In case you didn't hear, during the past 4-5 days BlackBerry Ltd. (formerly known as Research in Motion, or RIM) has announced that they (1) have generated a $1 billion loss (!) in the last fiscal quarter alone; (2) plan to lay off 4,500 "staffers" (35% of the company's employees); (3) will become private again if the intended $9/share stock buy-out by a Canadian hedge fund Fairfax Financial goes through.
So, after allowing a healthy company (modest $300 million volume in 2002-2003; respectable and still okay $3 billion before the introduction of the iPhone in 2007) to get unmanageably huge ($20 billion in 2011), the mastodon got crushed under its own weight.
Well, first of all: Dah! I thought it was obvious to everyone that sleek iPhones will keep pushing BlackBerries into the proverbial corner - when you stop being "the cutting edge," you can only go this far on the price incentives. In fact, not only iPhones, but also Google's Androids and Microsoft's Windows Phones surpassed BlackBerry's devices in their service capacities.
I do have some questions, though, regarding the etiology of this grand failure.
How did the company get so stagnated in less than 30 years since it was formed and mere 14 years since it introduced its first email pager? Where were all those Ivy-League graduates who were hired to manage innovations, operations, marketing, finance and human resources? Where were the $700/hour consultants and public accountants? What did they do with all those expensive Business Analytics and Performance Indicators organized into pretty dashboards? Why didn't they regroup, contract, reinvent, restructure?
I'll tell you where and why? The dumb asses, greedily preoccupied with the value of their personal stock options, were staring at the market ticker instead.
When a company grows with an exponentially increasing speed, like cancer, the sensible management by capable people becomes impossible, simply because their supply is too short. To fill the gaps, a trivial approach is adopted, i.e. hiring according to the laundry list of garden-variety requirements. Unfortunately, conceptual thinking and understanding of fundamental principles cannot be substituted by expensive diplomas, high test scores, and flowery resumes. If you go the standard route, all you get is a bunch of highly-presentable empty suits with steely eyes, strong voices, unsubstantiated self-confidence, and not a single original thought in their heads. Thus, the entrepreneurial brilliance that made the company possible in the first place completely disappears.
Real business is not a multiple-choice test or a text-book case study. It's far too dynamic and complicated to be approached with basic school techniques, no matter how ivy the school is. And the world doesn't slow down for a creature too big to coordinate its own movements. There are unproven theories that giant dinosaurs, such as Stegosaurus, had a "second brain" - an additional nervous center responsible for the movement of their hind legs and tails. Makes sense to me, because an ogre with no brain power at all, is not able to coordinate any of his movements; let alone quickly react to changes around it.
Even more important question for me personally is why wouldn't people let this diseased monster die its very natural, evolutionary death of being stomped out by the stronger competitors? Why pour almost $5 billion into this carcass? Has Fairfax Financial been bribed by the Canadian government into preventing even larger job losses? Did US Treasury, so keen on protecting the stock-market investors, participate in this scheme as well? Unless the hedge fund is seating on some miraculous technological break-through, politics is the only explanation I can come up with for this waste of money.
Maybe if BlackBerry were let to die, the other members of the dinosaur herd would've taken notice and treated their gigantism with some surgical partitioning. Maybe they would've even stopped hiring according to the bullshit diploma-ranking and personal connections and started looking for the real spark of an intellect in their management. Alas, we probably will never know.