RIM’s Embarrassing Failure and How to Avoid It

Oct 1, 2013

There’s no doubt that the mighty giant that RIM once was is now only a shadow of its former self. Waterloo-Kitchener is now flooded with legions of ex-employees searching for work.

What went wrong? How could a company with loads of resources and talent be brought to its knees?

The same way it can happen (and does happen) to any other company. The distinguishing feature with RIM that makes it so newsworthy was the sheer size of the organization. However, the fault lines that caused its demise are no different than the ones that bring down small and medium sized organizations every day.

Out of Touch

Due to its huge success, RIM got to a point where the leaders felt they knew better than the customers. They felt they were in the position to tell the market what it wanted – an “if we build it, they will buy it” attitude. They stopped listening to the customers.

This allowed Apple and other competitors to slide in with new innovations, like touchscreens and apps vs. RIM’s emphasis on battery life and security.

No one owns the customers.

Chasing the Competition

When RIM realized they’d made a mistake ignoring their customers, they made the decision to chase after the competition in an effort to play catch up.

They threw together the BlackBerry Storm too quickly and it showed. It was a flop.

Rather than assessing the situation clearly and making a strategic move, they jumped the gun.

Not Playing to Their Strengths

In the flood of new players in the market, each with their own flashy set of features, RIM forgot to play to their strengths. What sets the BlackBerry apart from all others is its keyboard. That’s why people buy it.

Yet when they developed BlackBerry 10, the board ignored co-founder and co-CEO Michael Lazaridis’ pleases to bring a version with a keyboard to market first and went with the touchscreen version.  And as he feared, it wasn’t strong enough to differentiate itself from the competition.

RIM ignored die-hard customers, a niche it still held say over, trying to please the masses.

A Divided Company

Disagreements amongst leaders as to what direction the company should be going in led to delays in projects and made it difficult for them to remain agile.

Furthermore, there was no strategic direction and mission for the employees to rally around and support.

Some employees became overburdened with work while others were left with little to do but worry about their future with the company. Morale issues arose across the organization.

Thy Name is Fear

Perhaps the biggest cause of their downfall, and possibly even the root cause of many of the previously mentioned problems was fear.

Leaders let fear drive their decisions.

They raced to get the BlackBerry Storm out after the iPhone hit fearing if they didn’t they’d lose out. This rush in the face of fear led to an inferior product.

They launched the BlackBerry 10 with a touchscreen instead of their iconic keyboard fearing what would happen if they didn’t follow what everyone else was doing. Thus, they alienated their core customers and were far too late to lure any of the touchscreen market.

Finally, they went against former co-founder and co-CEO Jim Balsillie’s advice to shift focus to instant messaging software. He led a project to turn the BlackBerry Messenger software into SMS 2.0, with the goal to allow carriers to offer it to all users regardless of their phone and charge fees for it. This would have allowed them to become a lead player in instant messaging.

The Power of Hindsight

It’s easy for us to look back at some of the decisions that led to RIM’s downfall and see clearly how things could have been different.

However, every day organizations make these same choices. They stop listening to customers, they choose not to pay attention to the market and they blindly copy what competitors are doing without asking whether it is the right thing for them to be doing.

They lose sight of their strengths – what makes them unique and attracts people to them. They become split and divided with nothing to hold them together as a unified front.

And when fear creeps in and is allowed to overshadow logic, facts and reason, the decisions necessary to pull an organization back from the edge are that much harder to make.

Heed the lessons RIM has taught us and fear not.

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