Posted By Ray Nicolini
Black clouds are hovering over the BlackBerry bushes.
Research In Motion, which designs the enterprise-focused smartphones, had its guts trampled on in a public display yesterday as mobile blog Boy Genius Report published an open letter from a purported high-level RIM executive. BGR then followed up with two more disgruntled insider missives from the rank-and-file troops.
At the same time, activist investors wanted RIM to take a long, hard look at its dual-CEO, dual-chairman structure and adopt a less convoluted model. I happen to agree with that idea.
The many charges leveled against the Canadians largely boil down to a handful of key concepts:
- Enormous bureaucracy and piles of red tape are …
- Defending staid and outdated business processes, which causes …
- Halted innovation and badly slipping project delivery dates, so …
- That's why Apple and Google are running circles around RIM.
Attempting to defuse the ticking PR bomb, RIM agreed to think about the management structure and responded to the open letter on its official blog. After noting that a blog post from an anonymous source might not be real (in an unsigned blog post of its own -- oh, the irony!), RIM says that "it is fair to say that the senior management team at RIM is nonetheless fully aware of and aggressively addressing both the company’s challenges and its opportunities."
But that response only serves to legitimize the complaints, and it also sounds petulant: We're big! We're growing! Of course we have to streamline things after five years of huge growth!
Even the agreement to consider a new management structure is less than a total capitulation. A committee will offer a recommendation by January, and then the board gets another month to take action -- or reject the committee's recommendations.
So something might happen in February, but don't hold your breath for big changes. After all, co-CEOs and co-Chairmen Jim Balsillie and Mike Lazaridis, who also make up half of RIM's Strategic Planning Committee, have been quite public about their fondness for the current structure.
Change from within isn't easy. After publishing his famed "Peanut Butter Manifesto" to incite changes at Yahoo!, Brad Garlinghouse soon found himself behind a new desk at AOL. And the company he left behind didn't seem to take his advice to heart. Yahoo! shares are about 40% cheaper since that manifesto appeared.
Will RIM take better heed of these warnings? The only way to find out is to keep a close eye on the company. Add RIM to your Foolish watchlist, and then sit back and wait for signs of improvement. Just don't be too surprised if the needed change never comes.
Via MSNBC
