The Journey Ahead for RIM

We have all seen the writing on the wall but the announcement of layoffs at RIM has sent shivers down the spines of many in the Canadian tech community and broader business sector. While the market can be left to operate as it will, and RIM may or may not survive the onslaught of formidable competitors in the mobile space, such as Apple and Google, the macro level implications for Canada are too important to ignore.

The question is can Canada afford to let RIM become another Nortel? I am not suggesting that RIM is in the same boat today as Nortel was when it fell from glory; RIM is still a profitable company, sitting on a ton of cash, with an edge in enterprise deployment, and good growth in foreign markets. So there is a glimmer of hope. But RIM needs to act fast and decisively to stay relevant and increase its growth prospects long-term, and ultimately avoid slipping into oblivion or being gobbled up by the likes of HP or Microsoft.

Brains larger than mine, and people smarter than me, are certainly struggling with a way out as I write, but here are my 2 cents on some critical strategic moves.

First, the tremendously successful (let us not forget their overall achievements) Co-CEO’s of RIM should swallow their prides and seriously consider ceding their leadership roles to enable RIM to promptly start the search for a successor. This is not news; many in the corporate boardrooms of the country and institutional shareholders of RIM have been calling for such a change. How can you leave a company you built from scratch? By swallowing a doubly bitter pill; leaving RIM and in the process taking advice from one of your worst competitors, Steve Jobs, who admitted that getting fired from Apple was the best thing that happened to him. New blood is needed fast if RIM wants to truly move from a device/mobile-mail company to an open and ubiquitous mobile/tablet platform. The qualities of the replacement: a tier-one “software” veteran, strong in marketing and consumer communications/branding, preferably with turn-around experience (a la Lou Gerstner). Let us remember that much of RIM’s competitive advantage will ride on the QNX OS, so accelerating that platform’s development is key, and a heavy-weight software executive can only help.

Second, the company should expand strategically, by following tactical layoffs with strategic hires to address its long-standing weak areas to maximize long-term impact (e.g. UX, open platforms, innovation) and truly leverage QNX by getting the mobile development community excited about its capabilities. IMO a key problem at RIM over the past 2 years has been lack of talent in the right areas; they actually identified the right tactical and strategic moves (sometimes reactively rather than proactively) but the shortfall was not investing in the right talent pool to execute adequately on their plans. This surge of new blood would be welcome among shareholders, customers, and partners, as well as, employees.

Third, RIM should raise money. I know it sounds crazy given where the stock is today but unless we want a take-over or negotiated acquisition at even a lower stock price, some new (maybe strategic) investment could be a God-send. There are overseas institutional investors that still respect and value RIM’s brand, core technology, and the Canadian ecosystem for technology development. With the right changes, I do not see why even large Canadian funds and investors would not take a second look at a company that was worth $80 b. only a while ago.

Whether you carry an iPhone (which I do!), Android or BlackBerry (or are even one of the few carrying around that mega-sized mobile phone called the PlayBook), RIM’s restructuring and long-term survival is in all of our interests as Canadians involved in the tech sector. Let us not forget Apple’s journey and apply the same lesson: sometimes innovation takes relearning, time, and patience. Maybe RIM can go through the same kind of reinvention as its greatest archenemy did years ago. Then again, I don’t have a crystal ball and my optimism may be driven by misplaced patriotism.