How Blackberry Failed to Adapt

At Toronto's Globe and Mail, "Inside the fall of BlackBerry: How the smartphone inventor failed to adapt":

Late last year, Research In Motion Ltd. chief executive officer Thorsten Heins sat down with the board of directors at the company’s Waterloo, Ont., headquarters to review plans for the launch of a new phone designed to turn around the company’s fortunes.

His weapon was the BlackBerry Z10, a slim device with the kind of glass touchscreen that had made Apple Inc. and Samsung Electronics Co. Ltd. the dominant names in the global smartphone market.

But one of RIM’s directors was frustrated by what he saw, and spoke out, according to one person who was in the room. There is a cultural problem at RIM, he told the group, and the Z10 was a glaring manifestation of it.

The speaker was none other than Michael Lazaridis, the genius behind the BlackBerry, the company’s co-founder and its former co-CEO. Minutes earlier, he said, he had spoken with Mr. Heins’s newest executive recruits, chief marketing officer Frank Boulben and chief operating officer Kristian Tear.

Mr. Boulben and Mr. Tear had dismissively told Mr. Lazaridis that the market for keyboard-equipped mobile phones – RIM’s signature offering – was dead.

In the board meeting, Mr. Lazaridis pointed to a BlackBerry with a keyboard. “I get this,” he said. “It’s clearly differentiated.” Then he pointed to a touchscreen phone. “I don’t get this.”

To turn away from a product that had always done well with corporate customers, and focus on selling yet another all-touch smartphone in a market crowded with them, was a huge mistake, Mr. Lazaridis warned his fellow directors. Some of them agreed.

The boardroom confrontation was a telling moment in the downfall of Research In Motion.

Once the giant of the smartphone business, RIM, which was renamed BlackBerry Ltd. in the summer, is now on its knees. The company reported a $965-million (U.S.) fiscal second-quarter loss Friday, primarily because of a massive writedown of Z10 phones that sit, unsold and unwanted, about eight months after they first hit the market. The company is cutting 4,500 jobs, 40 per cent of its work force, in a desperate bid to bring costs in line with plummeting revenue.

Investors, who have lived through the destruction of more than $75-billion of the company’s market value over the past five years, are still wondering how BlackBerry managed to blow its runaway lead and became a bit player in the smartphone market it invented.

An investigation by The Globe and Mail, which included interviews with two dozen past and present company insiders, exposes a series of deep rifts at the executive and boardroom levels.

Those divisions hurt the company’s ability to develop products just as it faced its greatest challenge from more nimble and creative rivals – and contributed to the downfall of Canada’s biggest technology company...

Lazaridis' cultural disconnect seems simply unreal.

More at the link.

RELATED: At the New York Times, "Quick, Hide the BlackBerry, It's Too Uncool," and "BlackBerry's Future in Doubt, Keyboard Lovers Bemoan Their Own."