Everything That's Wrong With Research In Motion — An Ex-Employee Tells All
An Ex-Employee Tells All — 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.
Context & Ripple Effects
The tell-all lands at a moment of accumulating pressure on Research In Motion: talk of a change at the top surfaced in late May as the company's fortunes flagged, and comScore data earlier this month showed RIM and Microsoft being squeezed out of U.S. smartphone share by Apple and Android. The anonymous ex-employee's charge — that collapse traces straight to executives who don't understand consumers — gives that abstract decline a concrete culprit: the co-CEO structure itself.
What makes the piece travel is the response it forces: Balsillie and Lazaridis publicly defended the dual-leadership setup rather than ignoring the criticism, per syndicated pickups including AllThingsD. With the founders also reportedly weighing a Nortel patent bid topping Google's $900 million offer and pushing PlayBook software into cars to prop up sales, the leadership question is no longer confined to analysts.
First-order effects
- RIM's co-CEOs are drawn into defending their own governance structure in public, converting an internal morale problem into a visible credibility fight they can't win quietly.
- The ex-employee's account hardens the case for the board to act on leadership change, which had only been rumor since Reuters reported it in late May.
Second-order effects
- Institutional investors and large enterprise customers — the base RIM still depends on — get a public framework for doubting management, raising the cost of any half-measure short of replacing the co-CEO model.
- Rivals Apple and Google gain recruiting and PR leverage: every insider account of executive dysfunction makes competing for RIM's developers and carrier relationships cheaper.
Third-order effects
- If the pattern holds, RIM becomes the test case for whether hardware companies built around enterprise IT relationships can reorganize around consumer taste without first replacing founder-era leadership.
- Persistent insider criticism plus shareholder pressure points toward activist involvement in governance at once-dominant device makers, making co-founder dual-CEO arrangements harder to defend anywhere in the industry.
The trend: The smartphone market is punishing leadership structures built for the enterprise-device era, forcing founder-led companies like RIM to choose between governance reform and continued share loss to consumer-driven rivals.