As with HP and Yahoo, RIM's board may be the real problem
BlackBerry maker's directors reportedly ready to remove Balsillie, Lazaridis as co-chairs
If an article published Tuesday in the Financial Post is accurate, the board of directors for Canada-based Research in Motion is about to make a huge mistake.
The BlackBerry maker has floundered in the past two years under the leadership of co-chief executives Jim Balsillie and Mike Lazaridis. This is just a fact. Even they acknowledge it, which is why each of them draws a $1 annual salary (and millions more in other forms of compensation, so the $1 thing really is a symbolic joke).
As several NFL coaches over the weekend were reminded, when a team performs poorly, there's a very good chance the team's "CEO" (the coach) will get fired.
But if the FP article is accurate, no one's talking about replacing Balsillie and Lazaridis as CEOs. Instead, the other seven directors are considering removing them as co-chairmen of the board.
This is a half-measure that doesn't address the competitive problems created by Balsillie and Lazaridis's strategic blunders and inability to enable RIM to keep up technologically with Apple and Google, whose Android mobile OS in particular has savagely stolen market share from the BlackBerry.
In response to RIM's disintegrating smartphone market position, the disastrous PlayBook tablet and the 75% loss in share price over the past year, the Sunshine Boys cheerfully and repeatedly reassure shareholders and analysts that RIM's Next Big Hit is right around the corner, just a few months away!
The latest, of course, is the BlackBerry 10, which is supposed to feature the magical QNX OS that will make people forget all about their little iPhones and Droids (just the way it worked in the tablet market when QNX shipped with the PlayBook). The BlackBerry 10 was supposed to be out earlier this year, but it's been pushed back to late this year because, according to Balsillie and Lazaridis, a magical dual-core LTE chipset that was supposed to power the BlackBerry 10 won't be available until the middle of this year. Otherwise, Apple and Google would be surrendering before the next Grey Cup.
However, according to a Boy Genius Report post that quotes a "high-level RIM employee," the real reason for the BlackBerry 10 delay is because "they don’t have a working product yet."
You'd think a responsible board of directors would get around to noticing that the company has strategy and execution problems, which usually are the responsibility of the chief executive. But just read this from the FP (my italics):
At the same time, RIM’s seven independent directors had been staunchly supportive of Messrs. Lazaridis and Balsillie and continue to be despite successive quarterly earnings declines, RIM’s evaporating share of the smartphone market, product delays and a precipitous drop in the company’s share price.
And that pretty much tells you what's wrong with RIM.