By Brett Arends, MarketWatch
BOSTON (MarketWatch) — An open letter:
Dear Thorsten Heins,
Congratulations! You’ve just become the new chief executive of Research In Motion, the BlackBerry maker.
In your first 24 hours on the job you’ve managed to wipe another $600
million off the company’s dwindling value. In case you hadn’t noticed,
the stock
RIMM
-0.13%
fell another 7% on your first day.
Will RIM's new strategy pay off?
Research in Motion has gone to a single CEO, but will the rest of the rest of its corporate strategy evolve with it? Spencer Ante discusses on digits.
Thorsten, this is embarrassing.
On Wall Street, news of a big management shakeup should have sent your
stock leaping. The short sellers would have rushed to cover, and
analysts would have started penciling in all sorts of bullish
possibilities. A company with a new CEO has a lot of “optionality.”
Instead Wall Street is already giving you a big thumbs-down.
Your first conference call, Monday morning, was a disaster. Apparently,
you think everything was pretty much OK before you took over.
You expressed confidence in the company’s existing strategic direction, and vowed no “seismic change.”
On the call an analyst pointed out that you’d been part of the senior
management team for the past few years, and asked what you weren’t able
to do then that you are able to do now. Your response, according to a
live blog from Engadget:
“I don’t think that there is a drastic change needed. We are evolving
our tactics and processes. I don’t feel that I was held back in any way
to do what I needed to do.“
This defies belief. RIMM stock was about $110 when you joined the company, in December 2007.
Today: $15.88.
This is like someone being appointed as the new captain of the Titanic,
and saying, “Well, I wouldn’t really have done anything differently.”
Full steam ahead?
You also said you were looking for a new marketing honcho, and that
you’d be open to “licensing” your operating system to other companies.
Oh, brother.
It would be ominous indeed if you thought your biggest problem was with
marketing. As for licensing your software — don’t flatter yourself. Your
company is giving off the stench of death. Meanwhile, there are already
three operating systems out there that are better than yours — Apple’s
AAPL
-0.28%
iOs, Google’s
GOOG
+0.03%
Android, and Microsoft’s
MSFT
+0.20%
Windows Phone 7.
Thorsten: It’s not all bad.
Yes, you can save this company. But to do that you need to do three things. Three radical things.
1. Go with the hurry-up offense.
Anyone counseling patience and “steady as she goes” is a fool. The
crisis is much worse than it seems from your new executive office.
You have one shot at fixing this company. One.
No, RIMM isn’t going to run out of money — not yet, anyway. As of
November, you still had about $7.2 billion in cash, receivables and
other liquid assets, compared to just $3.8 billion in liabilities.
But so what? Your biggest problem isn’t money, it’s time. And you are running out of that, fast.
Research In Motion
Your brand name is fading. Your market share is slumping. You’re
actually below 10% of smartphones in the U.S., according to reports. And
this industry moves fast. Just as with Nokia, RIMM is already
yesterday’s news. If you hang around much longer you’ll be finished for
good.
Don’t believe me? Try this. Stop listening to people inside the company.
Stop listening to advisers, colleagues and friends. Instead, go out to
Best Buy incognito, on your own, and have a look at what’s on offer and
how your competitors stack up. Look at the products people are buying
and what they’re talking about.
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