As recently as five weeks ago, Jim Balsillie, who helped build Research In Motion into Canada’s biggest company by market value, was showing no signs that he was about to step aside as investors pushed for management changes at the BlackBerry maker.
“We are more committed than ever to addressing the issues at hand,” Balsillie told analysts on a Dec. 15 conference call.
Ups and downs of RIM’s stock
That all changed last week, when the Harvard University business graduate announced he’s leaving the firm he joined 20 years ago, giving up his roles as co-chairman and co-chief executive officer as the smartphone maker loses market share to Apple and Google devices. Mike Lazaridis, who founded RIM in 1984, is also surrendering his CEO and chairman roles.
“There comes a time in the growth of every successful company when it’s time for the leaders to pass the baton,” Lazaridis said. “Jim and I went to the board and we told them we think the time is now.”
While Lazaridis will stay on as vice chairman and head of an innovation unit at RIM, Balsillie will have no operational role and will remain a director after heading the business, finance and strategy areas for two decades at the Waterloo, Ontario-based firm.
“I remain a significant shareholder and a director and, of course, they will have my full support,” Balsillie said in a statement.
A native of Seaforth, Ontario, who grew up in the university town of Peterborough, Balsillie, 50, trained as an accountant and joined RIM in 1992. During his tenure, the firm transformed business communication, only to see competitors such as Apple seize market share when the technology spread to consumers.
While sharing the chief executive officer post with RIM co-founder Lazaridis, Balsillie developed a reputation for combativeness. His refusal to compromise cost the company hundreds of millions of dollars in a legal fight against patent-owner NTP and derailed his dream of owning a National Hockey League team. This year, it led to a shareholder revolt as he declined to step aside while RIM’s share price plunged.
“I’m the quant-jock from Peterborough who never quits,” Balsillie told students at Waterloo’s Wilfrid Laurier University in 2009. “You create this frame, this way of seeing things, and it manifests in everything you do.”
Lazaridis and Balsillie governed RIM in a unique arrangement as co-chairmen and co-CEOs. Lazaridis, who dropped out of the University of Waterloo after starting RIM in 1984, handled technology development while Balsillie took charge of the business side.
Revenue soared
RIM, formerly a maker of equipment such as radio modems, introduced the BlackBerry in 1999. The “two-way pager,” as the company called it, proved a hit among Wall Street workers and gained widespread attention when BlackBerry service provided an alternative to jammed cellphone networks during the 2001 terrorist attacks in New York. Balsillie helped persuade carriers such as Rogers Communications and Cingular Wireless to support the new technology.
RIM’s revenue increased an average of 78 percent a year from 1999 to 2009. The company’s market value soared to $83.4 billion ($84.5 billion Canadian) in 2008 from less than $1 billion (Canadian) in early 1999. For parts of 2007 and 2008, RIM was the country’s most valuable company, topping Royal Bank of Canada. In May 2008, Balsillie’s stake in the company was worth $4.83 billion, according to a regulatory filing.
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