Denial Is Not A Turnaround Strategy: Why RIM's New CEO Needs To Get Real
If you took the statements of new Research in Motion (NSDQ: RIMM) CEO Thorsten Heins this morning at face value, you might walk away thinking the company's many problems stem from confused marketing and poor execution.
Context & Ripple Effects
Thorsten Heins's promotion is the endpoint of an arc that has been running since at least May 2011, when Reuters first reported talk of a change at RIM's top, and it came weeks after the board finally acted on the argument that the co-CEO structure had to go. The company he inherits is not starting fresh: BlackBerry 7's launch momentum had already sputtered by November 2011, leaving RIM squeezed between Apple and Android's Ice Cream Sandwich.
The mocoNews piece reads Heins's first-day diagnosis — confused marketing and poor execution — as a refusal to name the real problem, and the record gives that critique weight: the October 2011 multi-day BlackBerry messaging outage hit while the platform was already losing its competitive footing.
First-order effects
- Heins takes over a company whose flagship BlackBerry 7 launch failed to hold early excitement, so his 'execution, not strategy' framing commits him to fixing delivery on the existing plan rather than announcing a pivot on day one.
- Carrier partners and enterprise buyers, who watched the October outage leave millions of users without text service for three days, now have a new CEO but no new answer to why the platform deserves their shelf space.
Second-order effects
- If the diagnosis stays at the marketing-and-execution level, developers and carriers hedging between ecosystems get less reason to wait on BlackBerry, accelerating the squeeze between Apple and Android that was already visible by late 2011.
- RIM's confirmed $4.5 billion joint purchase of Nortel's wireless patents with Apple and Microsoft becomes more central to its valuation story: as handset competitiveness fades, the patent portfolio is the asset rivals still need to price.
Third-order effects
- A turnaround framed purely as execution implies the smartphone market consolidating around two dominant ecosystems, with third-platform players surviving only on niches, licensing income, or patent leverage — the position RIM's Nortel stake quietly prefigures.
- Whether boards learn from RIM's slow leadership change — eight months from the first public talk of a change at the top to Heins's appointment — is a governance question other incumbent hardware makers facing ecosystem displacement will have to answer.
The trend: The smartphone market is consolidating around the Apple and Android ecosystems, forcing third-platform incumbents like RIM to choose between a credible reinvention and monetizing patents instead.