RIM at the Edge

Andrew Binns, Managing Principal

It seems that RIM is the latest tech company to find it difficult to adapt quickly.  In his Wall Street Journal article, Will Connor points out some important points that are specific to RIM’s decline, but common to many tech companies that are in a similar situation.  While most tech companies don’t have two CEOs with completely different strategies (arguably the most controversial aspect of RIMs corporate structure), they do have problems with developing their ambidexterity.

CEOs need to be at the head of the charge when it comes to strategic change and execution.  Ideally, they will know how to balance existing business revenue streams with exploratory streams.  As we mentioned, in RIM’s case, there were two leaders with two strategies: Mike Lazaridis, who wanted to push his idea of creating a whole new Blackberry with an innovative operating system, and  Jim Balsillie, who wanted to push the technology licensing option.  If they had understood the steps to building an ambidextrous organization, they could have treated the new blackberry as an emerging business opportunity and the licensing of existing technology as their legacy stream. Yes, it’s possible that the new technology would have overtaken the legacy business, but that’s the paradox of change.

It’s also possible that the new Blackberry could flop due to RIM being too-far behind the Apple and Android curve, but we’ll save that for a later post.  Hypothetically, let’s say that the licensing option became RIM’s legacy business and the new Blackberry was determined to have the best chance of helping the company evolve as the emerging business opportunity (EBO).  If the new Blackberry took off, it could eventually feed new technology into the legacy business.  Here’s how RIM could have ensured that its EBO had the chance to thrive:

1)    Active and frequent Senior-Level Sponsorship:  This ensures that there is clarity of strategy and organizational alignment, and that there is support available.  Of course, this is assuming the Senior-Level leaders are aligned as well.

2)    Dedicated A-Team Leadership: Put the best people on the job.  Younger managers often lack the networks needed to nurture an embryonic business within the larger company.

3)    Disciplined Mechanisms for Cross-Company Alignment: An explicit goal of the EBO process is to address business opportunities across the company to make sure the established businesses provide support to the EBO, even if it runs counter to their short-term interests.

4)    Resources Fenced and Monitored to Avoid Premature Cuts: Funds need to be allocated and used according to plan, not re-allocated to existing businesses.  There is a tendency to poach the new business’s resources when nervousness sets in.  Try to avoid this.

5)    Actions Linked to Critical Milestones: This is key in making sure the EBO is moving in the direction and at the rate the company needs.  Milestones are not necessarily only tied to financial metrics and are reviewed in monthly meetings.

6)    Quick Start, Quick Stop:  Speed is essential.  If an EBO isn’t meeting its milestones, it needs to be stopped, or morphed into something else that will.  Get the idea to market quickly, experiment, learn, and either iterate or stop the venture.

Swiss Watch Success Syndrome

Professor Michael Tushman talks about why the Swiss Watch Industry wasn’t able to adapt quickly enough to avoid a massive downturn.

What do you think are the best examples of “Success Syndrome”?  How did these companies overcome the barriers to innovation?

Change Logic’s Dr. Wendy K. Smith at TEDxUD

Wendy Smith is Assistant Professor of Organizational Behavior at the Alfred Lerner School of Business at the University of Delaware. Wendy’s work focuses on how organizational leaders manage strategic paradoxes – simultaneously managing strategies for today and tomorrow, innovation and existing products, financial and social bottom lines.

Don’t Re-write Your Past

Andrew Binns, Managing Principal

In her blog for the Harvard Business review, “If You Don’t Like Your Future, Rewrite Your Past“, Rosabeth Moss Kanter encourages companies to use narrative as a way to shake them out of their old, embedded patterns.  On one hand, she makes a solid point: narrative is powerful and spurs people to action.  It enables readers to empathize–to put themselves in others’ shoes and develop a better understanding of the issues at hand.  It encourages them to think about a better future.  On the other hand, could it be possible that there is an important distinction between re-examining the past and re-writing the past?  Re-examining implies a deep inspection of why strategies did or didn’t work.  Re-writing implies being selective about the past in order to get to a new future, which could potentially weaken a leader’s authenticity.  That’s a precious commodity when asking people in organizations to trust you. We believe the re-examining is the way to go for the following reasons:

1)       Transparency – South Africa’s Truth and Reconciliation Commission is perhaps an extreme example of dealing with past mistakes to enable healing, but in every organization undergoing change there is an opportunity to reduce tension through honesty, not the doublespeak of rewriting the past.

2)      Quality of talk – Moss-Kanter quotes IBM. Yes, narrative is important to IBM’s transformation. But, Sam Palmisano also introduced quality dialogue into the company. He bravely invited all 300,000 employees into an online conversation about the corporation’s values and retooled the planning process to make it a strategic dialogue.

3)      Fail Forward – IBM also experimented with creating the future before it made its enormous leap from the safety of product silos. It initiated a series of ‘Emerging Business Opportunities’ that enabled it to learn what it would mean to become a solutions-based business services company. These experiments did not always work. The company had to learn to fail and examine its mistakes with honesty.

We suggest business leaders place more emphasis on learning from the past through transparency, open dialogue and experimentation; less on telling wishful stories. Organizations change when there is a shared desire to let go of the past and move into a new state; it is not clear to us how ‘rewriting’ can help that process.