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RIM CEO Thorsten Heins (J.P. Moczulski/J.P. Moczulski)
RIM CEO Thorsten Heins (J.P. Moczulski/J.P. Moczulski)

ROB Magazine

RIM CEO Thorsten Heins: 100 days into the toughest job in corporate Canada Add to ...

DAY ZERO: January 22
On a brisk Sunday afternoon in late January, Thorsten Heins towers over a long boardroom table in RIM 10, one of the many sprawling low-rise buildings in Waterloo, Ontario, featuring Research In Motion’s logo. The lanky, 6-foot-6 Bavarian physicist is about to officially replace two of Canada’s most famous businessmen. He fiddles with one of the company’s PlayBook tablets as he waits patiently for them to arrive. “I love this system,” he says.

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Mike Lazaridis, the man who founded RIM in 1984, appears shortly after, his hair, as usual, combed into an immaculate silver wave above his distinctive heavy-set features. Long-time co-CEO Jim Balsillie, the driven, globe-trotting salesman, arrives last, removing his BlackBerry earbuds as he enters. Including PR reps and two Globe and Mail reporters (I’m one of them), there are seven of us in the room. Even other C-suite executives are said to have no idea that “Mike and Jim,” the men who built the country’s most valuable technology company—a firm that, in 2007, was worth more than the Royal Bank of Canada—are stepping out of the picture. Most will find out later today in an e-mail sent to senior executives. Some will say they are shocked; some won’t be around for much longer.

But everybody, in a broader sense, already knows what has happened up until this point: RIM, once a seemingly unstoppable industry leader, has slipped to pitiable laggard. The company has suffered one embarrassing strategic misstep after another, consistently releasing unsexy products, with glitches, behind schedule, to little or no acclaim. The share price has fallen by almost 90%, from an all-time high of $150 in 2008 to about $17 in January, erasing much of Balsillie’s and Lazaridis’s vast wealth in the process. The postures around the table are telling. Lazaridis, who will remain vice-chair after this shakeup, leans forward, as if anxious to explain himself. Balsillie, who will stay on the board as a director, at least for the time being, appears impatient, fidgety—though I’m told this is how he usually looks. Their long-time PR rep, Tenille Kennedy, sits quietly beside them, as Mike and Jim explain how they went to the board with their succession plan. On the other side of the table, Heins sits comfortably, hands clasped together, leaning back in his chair. Seated beside him is a new face, Michael Sitrick, founder of an American PR firm that specializes in, among other things, “crisis management,” “criminal indictments,” “environmental controversies” and “bet-your-company/bet-your-life situations.” A little hired help for a not-so-average day. Heins, a mild-mannered former Siemens executive from Munich with a stiff salt-and-pepper side part, insists that RIM is not broken, that it has the ingredients for success, and that he is the man to lead the company at this time. “I know how to do this,” he says. “I have the skills to do this.” He promises to hire a chief marketing officer. “There’s no need for me to shake this company up,” he says confidently. “Our product is great.” If anything, he adds, “we just need to talk about it more.”

In the next 100 days, Heins will have the toughest job in corporate Canada, if not the world. While it may be unfair to analyze the reign of a CEO based on a single fiscal quarter—after all, much of what Heins is shovelling through now is the managerial detritus of the previous administration—it’s also the case that RIM may not have much time. (Remember how quickly Palm disintegrated?) From Day One, Heins will be tasked with maintaining momentum in the company’s overseas strongholds—emerging markets such as Brazil, Indonesia and Nigeria—while working to stem market share losses in North America, where the handset maker’s failures are magnified by an unforgiving competitive landscape that includes Apple and Google. And, more importantly, he needs to release a flawless new BlackBerry 10 device, with a rich application and content portfolio, ideally before kids go back to school. If he doesn’t, well, RIM may never recover.

DAY ONE: January 23

Around 10 a.m. the following day, Heins takes to a stage within RIM 4—another squat company building, this one near the University of Waterloo campus—to address the staff he’s now meant to lead. There are about 100 people in the room, and roughly 14,000 employees tuning in from around the world. Lazaridis makes introductions, and stresses how difficult this is and how much he loves the company. Balsillie says much the same, then demands the staff show fealty to a new regime: “I want your word that you will give Thorsten 100% support. Do I have your commitment?”

Heins, who has been with the company since 2007, steps forward. Without a jacket but with a BlackBerry holster secured to his belt, he seems to personify the split messaging that has dogged RIM in the iPhone era, when it has become unclear exactly what a BlackBerry brand stands for: Work? Play? Both? Neither? In one sentence he stresses the need for “flawless execution.” In another he proclaims that “we rock in Asia-Pac.” He addresses the idea that RIM’s internal processes have been “bipolar”—less a nod to the recently strained and dysfunctional co-CEO structure than an admission that RIM needs to be more decisive about its strategy. “It just gives me hurt feelings if we have such great ideas and then we get kind of criticized in the public because we miss it by three months, or we’re not complete when we really want to launch something,” Heins tells the crowd. “Let’s just go rock ’n’ roll it,” he concludes. “And, you know, we will all be having a lot of fun together. And a lot of success. Thank you.”

For a company long ruled by two men with serious cases of founders’ syndrome—who often responded to criticism of their management with wide-eyed innocence and denial—this level of clarity about the need to tinker with RIM is refreshing. “I’ve been at the company for over 10 years,” says Wes Nicol, who manages RIM’s presence in the Caribbean and the Andean region of South America. “[Heins brings]a fresh energy, and a fresh approach to working together. It really, sort of, energized the company.” The pep rally was also a chance to help paint a more relatable picture of Heins, who generally plays up a stereotypical Germanic love of efficiency and process. Heidi Davidson, senior vice-president of communications, lobs him questions e-mailed from staff. Asked how he likes to spend his spare time, Heins mentions a hobby not exactly unknown to computer engineers. “I actually love race simulations on the PC, so I race Formula 1,” Heins says. Perhaps because people might get the impression Heins is not a man of action, Heins adds quickly, “I’ve been in a real car, also, but that’s a different story.”

Outside of RIM 4, Heins’s appointment has not brought an end to the cycle of negativity surrounding the company. Earlier in the morning, following a conference call with analysts, the chorus of “Thorsten who?” has already begun. The Wall Street Journal’s Marketplace editor, Dennis Berman, points out on Twitter that Thorsten Heins’s name doesn’t even auto-fill in a Google search (it does now). Whereas a day earlier, Heins wanted it known that RIM’s marketing troubles were his top priority, now it seems Heins himself has become a marketing problem. The company’s already-battered stock sinks more than 9% in heavy trading when markets open. On Day One, at least, the bleeding continues.

DAY FIVE: January 27
While Heins’s appointment does little to shift the narrative in North America that RIM is sliding into irrelevance, the company’s momentum in emerging markets is another matter. Last year, in Africa, for example, RIM saw 741% growth in handset shipments. It’s Heins’s job to provide fresh clarity, direction and resources to managers of these mystical growth areas, places where very few people use iPhones and the BlackBerry is king.

On the Friday evening after the shakeup, Greg Wade, RIM’s managing director for Asia-Pacific, walks into his Singapore office and finds the place buzzing. He stops to take in the scene. “Wow,” he thinks. “If you could bottle up this vibe—and it’s a true vibe—just imagine what we could accomplish.”

DAY ELEVEN: February 2
Around 4 p.m., Heins walks into the lower level of Toronto’s historic Harbour Sixty Steakhouse to meet with a group of Bay Street analysts. In this era of austerity, there are to be no $58 rib-eyes and certainly no $125 double porterhouses—drinks only. There is harsh questioning, and one senior RIM executive exchanges terse words with a respected Big Five bank analyst. Still, BlackBerrys outnumber iPhones in this room by a ratio of 15 to 2, according to Byron Capital Markets’ analyst Tom Astle. The BlackBerry brand, while certainly bruised, retains some cachet with this crowd. And, for some of the audience, Heins’s humble but assertive tone strikes the right note. These analysts may not think RIM has much chance of turning itself around, but they seem to respect the new CEO’s approach, a quiet confidence tempered by a willingness to be more frank about the company’s failings. “His style was much lower-key than Balsillie’s,” says Astle, who points out that Heins demonstrated strong resolve. “I think his personality has brought more transparency to investors, and likely even internally in RIM.” Let’s face it: Heins was never going to get anything resembling a honeymoon in North America, where RIM’s downfall is generally depicted as assured, but, judging from the crowd at Harbour Sixty, the mood seems like it has the potential to shift—at least a bit.

DAY SIXTEEN: February 7

Heins is in Amsterdam today, addressing a crowd of European app developers at the behest of Alec Saunders, RIM’s evangelist-in-chief, who’s tasked with attracting third-party software developers to the BlackBerry platform. Saunders, who joined RIM as a VP during the summer of the 2011 shakeup, has a tough slog ahead of him. Apple’s iOS operating system has more than 500,000 apps, including hits like Instagram and Draw Something; the Android app market is not far behind. By comparison, BlackBerry App World (70,000 apps) has been shunned by some developers, who see bigger profits on other platforms. One such developer, YouMail, has gone so far as to issue a press release announcing it will cease development for BlackBerry, a sure way to garner attention from click-addicted news sites feeding on BlackBerry failures. (In April, Saunders will use his personal blog to call out the CEO of YouMail, telling him that from “one entrepreneur to another—I think it’s time to hang up the spurs, cowboy.”)

One long-standing complaint is that it’s too time-consuming to tweak software to run on each of RIM’s many devices, a costly annoyance that turned to strategic indifference as BlackBerry sales waned over the past year. Heins’s job in Amsterdam is to trumpet the impending arrival of RIM’s BlackBerry 10 platform, which will run across all new phones and tablets.

“It’s always great to be back home,” he opens. “I consider myself a European kid.” He shrugs his shoulders and raises his hands to cue applause. The casual vibe is quickly subsumed by managerial-sounding bravado as Heins goes on to list the countries in Europe where BlackBerry is the No. 1 smartphone. He starts with the Netherlands, which garners polite applause from the crowd, and continues: “The United Kingdom. Spain. Saudi Arabia. United Arab Emirates. Kuwait. And South Africa.” Besides the U.K., where BlackBerry market share is slipping, these are not global economic powerhouses. RIM’s list of corporate bragging points is dwindling—as its rivals’ lists are lengthening. But right now, it’s worth Heins’s time to play up BlackBerry’s global success, over and over again; Saunders needs some good news. Without it, he won’t be able to persuade app developers to bother. In that case, Saunders and Heins might as well hang up their own spurs.

DAY THIRTY: February 21
RIM releases a software update for its PlayBook tablet. This sounds kind of dry, but the original device—which has great hardware—was hugely criticized for its lack of e-mail, calendar and contact-list functions that BlackBerry phone owners already enjoy. To call this update crucial would be an understatement. RIM has been deeply discounting the PlayBook at retailers since November—reducing the price from as much as $700 to as low as $200—and the general consensus has been that the product is lacking.

Early reviews are favourable, if you look past the obligatory “it would have been nice if it had this at launch” comments. One Toronto-based market analysis firm releases an encouraging report saying the PlayBook now accounts for 15% of the Canadian tablet market. Pay no mind that PlayBooks make up an infinitesimal portion of both global tablet sales and the total hardware RIM sells, or that the discounting led RIM to take a huge writedown of nearly half-a-billion dollars on revalued inventory in December—this type of incremental progress qualifies as full-blown momentum, and provides proof that people are still interested in the very latest BlackBerry experience. It’s also a sign of hope for RIM’s next-generation operating system, BlackBerry 10, which is a direct descendant of the PlayBook’s sleek multi-tasking software.

DAY SIXTY-SEVEN: March 29

Few can honestly say they didn’t see the cliff coming. Throughout March, bearish industry analysts lobbed increasingly gloomy predictions for RIM. Jefferies & Co.’s Peter Misek said the chance of a negative pre-announcement was greater than 50%. A Barclays analyst titled his RIM note, “Grim and Getting Grimmer.” On the morning of March 29, the day the company will report its fourth-quarter earnings, it’s hard to see any silver lining in the carnage. The depth of how bad things have gotten is still startling. The first real inkling comes about an hour before the earnings call, when a source tells me that a bunch of senior managers are being let go in another “big shakeup.” On the call, the company reports its results, which miss earnings estimates for the fifth straight quarter, and announces the departure of at least two senior executives. A “strategic review” of the business is promised. We learn that Balsillie, too, is resigning from the board. All this, and still no chief marketing officer appointment. (RIM will fill the position on May 8.) I am told that this veritable torrent of bad news, particularly on the earnings call, is deliberate: Get it all out now, a former RIM executive tells me. Set a low water mark and create a positive halo around every single bit of progress from this point on, regardless of how incremental (say, a product being delivered on time, without glitches). The call is also meant to be a bit of a bridge to investors, some of whom have been clamouring for RIM to break itself apart and sell. Heins outlines on the call that his review will consider licensing RIM’s software to third parties, and when asked about selling the company, he doesn’t rule it out. “There’s no guarantee of success,” Heins says. One analyst, who doesn’t want to be identified, calls me to say with a hint of sadness in his voice: “This is the beginning of the end.”

DAY NINETY-FOUR: April 25

Shortly after noon on April 25, Thorsten Heins waits at RIM 10, in the Quasar boardroom, which sounds like it might have been named by Lazaridis. The room is identical to, but exactly one floor above, the boardroom in which we all met in late January. This time it’s just Heins, myself and Tenille Kennedy. The vista looking out over Waterloo’s quiet streets is much the same, though the snow has melted. Without prompting, Heins launches into a highly compressed summation of his priorities. He chops the table with his hand when he’s accentuating a negative point (denying reports that RIM might abandon the consumer market) and jabs the table with bunched digits, like a pickaxe, when he’s elucidating a priority (like the importance of the release of BlackBerry 10). Over the past few months, he says, he has been busy “providing focus to the company, making clear what counts, what everybody needs to work on.” Of his company, Heins asks rhetorically, “What’s our purpose? Why are we here?”

These are intriguingly existential questions from the CEO of an established company that, despite all of its problems, pulled in revenues of nearly $20 billion in each of the last two years. Heins tells me he has spent the last three months trying to figure out the answers. He’s travelled widely, meeting with employees across North America and Europe. “You see tons of BlackBerrys out there,” Heins says. He has been interacting with divisions that he previously had little contact with, such as sales. He’s met with the CEOs of many of RIM’s carrier clients, and launched a worldwide survey of BlackBerry owners analyzing how people use their devices throughout the day. From the outside, Heins says he’s hearing that people want RIM to survive, that security is still important to them. “Sharpen your saw, be good at what you’re good at,” they tell him. “Don’t let go on enterprise. This is your core.” That, of course, is the quintessential view of RIM: the security-focused corporate wireless service provider. But that doesn’t mean Heins thinks RIM doesn’t have to change structurally, in big ways. One of Heins’s great advantages is that he does not owe his career to RIM, that he sees few sacred cows among those likely coming to the slaughter. “It kind of allowed me to get a clearer view of what fits, and what doesn’t fit,” he says. “Think of it like a jigsaw puzzle. I kind of figured out a few pieces that I don’t need in my puzzle to be successful.”

DAY ONE HUNDRED: May 1

At 9 a.m. on his 100th day as CEO, Heins climbs another stage, this one at the Orlando World Center Marriott. It’s the annual BlackBerry World conference, and the mood is upbeat. After thanking developers in the audience for showing up, Heins unveils a new touchscreen BlackBerry 10 device, a prototype both in software and hardware. While an employee shows off the sleek functions—like a camera that lets you zoom in and wind back the frames to open a subject’s eyes—Heins looks like a father at his kid’s recital. “I’m so excited to have this in my hand and show it to you, because I know how much work has gone into it,” Heins says. As the demo continues, he can’t help himself. “I love, I love it,” he gushes. “This is so cool.”

While Heins is on stage—receiving generous applause—Twitter lights up with glowing BlackBerry 10 praise. The markets open, too, but RIM’s shares begin to sink. By the end of the day, shares are down 5.8% on the Toronto Stock Exchange. Two days later, they will dip to an eight-year low of less than $12. People are trading on the fundamentals—the company’s deteriorating metrics. They’re digesting the idea that, barring a takeover or something equally dramatic, RIM has a slow, punishing climb ahead of it.

If RIM is to mount a comeback, it will be based largely on software—an area in which it has traditionally lagged. But it can be done. There was a time in North America when the Big Three automakers looked like they had rusted away; they have since clawed their way back, reinventing themselves. And if you ask Heins what RIM needs to do now to reinvent itself, he lands on an anecdote about the high-powered CEOs whom he meets with regularly. Many of them now carry two devices: their reliable and utterly indispensable work BlackBerry (the Bold is a popular model) and an iPhone they use for fun. “My job,” Heins says, is to “make them carry one device.” The question is, which one will they choose.

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