Consumers are hanging up on BlackBerry in droves as they’re lured to sexier and sleeker smartphones and tablets. The depth of the challenges facing BlackBerry’s maker, Canada’s Research in Motion, is illustrated by its stock price freefall of more than 80% during the past two years and lower-than-expected sales.
RIM’s rise and fall has been quicker than most firms, but it’s a familiar story: a scrappy company carves out (or perfects) a new product or service, becomes a Wall Street darling and is seemingly invincible. That is, until the next big thing catches the industry Goliath flat-footed, and the company once deemed ”too big to fail” is either knocked out or slips into obscurity.
These seismic changes can be seen in many corners of the economy: from publishing and media companies trying to monetise their assets in an era of free content, to the US healthcare industry trying to adapt to new cost pressures while the Supreme Court decides the legality of proposed reforms.
Coming up with the right turnaround strategy is hard enough, but it can be even harder to make sure it sticks. I’ve outlined five steps that RIM executives can take to get the company back on a successful path. However, these tips can be applied to any company in crisis:
1. Keep the strategy-development period short. During the next 1,000 days, spend up to 100 defining the new strategic direction and the next 900 implementing it. RIM almost certainly needs to refocus on the business and government customers that were its original source of strength (and in fact it’s signalling that this is exactly what it’s doing). But RIM also needs to define how this new focus will benefit its customers and its shareholders. RIM could do this by:
- Explaining the security benefits of separating sensitive business data from personal applications.
- Creating more sales channels through complimentary solutions providers.
- Exploring ”heavy duty” applications for businesses such as rental car agencies.
2. Aim high, but separate aspirations from commitments. RIM needs to set goals that will excite investors and its own staff. But it’s also critical that the company rebuild its credibility, and it can start doing that by beating expectations. Many organisations mix up aspirations with commitments and end up missing multiple forecasts. RIM’s management needs to set near-term expectations below what they think they can actually accomplish and reconfigure discretionary spending accordingly.
3. Communicate simply and directly. Assume that people can only remember one line of your strategy pitch. Sure, you’ll need longer versions for the management team and board, but a one-liner is sufficient for the rest of the world. Think of the rallying cry of the Texas Department of Transportation’s famous anti-littering campaign: ”Don’t mess with Texas!” RIM’s latest brand statement – ”We need tools, not toys” – is a good start, but it’s missing a basic explanation of the BlackBerry’s advantages over its consumer-oriented competitors.
4. Lead by example. Executives need to champion the change – which means acknowledging that things could be better. But it’s much harder to communicate why a company needs to chart a new direction absent a clear and credible threat. A leader who’s willing to commit to change and make a strong case for it is an indispensable starting point.
RIM could begin by making some tough decisions about what it’s going to stop doing. Focusing on enterprise customers is great, but it doesn’t make sense for RIM to also pledge its commitment to the consumer market – one where it’s fighting a losing battle.
5. Move quickly. Too many companies come up with a great strategy and then do … nothing. Firms need initiatives they can implement quickly that clearly signal change. Part of Apple’s success is due to its enormous range of applications. RIM needs to work better with other people’s software. One way for RIM to quickly show its commitment to its new strategy would be to make a series of high-profile app deals targeted at enterprise customers over the next six months.
It’s often hard to let go of the comforts of the status quo, even if we know the current system is broken. Although we may understand intellectually why we need to change, we still hope that everything will somehow return to normal. But when change is the norm, leaders must be ready to guide their teams through uncharted waters using a combination of sound strategy and unwavering commitment – all while providing the clarity and tools to ensure that the entire organization is rowing in sync toward the same goal.
Stuart E Jackson is the president of LEK Consulting’s North America region and the author of Where Value Hides: A New Way to Uncover Profitable Growth for Your Business.
This article first appeared on LeadingCompany.