Lazaridis

"If Lazaridis chafed at an executive seen as “Jim’s guy,” Balsillie also didn’t think much of a senior executive that Lazaridis had recruited, his old friend David Neale. The long-time Rogers executive who had helped steer Lazaridis to wireless data in the 1980s joined RIM in April 2010 as a vice president, advising the founder on strategy and marketing. Neale and Balsillie disliked each other. Balsillie viewed Neale as an unquestioning yes man at a time Balsillie believed his partner needed to confront hard truths about the business. Neale in turn didn’t think highly of Balsillie’s behavior and brusque manner. “He and I did not enjoy an easy relationship,” says Neale. To other senior executives, Tobin and Neale seemed like two more wedges distancing the CEOs from each other. “The seeds [of division] I think were sown by the kind of people they were bringing on the team,” says Spence. “You see the distance because of the people they’re hiring; they’re not aligned on who is the right person for the organization.” Personality and style notwithstanding, Tobin was thrust into a difficult situation in his new job. Tobin didn’t meet Lazaridis until he started; at their first encounter, the founder grilled Tobin on his high-tech experience and declared that Tobin should really be working for him and not Balsillie if he expected to oversee a software business.5 “I realized every single meeting I had with Mike I had this awkward position of being a direct report to Jim in a meeting where Jim wasn’t there and I didn’t really know the status of their relationship at any given moment,” says Tobin. “I spent a lot of time with [Lazaridis] going, ‘So what exactly are you supposed to do?”"

"Conlee’s responsibilities and title were split between handset chief Thorsten Heins and manufacturing head Jim Rowan, both of whom he had groomed, leaving Lazaridis with two chief operating officers; a third, Morrison, still reported to Balsillie. Lazaridis’s direct reports, including software head David Yach and chief information officer Robin Bienfait, met regularly with Morrison to ensure they were on the same page, “but nobody could stand up and say ‘Okay, all opinions heard, this is the decision’” as Conlee had done, says a former senior executive. “It slowed the company down. It was not that people didn’t perform in their roles; it was just purely the structure that was established did not lead to good, sound, and convergent decision making.” With Conlee gone, inertia and frustration set in at the senior levels. “There wasn’t the individual accountability that we needed,” says Morrison. “It was too splayed because it was across three different organizations. Now, all of a sudden, Mike is trying to manage something, but he doesn’t have the genetic code Larry has.”"

"Perhaps the neatest trick was making wireless e-mail appear faster and more instantaneous than it actually was. On other devices users had to log in, pull down messages, and wait for their device to process them. With RIM’s e-mail device messages arrived automatically, but the device still had to process them. That took time. Users didn’t need to know that. Lazaridis instructed his developers to hide the back-end process: users should be buzzed not when the e-mail arrived, but after it had been decrypted, decompressed, and dumped into their in-box, ready to read."

"A more helpful insight came from a participant who spent much of his professional life on the road. He approached with dread his evening hotel ritual of downloading the day’s flood of e-mails on his laptop. It was a chore that inevitably involved hours of reading and replying. “If I just had a tool to help me with my volume of e-mail on the road, I’d pay anything,” he said. Convenience, not urgency, was a more potent marketing pitch. This was a device that could free customers to catch up on office communications on their terms. Idle time between meetings or lost time in taxis and airport lounges could be productively spent processing e-mails. Employers would be able to reach staff any time of the day and employees would not have to be tethered to computers. Bosses would never know e-mails were coming from baseball games, the golf course, or family homes. The next step was positioning the service in the crowded technology market. Lazaridis was so captivated by the concept he argued RIM should sell the Leapfrog as a new product category: e-mail pagers. Castell and RIM’s marketing vice president, Dave Werezak, disagreed. Too many other innovative communicators, such as IBM’s Simon or the EO Personal Communicator, had failed in part because they tried to define new categories and consumers didn’t appreciate or understand what the products offered. RIM managers were influenced by management guru Geoffrey Moore, who argued in his influential book Inside the Tornado that innovative technologies had a better chance of success if sold within a proven product category.1 The most popular handheld device going in 1998 was the Palm Pilot, sold as a personal digital assistant, or PDA. Palm Pilot was a huge hit because it allowed busy professionals to easily store and update calendar and contact information on a pocket-sized device. If the e-mail-enabled Leapfrog came with calendar and contact applications, Castell urged Lazaridis, then RIM could position its product as the most comprehensive PDA on the market. Lazaridis, who used a Palm, worried RIM would be seen as a weakling against the Silicon Valley darling. Castell’s pitch, however, was compelling: “If you want addresses and calendar, go for Palm. If e-mail is important, we’re the PDA to choose.” Lazaridis was swayed. His busy engineers were handed another impossibly short deadline to add calendar and contact applications to the device."

"RIM capitulated to pressure for more choice by opening its e-mail system to other handset makers. They would design keyboard phones, and RIM would supply software and links to connect the phones to its data network. In exchange RIM charged licensing fees. RIM called this new program BlackBerry Connect. Many employees couldn’t understand why RIM was rushing to aid competitors. It wasn’t. Like some Balsillie strategies, appearances were deceiving. Balsillie and a small team of executives had other ambitions for Connect. This was more than a licensing program; it was a Trojan horse. RIM’s long-term game was to buy time. Competitors who signed up with RIM would be preoccupied making BlackBerry Connect phones rather than creating their own rival e-mail service. RIM gained an inside peek at rivals’ long-term development plans and opened the door to new customers. Every enterprise customer signed up under the program represented another stream of service access fees for RIM. It wasn’t empowering competitors at all; it was locking in its lead. “Sometimes you have to disguise yourself as another animal in the forest,” says Tyler Nelson, a RIM vice president who ran the program. Lazaridis was initially concerned that Connect would distract RIM’s engineers and designers at a time when RIM was racing to keep up with demand and introduce new BlackBerrys. He never worried, however, that corporate customers would abandon RIM for the Connect phones offered by other handset makers. Their Connect phones could not hope to match the security and encryption protections that made BlackBerry such a valuable business communications tool. “We knew ultimately that the enterprise customer … was never going to go for it, because it was not a verifiably secure solution,” he says. “It was our advantage. It wasn’t hidden; it was in plain sight.” Unaware of RIM’s hidden agenda, phone makers in Europe and Asia flocked to the program to strengthen their presence in North America with BlackBerry-enabled phones. Samsung was so keen to make a Connect phone that one of its employees idled for weeks at a Waterloo hotel waiting for RIM to grant him a meeting with Balsillie. Finally the visitor appeared at the company’s offices in a distraught state. Samsung, he explained, would not let him return home to his family and job in South Korea unless he secured a Connect deal. RIM opened Connect discussions with Samsung, and the manager was free to fly home. RIM’s most dedicated Connect partner was Nokia. The Finnish phone maker had been trying to break into the U.S. wireless business market for years, and Connect looked like an easy shortcut. Nokia’s executives did not worry about dancing with a competitor because Balsillie played down RIM’s ambitions during initial discussions in 2002. “He emphasized he didn’t believe RIM would be able to compete in the hardware business [and] might even give up their hardware business,” says Panu Kuusisto, who managed Nokia’s Connect agreement with RIM.…"

"To Lazaridis, it was important that users only ever had one menu to choose from, rather than a multitude of options like most software programs. If you were typing a message and clicked the trackwheel, the menu would only bring up items that were relevant to crafting and sending an e-mail. It would also automatically highlight the Send function. The team developed other shortcuts, giving full functionality to thumb-typers without adding extra buttons. If a user typed two spaces, a period would appear at the end of the previous word and the next word would be automatically capitalized. If a user held down a letter key the machine would capitalize it, eliminating the need for the shift key. Ideas began to spill forth from across the company and got coded into the platform: if a user typed B while reading an e-mail, the e-mail would scroll to the bottom; T brought the user to the top, and U to the next unread message. To send a new e-mail, a user had to type only the first few letters of the recipient’s name in the To: box and all potential matches would show up until enough letters had been typed to eliminate all others. Clicking on a person’s name in a calendar item would bring up a new e-mail, with that person’s name already in the To: slot. Perhaps the neatest trick was making wireless e-mail appear faster and more instantaneous than it actually was. On other devices users had to log in, pull down messages, and wait for their device to process them. With RIM’s e-mail device messages arrived automatically, but the device still had to process them. That took time. Users didn’t need to know that. Lazaridis instructed his developers to hide the back-end process: users should be buzzed not when the e-mail arrived, but after it had been decrypted, decompressed, and dumped into their in-box, ready to read."

"RIM had arrived at the bridge every high-tech start-up must cross in the pursuit of long-term success. It’s the point at which a product triumph forces a fledgling company to shift from unfettered free-form innovation to the steely commercial discipline required to foster sustainable growth. In Silicon Valley, founders often fall by the wayside after innovations take off. Creative entrepreneurs are often poorly suited to managing business success. Venture capitalists have the upper hand because they typically demand major or controlling stakes when betting on risky start-ups. This wasn’t the case in Waterloo. Balsillie had rebuffed venture capitalists, carefully raising cash through public stock offerings that did not overly dilute its founders’ clout. Lazaridis was the company’s largest shareholder, with an 11.2 percent holding in 2001, followed by Balsillie, with 9.3 percent, and Lazaridis’s childhood friend Doug Fregin, with 3.5 percent. Combined, their stakes would make hostile advances difficult."

"Brenner was unwilling to give up part of his responsibilities and didn’t get along with Tobin. It took them months to negotiate the transfer of responsibilities and executives; Tobin wanted to control project management and set the road map for what services and apps would be developed, but the two never reached an agreement and that role largely stayed with Brenner. “I think Alan assumed that my job was to market and sell whatever [apps and services] he wanted to build, and my instructions were that he needed to build to what I required,” says Tobin. “Because the roles and responsibilities weren’t clear, it created some conflict. Alan felt he was capable of handling the business side as well as the technology side.” Balsillie didn’t agree—he felt Brenner should stick to technology—and Lazaridis didn’t care; when Tobin tried to escalate the issue to both Balsillie and Martin, he was redirected to Yach, Brenner’s boss, who sent him back to work things out with Brenner. To many it made no sense to split the responsibilities between two people; it just caused confusion and gridlock. “Those two jobs aren’t really separate,” said McDowell. “Tobin wasn’t looking for Brenner to tell him what to do, and Brenner wasn’t looking for Tobin to tell him what to do.… The net result is a stalemate.”"

"Lazaridis would add to the confusion by visiting engineering teams with shopping lists of ideas. He became so enthusiastic about some design concepts that when he intoned, “This is important,” his engineers often mistook his passion for marching orders. When Lazaridis’s chief lieutenant, Larry Conlee, noticed engineers working on unauthorized parts or software, he quickly realized his boss had paid a visit. Mindful of pressing delivery dates, he asked Lazaridis to choose his words more carefully. Don’t use the word “important,” he warned, because there were too many people “saluting and clicking their heels.” RIM’s engineers learned to be more cautious about embracing Lazaridis’s ideas. It soon became accepted wisdom that no one was to follow Lazaridis’s orders unless he issued the command three separate times."

"The solution, Lazaridis and Balsillie decided, was an unorthodox plan to infiltrate Fortune 1000 companies. RIM made it easy for influential managers and executives to link the addictive BlackBerry system into their corporate e-mail without involving the IT department. Their secret weapon was the software designed by RIM engineer Gary Mousseau. The program was included free with every BlackBerry purchase and took only fifteen minutes to install on any computer. Once it was running, it connected the BlackBerry to a user’s e-mail and the device was operational. RIM even priced the devices so they fell within executives’ discretionary spending budgets. The idea was to get a critical mass of top executives in a company to use BlackBerrys before their CIO realized a new technology had infiltrated the business. This would be all the leverage RIM needed, Balsillie and Lazaridis believed, to convince CIOs to acquire sophisticated RIM servers to centrally manage large volumes of BlackBerry devices from within their IT departments. The CIO end run was a unique strategy, making BlackBerry the first IT product ever sold from the top down, pushed by senior management onto their IT organizations."

"Balsillie and Lazaridis never called each other out in the Tuesday meetings as relations between their organizations deteriorated. “They were mindful of how they were being perceived” and kept any disputes behind closed doors, says Patrick Spence, who by now was one of three sales vice presidents and Balsillie’s most trusted lieutenant. But tensions between the two CEOs were evident to others. Balsillie encouraged his salespeople to press on quality issues and would chime in, “Did you get that, Mike?” to which his co-CEO would tersely reply, “I got it.” The Tuesday noon grillings rattled Lazaridis. He felt blindsided and thought the salespeople were grandstanding. He would stop meetings when they raised quality issues and ask for more information. “What is it? Can you send me details? I need to understand,” he’d say. Lazaridis would leave the meetings steaming, then walk into a meeting with his direct reports and Morrison at 1:00 p.m. where he would let loose and demand answers. By early 2010, Lazaridis’s chiefs were telling their assistants to clear their Tuesday afternoon schedules in anticipation of long, difficult meetings with their boss. “I got the worst of it,” says Yach, an assessment shared by others. “After hearing about an issue for the first time at the Tuesday noon meeting, I’d immediately e-mail folks to get me background and updates in time for the one o’clock meeting. My most common thought [during the Tuesday meetings] was, ‘I miss Larry.’” Sometimes, Lazaridis says, his direct reports would tell him they were already well aware of an issue raised by Balsillie’s side of the house and dealing with it. “It bothered me that I was hearing about stuff [from salespeople] that I should have heard from the team that reports to me every week,” says Lazaridis. Morrison says, “It became evident [Lazaridis] was losing control of some of these problems and he wasn’t getting straight answers … [or] support from people he needed.”"

"A final draft of the handout circulated by e-mail to directors and advisers on January 19, 2012, began with the statement that RIM’s board, “acting on the recommendation” of Lazaridis and Balsillie, had unanimously approved Heins as the new CEO. Much of the remaining announcement praised the leadership and devotion of the departing chiefs and their courage in sacrificing short-term gains for long-term growth by acquiring QNX and its operating system. This was hardly a reassuring message to rebellious shareholders. A board faulted for deferring to CEOs would be seen to have bowed again, this time to their proposed successor, Heins, an insider who shared responsibility for PlayBook and BlackBerry 10 delays. Instead of reassuring shell-shocked shareholders that a new beginning was under way, the company chose to honor the status quo, hailing years of strategic confusion and product failures as courageous long-term vision. The approach did not sit well with at least one director. “Jesus Christ. What are we doing?” director Roger Martin fumed in a blistering e-mail reply to the company’s directors, CEOs, and advisers. The press release was doomed, he believed, by leading with Balsillie’s and Lazaridis’s recommendation for Heins, as their successor. To his mind, the proposed press release failed to send a clear message that meaningful change was occurring at the embattled company. “We have to remember shareholders are pissed,” Martin continued. “If Thorsten was so fantastic time and time again, why the huge problems at RIM, people will ask?… Let’s stop. Let’s think. Yes, there are persistent storm clouds and threats. Yes, this company is learning to be a $20 billion company. I get all that. But it doesn’t give us license to stop thinking.”"

"Yach charged his software teams to work on alternative plans. Two possible solutions emerged, neither of them ideal: Yach favored running the existing Java BlackBerry platform on top of QNX’s core technology in order to support existing apps. But many developers, including Alan Brenner, championed a different approach: tacking the BlackBerry interface on top of an Android operating system with QNX at its core. Android offered ready-made technology that would enable RIM to push out a new device to market quickly, with a running start in consumer apps, where Android was a significant player. But it would also mean apps developed for BlackBerry wouldn’t work anymore. By late 2010, Yach embraced a third option: combining RIM’s Java operating system with Android’s. Lazaridis wanted no Java on future BlackBerrys and was troubled by Android: he felt an Android BlackBerry would be less distinguishable from countless other smartphones and would be far less secure than the QNX or existing BlackBerry operating systems because Android was written using publicly available open-source code. Businesses were sure to reject it. Nevertheless, Lazaridis allowed the debate to play out for months. “There was no right answer,” says one engineer involved in the discussions. “You just needed to pick an option and run with it. There was more and more discussion about looking at options than making a decision. And making the decision wasn’t easy because ownership wasn’t there. I think the decision was clear in Mike’s mind: there was going to be a rewrite, done by brand-new people. It was probably the right decision. But the execution of that decision,” in the engineer’s view, “was done poorly.”"

"e-mail should be so instinctive that users would never have to interrupt their train of thought to hunt for a command. “We found 90 percent of the time you did the same thing,” says Lazaridis. “So at any one point, there…"

"What they didn’t know was that Lazaridis and Balsillie had been having exit discussions for weeks. About the only thing the two men can agree about when it comes to their late fall meetings is that they happened. It is instructive and telling that partners who have different recollections of how they came together in 1992 are also at odds over how they fell apart nineteen years later. The conflicting versions could be a reflection of the opposing personalities of independent, strong-willed CEOs. Just as the professorial Lazaridis and hard-charging Balsillie pursued different tactics to conquer the smartphone market, it is inevitable perhaps that they have clashing narratives about their roles in RIM’s rise and fall. It’s also possible that by December 2011 their relationship had become so dysfunctional they were no longer listening to each other. It is entirely possible that both their stories are true."

"When Balsillie raised quality issues in private with Lazaridis, “I don’t recall a heated conversation, but I do recall Mike saying, ‘This stuff is really, really hard,’” says Balsillie. “Mike refused to acknowledge that we had any material technical issues, to the point that he would miss meetings so that he didn’t hear the negative feedback and hoping that we would not discuss it in his absence. That was wishful thinking, and I personally didn’t think we had any way around it. If anything, everyone was counting on Mike to see the flaws first and fix them as soon as possible.”"

"Lazaridis believed RIM’s new device was such a convenience that it would become the preferred mode for exchanging e-mails. For that to happen, the user interface on the Leapfrog—what the customer saw and experienced when using the device—had to be intuitive and easy to operate. “Remove think points,” was one of his favorite phrases. “I liked teaching people to put themselves in the minds of the users,” Lazaridis says. “I wanted to get to the point where users prefer to use [the device] to send messages than actually power their computers.”"

"The solution was clever but flawed. By adopting Bridge, Lazaridis was solving a RIM problem, not a customer problem."