RIM chiefs Lazaridis and Balsillie step down

Mike Lazaridis and Jim Balsillie have stepped down in favour of former chief operating officer and Siemens veteran Thorsten Heins, but analysts are not convinced this will turn the BlackBerry maker around
Written by David Meyer, Contributor

Mike Lazaridis and Jim Balsillie, Research In Motion's long-standing co-chief executives and co-chairmen, have stepped down from both roles following extensive pressure over the the BlackBerry maker's performance.

Thorsten Heins, Mike Lazaridis and Jim Balsillie

Thorsten Heins (left) has replaced Mike Lazaridis (centre) and Jim Balsillie as chief executive of RIM. Image credit: RIM

They have been replaced as chief executive by Thorsten Heins, a long-term Siemens veteran who joined RIM in 2007 as hardware engineering head before becoming chief operating officer in August last year. Lazaridis, who founded RIM in 1984, and Balsillie, who became co-CEO in 1992, will both stay on the company's board.

"Mike created a whole new way of communicating, and I look forward to continuing our close collaboration," Heins said in RIM's announcement on Sunday.

In the RIM statement, Lazaridis did not refer to the company's troubles, which mostly stem from the runaway popularity of Apple's iOS and Google's Android. Stock markets have reacted negatively to poor sales of RIM's PlayBook tablet and the fact that the next major update to the firm's operating system, the QNX-based BlackBerry 10, will only arrive in the second half of this year.

"There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership," Lazaridis said. "Jim and I went to the board and told them that we thought that time was now."

"With BlackBerry 7 now out, [the delayed] PlayBook 2.0 shipping in February and BlackBerry 10 expected to ship later this year, the company is entering a new phase, and we felt it was time for a new leader to take it through that phase and beyond. Jim, the Board and I all agreed that leader should be Thorsten Heins," he added.

Tough year

2011 was not a good year for RIM. The company saw its profits and market share slide as iOS and Android made gains not only in the consumer market, but also in RIM's traditional enterprise base. RIM also suffered a protracted and widespread service outage that eventually forced Lazaridis and Balsillie to apologise to their customers.

There comes a time in the growth of every successful company when the founders recognise the need to pass the baton to new leadership.
– Mike Lazaridis, RIM

The departing executives have faced repeated calls from the likes of activist shareholder Jaguar Financial to step down or at least split their roles as both co-CEOs and co-chairmen. It was reported earlier this month that they might give up their roles as co-chairmen.

Lazaridis said he relinquished his co-chair role "in order to return the public's focus to what is most important", namely the company, its products, brand and employees.

After the weekend's shake-up, Lazaridis is now vice-chair of RIM's board and chair of the board's new Innovation Committee, while Balsillie remains a board member and director. Board member Barbara Stymiest has been named as the new chair.

RIM's future

Lazaridis said he has such confidence in Heins, who had a 23-year career at Siemens, that he intends to buy an additional 50 million Canadian dollars' worth of shares in RIM. However, Gartner analyst Carolina Milanesi was less upbeat about the company's future, noting that Heins's appointment means an imminent sale of the BlackBerry maker is unlikely.

"This is a move to placate the investors for a while, but a move that is unlikely to bring the change needed," Milanesi told ZDNet UK on Monday. "The rumours until last night that the position would go to a financial person were more indicative of a strategy [of] selling the company, while with Heins the indication is that RIM wants to fix the business."

The Waterloo, Ontario-based company has to decide whether it really is staking its future on BlackBerry 10, she said, noting the recent release of BlackBerry Fusion release, which lets customers manage iOS and Android devices as well as BlackBerry smartphones.

"If not, and they decide that Android is the future, they need to focus on enabling Android in the enterprise where vendors are still struggling today," Milanesi said. "RIM needs to understand and communicate quite clearly what it wants to do." 

Heins's vision

In a YouTube video of Heins posted by RIM on Sunday, the new CEO laid out his view of how he wants the company to change. In one comment, he said RIM needs more discipline in getting its products and updates onto the market as soon as possible.

"We're a great innovative company, but sometimes we innovate too much while we're building a product, so I want to spend more time on prototyping, on exploring and research and development while we're building a product, on a separate stream," he said.

This is a move to placate the investors for a while, but a move that is unlikely to bring the change needed.
– Carolina Milanesi, Gartner

BlackBerry 10 has to "ship on time" and be a "blow-the-socks-off" experience for RIM's corporate and consumer customers, he added.

Heins's comments echo criticisms laid out by an anonymous employee in an open letter in July, which described the situation at the BlackBerry maker as "chaotic" and argued the company needed to cut back on the number of projects in development.

The new RIM boss said he believes the company can get back on track, if it shifts its approach.

"If we continue doing well what we're doing, I see no problems with us being in the top three players worldwide in the next years in wireless," Heins said. "What we need to get a bit better at is to have a little bit more of an ear toward the consumer. We need to be constantly communicating with our customers."

Heins kicked off his tenure by personally calling blogger Kevin Michaluk of BlackBerry fan site CrackBerry.com.

"Since launching CrackBerry.com in 2007, I have been wanting to get an interview with RIM's CEOs. It has never happened. With Thorsten, it happened in literally minutes, and it was the CEO who made it happen, not the blogger," Michaluk wrote.

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