It may not have come as a complete surprise that the co-CEOs of Research in Motion (RIM) have quit under pressure from shareholders. In fact, one may well ask why they limped on as long as they did after the near fatal wound that was the major outage in October of last year.
The company has been under fire for failing in a number of areas, not least of which is its failure to fully exploit the tablet market. The Blackberry PlayBook, like the HP Touchpad, failed to sell in anything like the numbers expected, resulting in inventories remaining stubbornly unsold and the company’s reputation suffering.
And so, we get the weekend’s developments of the co-CEOs, Mike Lazardis and Jim Balsillie stepping aside for Thorsten Heins, who was formerly the COO.
While we may be accustomed to the financial market dictating leadership over here in Europe, it may come as a bit of a shock for major multinationals to have their leadership culled by market forces. There are other examples of this, though not so many as such a fait accompli as the RIM instance.
There was of course, the recent situation with HP that saw Leo Apotheker ousted, but that was very much more board led. But a situation has been developing at Microsoft that has distinct parallels with the RIM experience.
Since last May, there have been investor led calls for CEO Steve Ballmer to step aside and let someone else have a go, as it were. Despite core revenues and performance being very good (server, enterprise software, business applications), in areas such as consumer services and mobile (smart phone and tablet), there have been criticisms that the company, or Ballmer rather, has not done enough.
Chief voice among the calls for a new leader is one David Einhorn, who runs the €6 billion hedge fund Greenlight Capital. Einhorn was famously critical of Lehman Brothers and the way it did business just before it was revealed to be a house of cards and collapsed.
The major criticisms seem to be that despite being in an enviable position as regards its ability to produce the software, services and hardware to succeed in markets such as consumer services, mobile devices and consumer search, the company is failing to do so. This perceived failure is then focused back on Ballmer and there have even been reports that personal bonuses have been withheld as the criteria for these were not met.
A sudden heave against Ballmer is unlikely in the near future, but the RIM example has shown the markets, and the world, that if the investors are not happy, there will be a case to answer. Ballmer was recently re-elected with a 92% vote share, but that is down from 95% at the last such re-election. By contrast, other board members were returned with 99% of the vote.
The real test will be the upcoming release of Windows 8, which has been designed specifically with tablets in mind. If the platform integration capabilities of Windows Phone and Windows 8 for tablets fail to light the touch paper behind Redmond’s mobility efforts, then a Lazardis-Balsillie like situation may not be out of the question.
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