August 6, 2011

RIM Cost Cutting Won’t Cut It

The Battle
Apple is BE DiFFERENT
This is not the first time I have written about Research in Motion (RIM). The links are above.
My views have been consistent: RIM ‘s competitive position is faltering because they have not moved off their original (tired) strategy of selling Smartphones. Flogging Technology. Pushing features. Compare this to Apple’s strategy of launching hundreds of thousands of applications which create unique and interesting experiences for their fans. And Google’s strategy to leverage their platform and functionality for mobile users.

In the beginning when they literally had no competition the pure product play worked for RIM as it did for any innovator in the early adoptive period of a disruptive technology. The Blackberry device sold like hot cakes and RIM became an investor’s delight. However, I have predicted that the winner in this arena will be the supplier that innovates around Experience Creation not products and technology. And I think Apple has the clear advantage (today) over everyone else.

The recent announcement that RIM plans to layoff people as a cost reduction measure tells me they are in SERIOUS TROUBLE . Cost cutting isn’t a strategy. It’s a reaction to a strategy that in fact is NOT WORKING. It is a short term tactic to preserve margins in the face of an eroding market position. It’s meant to placate the investment community. It’s an admission that they cannot solve their financial challenges by successfully competing.

I am not a fan of short term cost cutting. Bad stuff can happen. Customer service can suffer because the wrong costs are removed. External market activity can be given a lower priority than looking internally for efficiency improvements. Customer programs can be curtailed or cut out entirely. Employee training can be suddenly viewed as “discretionary” and substantially reduced.

Valuable employees leave and take with them their experience and expertise which they gladly give to another company (usually a competitor). The remaining employee population starts to worry about their own future; productivity declines.
The Company’s Brand suffers. Their people-cutting actions speak volumes about their lack of humanity to the markets. People leaving start talking on social media about how they have been treated and about other “goings-on” in the company that may not be flattering.“The Cut” can actually exacerbate an ready bad situation.
There is only one viable option for RIM (sorry, but I’ll say it again). They MUST dump their technology-centered strategy. Start innovating around VALUE and EXPERIENCES for their Fans. Time to change the game. The current direction isn’t working.

And PLEASE. They need to get off the copycat approach. They cant effectively copy Apple or Google. They have proved they don’t measure up.
I’m afraid if RIM can’t renew themselves (which I think they can, by the way. They just need a serious intervention) they will fail.
If you’re not DiFFERENT you’re dead, or soon will be. Want proof? Is Nortel still around?

Final point: NO organization can survive with two CEO’s.
Tick.. Tick… Tick… Tick

Cheers,
Roy


Join me on Twitter
Connect with me on LinkedIn

Strategy Creation | Marketing | DiFFERENT or dead? | Permalink
Posted 8.6.11 at 05:20 am by Roy Osing | Read Comments (0) | Leave a Comment