Conspicuous by their absence atop the barricades leading the defence of the embattled BlackBerry network have been Jim Balsillie and MIke Lazarides, the joined-at-the-hip joint CEO's and co-chairmen of Research In Motion (RIM). They have been in charge for getting on for 20 years now, and during that time RIM has gone from pack leader to reactionary follower, as Martyn Warwick reports.
Kids love the Where's Wally? books (re-christened Where's Waldo? in the US) created by the British illustrator Martin Handford. They comprise of double-page spreads of intricate pictures of hundreds of people milling about in various locations doing variously entertaining things such as visiting the zoo or the beach. Somewhere in the madding crowd is the eponymous Wally/Waldo. It's the kid's job to find him.
Adults aggrieved by RIM's dismal handling of this week's massive and widespread service outages might be (slightly) amused by a 'where's JIm and Mike?' puzzle- especially if they can stick a pin right in wherever they think the two top bods might be.
And they are not alone in their disillusion with the two men. RIM's big institutional investors, led by the Jaguar Financial Corporation, are putting pressure on the Board to can Balsillie and Lazarides and then split the chairman and CEO roles a for once and for all.
Jaguar claims to voice the concerns of 12 of RIM's 20 biggest shareholders and also to represent and act for 8 per cent of other, lesser, stockholders. It argues that private equity would be willing to stump-up a maximum of US$16 billion (that's a $3 billion premium on top of RIM's current and falling share price) to take the company into private ownership and re-organise it.
Referring to Messrs. Balsillie and Lazarides, the Chairman of Jaguar Financial, Vic Alboini, said, "Their time as builders is over. Management has failed to appreciate RIM's competitive environment which largely explains RIM's declining market presence and dramatically reduced share price. RIM has become a reactionary company trying to compete in an innovative industry."
He also said, “The status quo is not acceptable, the company cannot sit still. It is time for transformational change. The directors need to seize the reins… before more market value is lost.”
He has a point. RIM's share price has collapsed by an incredible 66 per cent over the past eight months.. Back in February the stock was valued at $70. Now it's $23 and falling.
Jaguar Financial stresses that it already has considerably more than the 5 per cent of votes needed to call an extraordinary meeting of RIM shareholders. Institional investors would then argue for the dissolution of the existing Board of Directors, the election of a new one and the appointment of a 'transformational' new CEO.
Mr. Alboini isn't messing about or taking prisoners. He says that if the Board doesn't resign he'll start punting RIM about to prospective acquirers - either as a sale of the entire going concern or broken into pieces.
Apparently sale options include hiving off part of RIM to become a network company and - horror of horrors - "a patent company". Now there's an unpleasant thought.
Meanwhile, RIM is claiming that "service has been fully restored" but the blogosphere is seething with claims that BBM messages still aren't getting through. And indeed, that would seem to be the case, as we now know straight from the horse's mouth.
Mike Lazarides finally broke cover yesterday for long enough to film and post a clip to YouTube in which he says, ‘We have let many of you down. But let me assure you we are working around the clock to fix this... We are now approaching normal service levels in Europe, the Middle East, India and Africa... It is too soon to say that all issues have been resolved... We expect to see continued progress and possibly some instability as service levels come up to normal levels everywhere... I would like to give you an estimated time of full recovery around the world, but I cannot do this with certainty at this time." How's that for mixed messages from the co-head of a major communications company?
However, the gem of RIM's infrequent and brief pronouncements of the past few days has to be this; "The systems are designed not to fail like this". Brilliant. RIM makes massive amounts of money from communications. How come it can't communicate properly with its customers?
In addition to very belated apologies and half-hearted 'mea culpa's' from RIM's two all but invisible leading men, unhappy Blackberry subscribers want compensation for three days plus of service they have paid or will be billed for but didn't receive. In this regard Lazaridis and Balsillie have said that there are no current plans to offer compensation to customers, but they do not rule it out. Neither will the courts if this farrago continues for much longer.
In an interview given last April,an emotional Mike Lazarides laid bare his soul when he said, “Why is it that people don’t appreciate our profits? Why is it that people don’t appreciate our growth? Why is it that people don’t appreciate the fact that we spent the last four years going global? Why is it that people don’t appreciate that we have 500 carriers in 170 countries with products in almost 30 languages? I don’t fully understand why there’s this negative sentiment, and I just don’t have the time to battle it. Because in the end, what I’ve learned is you’ve just got to prove it over and over and over.”
Yes, Mr. Lazarides, that's exactly what you have to do - ad infinitum. It's the nature of the beast and it's your job.
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