RIM's demise stems from arrogance

It didn’t have to come to this, says Canadian Business Deputy Editor James Cowan, of RIM's slow and steady demise.

High-school students learn Shakespeare’s tragic heroes were each doomed by a fatal flaw—Hamlet by his indecision, Lear by his pride and so forth. It may seem too erudite, too beard-scratchingly self-satisfied, to cast Research In Motion’s business troubles as a Shakespearean tragedy. But the comparison is instructive on one point. RIM’s problems—its diminished market share, its tumbling stock price, its late products—all stem from a single flaw. RIM was felled by its executives’ arrogance. Arrogance informed all of their poor choices over the past five years; arrogance continues to drive their strategy today.

It was arrogant to dismiss Apple’s iPhone as a technically inferior product that no consumer would want. It was arrogant to assume that corporate customers would remain loyal, even as better smartphones swarmed the marketplace. It is now arrogant to think the long-promised, endlessly delayed BlackBerry 10 operating system will be so revolutionary that investors will forgive all of RIM’s past sins. Certainly the new features alluded to so far will be far too little, far too late. In a recent publicity blitz, CEO Thorsten Heins made some token gestures of humility, acknowledging in an opinion piece published in The Globe and Mail newspaper that RIM “has missed on important trends in the smartphone industry.” But by the end of the piece, he was scolding pundits “who have never made the drive to Waterloo” for pontificating on “software they have not seen or devices they have not touched.” The message? Shame on those of you who doubt us. Lost was any acknowledgement that if RIM had stuck to its deadlines, we would have seen and touched the devices long ago.

Here is where the Shakespearean comparisons fall apart. Tragic heroes are doomed by their flaws, but there was nothing fated about RIM’s collapse. Some say Canada simply cannot support a global tech company. Some say Canadian startups must sell out to succeed. So let’s be clear: it didn’t have to come to this. RIM’s current state is the result of its management’s actions. If they had heeded the persistent warnings of trouble ahead, RIM might still be the world’s leading smartphone company.

Nonetheless, there is no denying RIM’s fall is a national tragedy. It is tempting to jeer when the arrogant finally suffer for their hubris. The implosion of Research In Motion, however, means at least 5,000 people will lose their jobs. Canada’s largest investor in research and development could be broken apart and sold to foreign competitors. One of our great Canadian success stories now seems ready to conclude with a desultory whimper.

This magazine has been a fervent champion of RIM, even as others lost confidence. Just five months ago, we wrote there were many signs “RIM watchers are wrong about their terminal diagnosis.” This still holds. There is no reason to believe the company will die. But the cost of its arrogance is that it will emerge from its current tribulations as a shrunken, anemic version of its former self. For the good of Canada, we can hope that RIM manages the great transformation that Heins promises. But our optimism has its limits. We can now only celebrate what it once achieved and mourn what could have been.