Should RIM's pair of CEOs be split up?
When Kevin Michaluk, leader of the CrackBerry Nation (the undisputed largest online gathering of BlackBerry fans), coins the term “RIMAGEDDON,” it's pretty obvious the BlackBerry makers are in a rough spot. Being a long time fan, I have tried my best to maintain my faith in RIM. But with time, that is something that is becoming increasingly hard to do. Even with several acquisitions under their belt over the past year, their market share has plummeted, their devices have grown dormant and their somewhat highly anticipated tablet has come and gone with little buzz. Even key selling points – like BBM – have faded among stiff competition.
Starting almost two weeks ago with the Q1 2012 earnings report, consumers and investors alike have begun to question the company's future. Stephen Jarislowsky, CEO of RIM's sixth-largest investor Jarislowsky Fraser Ltd., stated that RIM is, “... resting on their laurels.” Jarislowsky also admitted that they have given up on the Waterloo-based company and have since pulled their entire stake.
For some time now, Jim Balsillie and Mike Lazaridis have shared the CEO title for RIM. A few years back, Jim Balsillie left the board of directors, but back in December, he returned and rejoined Lazaridis as co-chairman.
Quickly following the earnings report, one of RIM's investors, Northwest and Ethical Investments, proposed a shareholder vote that would split up RIM's unique co-CEO and co-chairman structure. The motion has gained quite a bit of attention and other investment firms are now following suit; Institutional Shareholder Services (ISS) has also called for the split-up. The shareholders vote will take place next month, where the two CEOs' fates will be determined.
RIM, in defense of its long-reigning CEOs, advised shareholders to vote against the motion. But based on feedback I've been reading around the web, the future of Balsillie and Lazaridis as co-CEOs of RIM seems rather bleak. A poll ran on CrackBerry.com, asking readers if they are for or against the CEO split-up, had rather unsurprising results. Over two thirds of the voters (5,116 at the time) are for the CEO breakup, leaving only 30 percent for those who are against it. Several RIM shareholders in the comments around the web have also stated that it's time for a change.
So I am left on the fence, trying to decide whether Lazaridis or Balsillie ... or both should be removed. Although the company has certainly shown promise over the past year with the acquisition of major names in the mobile world, little has actually come of the company's numerous purchases. Given more time, we may begin to see some improvements from the collaboration of the major players, but time is of the essence and it appears both Balsillie and Lazaridis fail to notice.
The two have split up roles pretty evenly and things are pretty clean-cut between them: Balsillie handles public relations while Lazaridis controls the actual technology itself. That said, two people equally in charge can undoubtedly lead to some altercations, and not to mention the outrageous and inefficient salaries of having two CEOs. Lest we forget that RIM began laying off workers as part of a streamlining program. Although I doubt removing them from their top positions will change their salary any noticeable amount, shaving pennies off of the top would be a lot more sound than plucking them from the foundation. But that's another story for another time, really.
I like both Balsillie and Lazaridis; they are the sole creators of the phones that turned me into a cell phone nut. And you can't deny the respect they have earned and deserve as CEOs. Together, they drove this company to the top. But denying that it is on its way back down would be foolish. With these two still in the driver's seat – not acknowledging the quickly changing market around them – they're purchasing a one-way ticket to a RIM takeover. Bringing in a fresh face with some up-to-date ideas is one of the more important moves this company needs to make ... and sooner rather than later.
There is one major concern though, as Kevin stated, "I typically view change as a good thing, but more change on top of a period of change/transition might be too much change." Regardless, it's a risk that RIM needs to take. Balsillie and Lazaridis can and should be proud of what they have done with RIM, but knowing when to call it quits and call in the reinforcements is vital. Their problem for many years now has been reluctance to change. If that reluctance continues for too much longer, there might no longer be a company to change.
So pups, should Jim Balsillie and Mike Lazaridis remain co-CEOs of RIM, or should they be split up? Which one, if any, should remain in charge? And will it even matter? Is RIM dead regardless?
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