In early January, Eric Jackson in his blog on Forbes.com was applying the seven habits of spectacularly unsuccessful executives that had first appeared in Sydney Finkelstein’s 2004 book, Why Smart Executives Fail to recent events.
I was prompted to take a second look at Jackson’s article when this past Sunday Research in Motion (RIM), the developer of the once nearly ubiquitous corporate BlackBerry, witnessed the exit of co-founders and co-CEOs Mike Lazaridis and Jim Balsillie after 28 years at the helm (both remain on the Board). They were replaced by Thorsten Heins, the company’s COO since 2007. I was curious to see which, if any, of the seven habits Lazaridis and Balsillie might have fallen prey to in these last couple of years that could have contributed to the company’s stunning slide.
What’s Been Happening at RIM
Research in Motion’s BlackBerry, with its security, messaging, and general ease of use had clearly been a leader with its innovative technology. But apparently RIM has lost its edge and here’s how far it’s fallen. On Tuesday, January 24, Bloomberg Businessweek reported that RIM’s shares had dropped 8.5 percent the day before, and another 5 percent that day, and that shares had slid a whopping 75 percent since this same time a year ago. And Heins told investors on a conference call on January 24 the he doesn’t see a need for “drastic change.” “Jim and Mike’s strategy of not sacrificing long-term value for short-term gain is the right one,” Heins said. “I share that value.”
WHAT? Why would a company like RIM that’s been in steep decline for the past year losing share to the likes of iPhone and Androids not wake up to the call that we, the customers, prefer touch screens and apps people! Who cares about the security (corporations still do, but the Droid marketplace will likely outrun them on that as well), ease of texting, and the scroll ball? (Honestly, I haven’t touched a BlackBerry in 2 years so I don’t even know how they operate anymore). You just have to wonder if Research in Motion is becoming RIS — Research in Stagnation.
A View from the Past
What could be going on with the leaders at RIM? Before I answer that, I’ll revisit what happened to CEO Ken Olsen and the once dominant Digital Equipment Corporation (DEC) of Maynard, MA.
In the ‘60s and early ‘70s DEC had filled a market hungry for affordable minicomputers in a world of IBM mainframes. DEC was pre-eminent in the industry until it made the ghastly mistake in the mid 1970s of not getting on the new microcomputer train. Olsen wouldn’t have it. In fact, he was said to have scoffed at the thought of it. But in the early ‘80s Olsen changed his mind after the successful introduction of IBM’s PC. Unfortunately DEC’s late entry, plus their insular view with, most notably, proprietary and expensive technology and floppies, left them in last place. They never made the comeback and were eventually acquired by Compac in 1998 after years of decline.
‘Habits’ that Create the Downfall
DEC’s Olsen and quite possibly RIM’s Lazaridis, Balsillie, and now Heins may be suffering from at least two of Finkelstein’s seven habits that failing leaders exhibit: Habit #1: They see themselves and their companies as dominating the Market, and Habit # 6: They stubbornly rely on what’s worked for them in the past. With the first habit, the CEOs were/are likely wearing blinders – not seeing what’s actually happening beyond what’s in front of their noses. The second habit is tied to the first – if it worked before, it surely will work again. True if nothing else changes. But since we live in a world where everything is always changing, a mindset like that severely narrows the ability to see and act on threats.
What’s the Message Here?
The message for us as leaders is clear. That whether we’re comfortable with this or not, practically nothing remains the same. Just about everything in the work world is in flux. Because of that, being on the alert for what’s shifting, whether it’s market, product, or business knowledge or leadership skills, and taking deliberate action before we’re swiftly replaced by something or someone that’s newer, smarter or faster is a step we shouldn’t avoid.