Yoshikami: RIM, Innovation, and Narcissism
It's a sad thing to watch. A great brand and a company with a dominant position slides into obscurity.
Such would be appear to be the case with Research In Motion as competitors pounce on its missteps. The world appears to have found an alternative to its Blackberry addiction.
Innovation is the lifeblood of the technology business. Innovation is required as times change and consumer tastes evolve. It is often said that those who innovate are doomed to irrelevance and that certainly is the case in the technology space. Courageous strategic action is necessary that is less impacted by a blind trust in one's own perspective and instead recognizes that vision, coupled with pragmatism, is necessary for survival for success in the technology business.
Nokia, to their credit, has embarked on a rebirth plan. Though it may be a little too late, at least bold action was taken by leadership to try to differentiate their offering. One can only imagine what their current business condition would be if a more realistic and pragmatic approach was taken 5 years ago. But when all is going well, it is often most difficult to make the hard choices necessary to continue future business dominance. Innovation requires courage and a correct vision of the world and where it's headed. And the courage to change is sometimes hard to muster.
Innovation is a learned skill not often understood by senior management at companies. A few universities are attempting to make innovation a part of their offering as a way to embed into the DNA of leaders the need to be creative. This past week I was in Singapore teaching at National University of Singapore where I am a professor. The curriculum is clearly designed to help future business leaders understand complacency is a losing strategy. But not all leaders in the business community have the luxury of learning how critical innovation is while they are in the midst of business struggles. This is why it is so necessary for the natural ongoing perspective to be one that recognizes that constant reinvention must be an important part of business strategy.
For RIM, they too long believed that dominance meant a permanent correct perspective on the world and the future of technology. They had years to recognize that the world was changing and new competitors were not simply going to allow RIM to capture permanent market share. RIM leadership clearly loved their blackberries and could not imagine a time when they would switch to a new platform. But it does not matter what leaders love; it matters what customers love and demand. And not listening to customers and narcissistically focusing on one's own perspective has led this company towards growing irrelevance.
You might ask how Apple is any different as it's pretty clear at this company has strong belief in the products they offer. The differences is that Apple is focused on understanding what consumers want and where trends are headed. They then make business decisions based on that market understanding. And while public statements may suggest they are impervious to differing viewpoints, my contacts at Apple tell me there are continually vigorous debates about business strategy and product offerings. And yes, this occurred even when Steve Jobs was running Apple.
In a rapidly changing environment, the spoils go to companies which can adapt to competitive pressures and predict future trends. And companies that best capture market share are those that can operationalize great ideas, implement their plans efficiently, and tell the world their vision for the future. This requires a perspective rooted in innovation and committed to adapting to a changing environment.
Being a footnote in history was not RIM's goal. It is not what leadership expected when they had 50% market share 5 years ago. But such are the natural consequences of lethargy; your fate is inevitable if your thinking and action stagnates. It's startling to watch the collapse of a company that made such a difference and it's sad for RIM's employees and shareholders. But unfortunately, RIM appears headed towards irrelevance. What a difference 5 years can make if you fail to innovate.
Michael Yoshikami, Ph.D., CFP®, is CEO, Founder and Chairman of the DWM Investment Committee at Destination Wealth Management. Michael is a CNBC Contributor and appears regularly on the network. DWM is a San Francisco Bay Area-based independent money management firm that provides fee-based wealth management services to institutions and individuals around the world. Michael was named by Barron's as one of the Top 100 Independent Financial Advisors for 2009, 2010 and 2011.