RIM offers lessons on what not to do when competitors gain ground

by John Izzo

My friend told me that he wanted to invest in RIM (Research in Motion), the maker of the Blackberry and a company whose stock price has fallen from almost $80 two years ago to under $15. While still profitable, RIM’s share of the smart phone market dropped to 10 percent from 44 percent two years ago and it is routinely believed to be in big trouble because of the popularity of Apple and Android products.

Many companies, small and large, have been at this precipice where the business is starting to fall apart. Some returned to greatness and some went extinct. This is a moment of truth for RIM and it is a moment of truth that can happen for a large corporation or a small business.

RIM made the smart phone a reality. In fact, its product name “Blackberry” became the word we used for any device like it much as any picture taken was called a “Kodak moment” even if you were using another camera brand.

Still, those who are most successful are almost always most vulnerable when things change. Think of all those small business owners who opened up a video or music store only to see technology change their business overnight. When things are booming it is often hard to see that someone is about to try to put you out of business. That is one reason I regularly suggest any business to constantly ask: What could someone do that would overnight threaten my very existence? Is my service, reputation, product or cost falling behind? Are my competitors innovating faster than I am?

You may need to examine what it is about the basic personality of the business that needs to change. Maybe it is your leadership style — one that does not empower people or make them want to stay. Maybe it is your focus on near-term profits instead of long-term investment. When my small consulting practice stalled, I realized that we had stopped investing in activities that would pay off in the long term such as writing articles, networking and speaking at conferences.

RIM needs to go full throttle in creating new things, even if they fail. IBM, which also was in jeopardy of fading away, started new ventures left and right and often took some of its best executives from existing lines to start new ventures. IBM had a lot of failures, but it also had a lot of successes. RIM should not assume the future will look like its past.

IBM hardly makes any computers anymore. Maybe RIM won’t wind up creating a better smart phone. Maybe it will create something entirely new. Never get hung up on thinking you will have to stay in the business you are in. Fuji now makes a lot of money off a cosmetic company, just the kind of departure from the core that Kodak never mastered. I think many small businesses assume that they will be doing the same thing years from now that they are presently doing.

Think of your business not as selling a particular product but being an enterprise that provides solutions for customers. The products may change over time and smart businesses are always prepared to move into a different area. In fact, assume over time that your business has to change so you are always looking for the next “thing.”

To survive, RIM needs to sell us its story. I love Apple products. But Apple isn’t just winning consumers and investors because of the product, it is also because we bought its story:  The guy in the dark sweater unveiling a new world for us to touch and feel.  RIM is a company that has lost its story and I am guessing it might be lost inside the company as much as it is outside.

My friend runs a small landscaping business, but the story he sells is a hard working immigrant who will work as hard for you as he worked to build a new life in a new country. He tells you that story and it makes you want to buy from him. Remember that 50 percent of our connection with a brand is emotional, not rational.

So what did I tell my other friend about buying RIM? I said, “Go to YouTube. Listen to what RIM’s leaders are saying. If they aren’t taking bold action to shake things up fast, buy Apple.”

John Izzo is a speaker and adviser to companies on corporate culture. He is author of six books including “Stepping Up: How Taking Responsibility Changes Everything.”