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Illustration of Research In Motion CEO Thorsten Heins. (ANTHONY JENKINS/THE GLOBE AND MAIL)
Illustration of Research In Motion CEO Thorsten Heins. (ANTHONY JENKINS/THE GLOBE AND MAIL)

THE LUNCH

Lunch with RIM CEO Thorsten Heins: Time for a bite, and little else Add to ...

Those who know him describe Mr. Heins as an intense, thoughtful and demanding technologist, a true believer in RIM who is close to his executives, has high standards and likes a good debate. He hikes and rides a BMW motorcycle, but has quirkier pursuits too: In a town hall meeting the day after he took charge, Mr. Heins told RIM employees he enjoys Formula 1 race simulations. “I’ve been in a real car, also, but that’s a different story,” he said.

Mr. Heins was unknown in North America before being thrust into the CEO’s suite. He joined RIM in 2007 after a lengthy career at Siemens AG, the German conglomerate. As a senior executive there in the early 2000s, he was sent to save the company’s aging optical networking division in Asia-Pacific from cheaper upstarts.

“It was an old portfolio – kind of riding this horse, riding this horse – and then the Chinese came in and, just, bam, they hit us on price, everywhere,” Mr. Heins told me previously. “It happened in [telecom] infrastructure 10 years ago with Huawei, ZTE and UTStarcom, and it’s happening with smartphones again.”

Judging by the present state of the telecom infrastructure business, the analogy to smartphones is as unfortunate as it is apt. Just as Nortel Networks is now bankrupt and gone and industry stalwarts such as Ericsson and Alcatel-Lucent are fading, so it is with mobile device makers. Old-guard innovators like Palm, Motorola and Nokia are dead or struggling. Smartphones have become a commodity. Volume and scale matter. RIM is slashing a work force of about 16,000 employees. South Korea-based Samsung has around 220,000. The math is not that complicated.

Lothar Pauly, who rose to become CEO of Siemens Communications in 2005, worked with Mr. Heins for about a decade, later providing Mr. Lazaridis and Mr. Balsillie a reference. Mr. Pauly said Mr. Heins gave Siemens’ optical networking group three directives: Take the lead back in innovation, become profitable again and reclaim market share. That involved “cutting heads,” as Mr. Pauly puts it. Not only was Mr. Heins’ strategy successful, it was valuable training for a similarly dire situation at RIM.

Mr. Pauly, now at a venture capital firm, said Mr. Heins’ later appointment to lead Siemens’ mobile phone unit did not go nearly as well, and the unit was eventually sold. “He tried to turn it around,” Mr. Pauly said, noting the unit was likely doomed anyway. “He has seen the good days and he has seen the bad days. He’s a more balanced manager than a manager who has seen only growth.”

After seven months on the job, Mr. Heins is more willing to be critical of RIM’s errors. Looking back, he says, the BlackBerry rose to prominence on four key pillars: typing, security, wireless data compression and battery life. As the company grew, Mr. Heins admits “we missed … paradigms.”

One such paradigm shift, he says, was ignoring the move to fourth-generation (4G) wireless networks in the United States. RIM’s engineers thought 4G was a fluffy marketing term and didn’t build any devices, ending up sidelined as carriers such as Verizon mobilized vast advertising budgets to promote RIM’s rivals.

Another mistake was underestimating the popularity of touchscreen phones such as the iPhone.

“If you have a great touch interface, people are actually willing to sacrifice battery life … which we thought wouldn’t happen,” Mr. Heins says. “Same thing with security. Some companies decided that, ‘Maybe I can let go on some security a little bit.’”

This is what the industry calls the BYOD phenomenon – bring your own device. Corporations, banks and government departments that were once BlackBerry-only are now BlackBerry-optional.

There are valuable holdouts, though. Wherever he goes, the CEO always pays attention to who’s using what phone; at a recent business conference in London, “most of them used BlackBerrys,” Mr. Heins said. “It’s all about security, reliability, typing.”

Corporate and political leaders and celebrities who don’t have time for Angry Birds embody the image RIM is trying to sell: BlackBerrys are for busy people.

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