost Androids there too.
I think RIM has done the right thing in shaking things up at the top. Lazaridis and Balsillie have lost the confidence of shareholders and perhaps even some of the workers too. RIM, however, doesn’t seem to want to acknowledge that anything’s wrong. And that may be just about remaining deferent Lazaridis and Balsillie, who made RIM into a powerhouse. But unless Heins makes some real move to change what’s been going on, including the culture inside RIM, there’s not much hope the company can turn things around.