January 31st, 2012 11:50 EST
Will RIM Disappear? OUTthink the Competition
Will RIM Disappear?
Over a lavish hotel buffet, looking out through Beijing`s famous smog over buzzing streets, I leaned over steamed crabs and stir-fried tofu to ask my tablemate about the future. What he shared scared me.
You see, this gentleman is perhaps one of the world`s foremost experts on mobile phone technology. He leads a globally disbursed team of engineers seeking to predict and plan ahead of the evolving mobile landscape.
I think they`re in trouble. I think they may go away. "
Now I`m a loyal BlackBerry user and I want to believe its maker, Research in Motion (RIM), is just facing a slump and will come out. But the company`s stock price has dropped 75% in the last year and today trades below book value. Maybe this mobile guru is right.
Why do you say that? " I challenged him. They added $5 billion in revenue last year and have millions of loyal users. My train rides into New York City each morning are still crammed with bankers banging away on BlackBerry keys. "
What he tells me has nothing to do with RIM`s famous follies in 2011 " the three-day email blackout, its tablet`s lackluster launch. It has nothing to do with design or handset speed. The things we read about on magazine covers are just window dressing. RIM`s strategic challenges lie much deeper. And if you understand them, you can help your company win.
You see, the places companies look for competitive advantage shift over time. When you are young you have to seek to do things your competitors will not copy, even though they can. As you get big you can start doing things your competitors cannot copy, even though they want to.
RIM`s original advantage came from that it developed a device " the very first BlackBerry " which used the old abandoned text network its competitors had once used to shuffle pager messages through the air. No competitors wanted to embrace that abandoned technology. The company advantage evolved over time. Clayton Christensen, the Harvard Business School professor famous for coining the term disruptive innovation, " once espoused RIM`s focus on creating a simple device you can use in the spare moment, waiting in line, on the subway.
But for the past decade or so, RIM has narrowed its strategic focus, depending heavily on one source of advantage. This is like a tree with one root. When you cut the root, the tree dies, while a tree with many roots will survive.
RIM`s primary advantage depended on its servers. It would sell IT departments on the safety of its email servers. If you choose BlackBerries, they argued, you can remotely delete all the information on a lost device, you can monitor access, you can lower your risk. So IT departments forced employees to use BlackBerries.
But Apple began eroding RIM`s foundation with the iPhone. BlackBerry users started buying
second iPhones and fell in love. They started asking their IT departments to let them use iPhones rather than company-issued BlackBerries. When IT departments said no, employees simply carried around two devices. They inevitably started using their iPhone email for work-related communication. At that moment, IT departments lost control over security. They had two choices: persist with the BlackBerry policy, forcing employees to accept approved devices, or cave in. One by one, corporations began piloting and then adopting a bring your own device to work " policy. They would no longer enjoy complete control but at least they could monitor which devices were being used by their employees.
At that moment " poof " RIM`s core competitive advantage disappeared. As soon as a company accepts the risk of a non-BlackBerry world, RIM`s relevance erodes.
Can RIM come back? It can if it moves swiftly. American Express, Western Union, GE, and many other great companies have successfully survived the kind of strategic surgery RIM will need. The key is to grow new roots, to sprout new sources of competitive advantage and strengthen the ones you already have.
If you want to avoid the dilemma RIM has cornered itself into, you want to establish multiple, redundant sources of competitive advantage. Here is what you want to do:
1. Calibrate your competitive advantage. My research shows you can actually measure the value of your sources of competitive advantage, and I`ve created a free tool to help you do this. You can access it on my website, www.kaihan.net, by clicking on Calibrate your Competitive Advantage. " Walk through eight questions and you get a score.
2. Look for new sources of advantage. If you have no advantage for any of the eight questions, brainstorm where you can create an advantage.
3. Track your score. If you followed RIM`s arc from founding to today, you will see its score rise and fall. When your score falls it means your level of competitive advantage is eroding. you need to correct early.
Kaihan Krippendorff is the author of Outthink the Competition " (http://www.kaihan.net/outthinkthe_competitionbook.html) and other top-selling business books. A former consultant with McKinsey & Co., today Kaihan helps companies ranging from start-ups to Global 1000s devise disruptive growth strategies. His clients include Microsoft, L`Oreal, Chubb, and GE. You can learn more at www.kaihan.net.
Judyth Piazza interviews Kaihan Krippendorff, Author of OUTthink the Competition ...