The game has changed. RIM’s management has not. Neither has its board.
Today’s latest (20 percent) plunge in the stock of Canadian based Research In Motion, this time because the company missed about every expected metric for the quarter, re-confirms that RIM needs a new operating system for its boardroom. It is the board, with a its succession of lame directors, that has permitted a culture of smugness, distraction and disconnection to cloud the judgment and performance of top management, and has too long tolerated a disingenuous streak in the way the co-founders deal with adversity. This is what has led to RIM’s fall from glory and the devastation of its stock. Management was playing its own game and setting its own rules. It thought success would continue indefinitely and the market would defer endlessly to its much-trumpeted wisdom.
The game has changed. RIM’s management has not. BlackBerrys are out. Apples are in. The kids decide what’s hip and everybody wants to be cool. Holding up a new Playbook is the definition of uncool. Launching it in the summer is the definition of stupidity. Only grandiose egos, too used to everyone genuflecting to their brilliance, could come up with this foolishness.
Long before it became popular, in the wake of the billions of dollars in company value that have been obliterated, we lamented the weaknesses of RIM’s governance practices . We predicted further casualties from a board mentality where management is effectively accountable to itself and still allows a regime involving co-this and co-that at the top that would not be tolerated in any mature, self-respecting company, let alone one that is experiencing something of a freefall in its shares. The stock is down more than 60 percent this year. No significant change in management, or the board for that matter, has been forthcoming.
RIM’s problems will not end until the board steps up, key management actors are forced to step down and a new culture of accountability is rebooted in RIM’s boardroom.