RIM Co-CEOs step down, take lower positions on board

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Date: Monday, January 23rd, 2012, 06:08
Category: News, wireless

Sometimes you just need to make a chance.

In a surprise step, RIM confirmed late Sunday that its two CEOs Jim Balsillie and Mike Lazaridis would resign from their top positions. Per the Wall Street Journal, the two would stay on as board members and shareholders for the BlackBerry designer, but would hand over direct leadership to one person, current COO Thorsten Heins. Board member Barbara Stymiest would be promoted to an independent board chairman.

There would be “continuity” from the earlier strategy, Heins said, but it was “not going to be a standstill” that preserves the existing order. He was confident that BlackBerry 10 would lure customers and developers to RIM, but hinted that licensing the OS on a “case-by-case basis” might be an option if the software is successful.

A new board member, Fairfax Financial Holdings CEO Prem Watsa, was coming in to further shake up the board.

Balsillie and Lazaridis cast their partial exits as voluntary, but also in the wake of an imminent panel decision that suggested the board changes. Balsillie claimed that the jump would have good timing now that BlackBerry PlayBook 2.0 and the first BlackBerry 10 phone were both on schedule.

While portrayed as voluntary, the shift would come after what many consider RIM’s worst relative year of performance on record. The company bled market share for the core BlackBerry smartphone line virtually every quarter, and its belief that the BlackBerry PlayBook would take on Apple quickly fizzled as it had to ship fewer and fewer tablets and cut the price of the PlayBook by as much as 60 percent just clear stock. The company repeatedly gave overly optimistic guidance for most of 2011 and was regularly confident in imminent turnarounds that didn’t materialize.

The co-CEO structure was widely criticized, both for being very unusual in the industry but also for a self-reinforcing structure that made it harder to challenge their opinions. Their joint leadership of the board of directors also made it doubtful that other board members would significantly challenge their authority. Many credit the late responses to the iPhone and Android to a disbelief they could be outdesigned and a reluctance to respond directly.

Heins, meanwhile, came to RIM in 2007 from the CTO role at Siemens. While some of RIM’s troubles came under his watch, he has shown signs of improvement by cutting down the lag between announcement and shipping for BlackBerry phones from months to weeks.

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