Dead Man Walking II: What RIM can learn from Montreal’s crumbling bridges
A story in Saturday’s Globe about the failure of leadership in Montréal around its crumbling bridges offers a lesson in hope to RIM’s leadership on how to avoid a grim future.
RIM shares took a battering last week as a result of ongoing news of Playbook’s disappointment, product delays and earnings warnings. In a blog we posted last December, we talked about RIM’s likely demise if it did not discover who it really is at its core and build a business around what truly makes it uniquely remarkable rather than just being a commoditized hardware developer/manufacturer.
The failure of leadership in Montréal provides a glimpse into RIM’s future if it doesn’t change course soon. Saturday’s Globe article described how ongoing warnings about how the neglect of Montréal’s crumbling south shore bridges will soon result in them falling apart into the St. Lawrence and being swept out to sea. The fact that successive provincial and municipal governments have ignored these warnings until it is too late has led to a traffic, construction and funding crisis in Montréal. As new holes develop and pieces fall off into the river, the bridges are closed without warning, leaving commuters stranded and causing real estate values to plummet on the south shore.
RIM is facing a similarly bleak future. RIM’s track record of buggy software and underperforming products has eroded trust in the brand. While content offers the proprietary opportunity for future revenue in the telecommunications business, RIM is the metaphorical equivalent of a decaying bridge whose real problem has been ignored for so long it is about to crumble into the river. RIM is facing the distinction of being the next Nortel rather than continuing to be the poster child of the Canadian technology industry.
But like a bridge on the verge of extinction, there is a three-step path to hope. The first step is to recognize the magnitude and reality of the problem. This is the most difficult step, emotionally, and the one that has eluded the leadership of RIM for too many years, in part because the only conclusion that can be drawn from this recognition is that the solution RIM requires is transformational and revolutionary, not evolutionary.
The second step is to pull out all the stops to identify the real fix to the problem rather than continuing to put Band-Aids on a gaping wound. RIM can’t continue to just be a hardware developer, and the rest of the industry is moving to content, so what does it do? If it follows the rest of the industry into content, how does it do it in it’s own unique and high value way? It needs to know who it is at its core to answer this question because that is how it figures out what makes it uniquely remarkable and, by extension how to develop and sell uniquely remarkable products and services. If all it does is follow the industry into content, it will be seen as an undistinguished follower, just as its Playbook is viewed now.
The third step is an absolute and unwavering commitment to the execution of the transformation. For examples of other companies that have brought themselves back from the abyss in the technology business, we need to look no further than IBM under Louis Gerstner and Apple under Steve Jobs II, both of whom resurrected their companies in the 90’s.
Like the bridges in Montreal, the longer RIM ignores the necessity of this three-step fundamental transformation, the greater it’s pain will be when it hits bottom and is forced to deal with its problem by its board or bankers. Rather than having control of its destiny, which it can still do now, it is more likely it will follow Nortel’s path of being cut up into pieces and sold for pennies on the dollar or being bought by another company (Microsoft?) that does have a content platform and needs a hardware distribution medium.