I’ll say one thing for co-chief executives: two scapegoats are better than one. Since Research in Motion’s fortunes took a sharp turn for the worse last year, its dual-leadership structure has taken a beating. With the BlackBerry-maker’s decision last week to revert to one chief executive, the double-edged knives really came out for Jim Balsillie and Mike Lazaridis.
The initial noises out of the shake-up at Research in Motion, although it was more far-reaching than had been expected, are not especially encouraging for the investors and analysts who want radical action.
Mike Lazaridis and Jim Balsillie, the joint chairmen and chief executives of the maker of BlackBerries, have relinquished both roles. But they have handed over to an insider who looks determined to stick to the same course.
Thorsten Heins, the new chief executive, told the FT:
“I want to maintain the focus on enterprise, but we need to communicate a bit more with our consumers. We need to do more marketing.”
It’s more common to cite strategic than structural differences as a reason for resignation. But Carla Smits-Nusteling – one of the most prominent women in Dutch business – is quitting KPN, the telecoms group, because, in the words of Tuesday’s statement, “she does not agree with the internal governance of the company in the new executive structure”.
Ms Smits-Nusteling, KPN’s finance director, sat on its management board (which is itself overseen by a supervisory board, in the continental European style). KPN has expanded that board from three people to 12, by bringing in all the divisional heads.
This could be about power. After all, a one-third say in decisions about a company’s operational direction is different from a one-twelfth say. Jos Versteeg, an analyst at Theodoor Gilissen, a Dutch bank, told Dow Jones:
The new management structure might compromise some of [Ms Smits-Nusteling's] executive authorities, handing over more power to the CEO, which could be the reason for her dissatisfaction.
AT&T has spent the past few weeks denying that it was about to drop its bid for T-Mobile USA, despite the heavy regulatory opposition. It has now done precisely that.
I was originally against the deal, arguing in March that:
The US performs badly in fixed-line broadband services in terms of price and speed compared with other countries, hurt by Verizon and AT&T having shrugged off the imposition of competition. The last thing the US now needs is AT&T, which already has mobile operating margins of more than 40 per cent, pulling that trick again.
Come on, DoJ. Just say no.
The US Department of Justice subsequently came out against the deal, along with the Federal Communications Commission. AT&T has taken the medicine, paying the proposed deal’s $4bn break-up fee and going back to square one. Read more
American Airlines finally plummeted into bankruptcy last week, eight years after workers’ wage concessions seemed to have helped parent AMR plot a route out of disaster. Managers hadn’t wrung enough from the workforce in 2003, some claimed. The staff hadn’t pulled their weight since, said others. Many concurred that the “discipline” of bankruptcy would have been good for American.
The news that AT&T is taking a $4bn charge to cover the break-up fee it will owe to Deutsche Telekom if its takeover of T-Mobile fails is concrete evidence of how badly it has done in its campaign to convince regulators. To which I say, good.
I have been against the AT&T and T-Mobile deal from the start, arguing that it would enable AT&T and Verizon to replicate in mobile the duopoly that they and the cable companies enjoy in fixed line telephony and broadband. Read more
Research in Motion’s offer to compensate its users affected by the BlackBerry network failure of the past week with $100 of free applications is a neat idea in that it costs the company far less than the apparent gain to its customers.
Given the zero cost of distribution and the fact that RIM only has to pay the wholesale cost to publishers of games such as Sims 3 – as well as gaining the benefit of hooking BlackBerry users into its ecosystem, it is a modest price to pay. Read more
I think most obituaries of Robert Galvin – who helped take Motorola from a family firm to a $11bn leader in mobile phones – understate his contribution to management practice, for he was, at the very least, the godfather of Six Sigma.
The omission is understandable. Six Sigma – which focuses managers obsessively on improving quality and eliminating defects – was the process improvement technique of choice for large companies in the 1990s, but it seems to have faded from public view recently. I spent a day at General Electric’s Crotonville leadership development centre in September and I didn’t hear Six Sigma mentioned once. Yet 15 years ago, when Jack Welch was in his pomp, the air would have been thick with boasts about how many “black belt” leaders of Six Sigma initiatives GE had bred. Read more
For people unable to communicate easily via BlackBerry, BlackBerry users are making a lot of noise. Faced with a third day of disruption to BlackBerry services around the world, they’re venting their outage outrage on Twitter and in the blogosphere. Many are reaching the same conclusion: this is a communications crisis for Research in Motion.
Well, no. As one of BP’s advisers commented last year when the oil company was being lambasted for its response to the Deepwater Horizon explosion: “It’s not a PR crisis; it’s a crisis.” Read more
It’s little surprise that Spain’s industry minister should emphasise the Spanishness of Telefónica. On Tuesday, Miguel Sebastián said the important point to take from the telecoms group’s radical reorganisation was that its headquarters would stay in Spain. So far, so predictable.
What’s more extraordinary is how calmly Spanish politicians seem to be handling news that the national champion is, in the FT’s words, “to axe its Spanish division as a standalone business”. Mr Sebastián actually went on to point out that the fact that Telefónica’s newly created digital division would be based in London was a sign that the telecoms group is ever more global. Read more
It’s sad to see Eastman Kodak reduced – at least in many investors’ eyes – to a punt on the photographic pioneer’s patents.
On Wednesday, its shares jumped by a quarter on the suggestion that its intellectual property could be worth more than the company itself. It’s a sign of the times as much as it is a sign of Kodak’s failure to find a convincing answer to the digital photography challenge: Google’s $12.5bn agreed bid this week for Motorola Mobility was largely based on the value of the mobile phonemaker’s patent portfolio. Read more
One problem with examining the road not taken is that it’s usually impossible to tell whether you took the right route until it’s too late to change course.
The announcement of the Google-Motorola Mobility deal sent me back to notes from an interview with Nokia’s chief executive Stephen Elop in March, to remind myself how difficult it is to make strategic leaps in a fast-changing industry. You’ll recall that the Finnish group ended up selecting Microsoft as its smartphone partner rather than Google. Read more
I’m fascinated by Huawei Technologies: it encapsulates all the challenges that fast-growing Chinese companies face – from governance to branding – and then some.
It’s already the world’s second largest manufacturer of mobile network equipment by revenue, but Huawei’s latest big bet is to be one of the world’s top three mobile handset brands by 2015. Wan Biao, chief executive of Huawei’s device unit, set the target at Wednesday’s launch of its cloud-computing smartphone, the “Vision”, based on Google’s Android operating system. Read more
My favourite bon mot from Richard Rumelt, the UCLA strategy expert whose interview fuelled my column this week, was his comment that in any boardroom discussion of strategic options, acquisitions should be “guilty until proven innocent”.
Prof Rumelt’s new book Good Strategy/Bad Strategy makes clear he is no fan of M&A. “The problem with engineering growth by acquisition,” he writes, “is that when you buy a company, especially a public company, you usually pay too much.” Read more
One of Nokia’s biggest challenges is to maintain its home-grown Symbian operating system, while simultaneously producing attractive Windows-run smartphones under its brand-new partnership with Microsoft. Exactly how that would be done was one of the questions I couldn’t yet answer in my recent two-part analysis of Nokia’s future.
It turns out the challenge will be met, in part, by offloading it onto Accenture. On Wednesday, Nokia announced that 3,000 staff – mainly Symbian software engineers – would transfer to the consultancy (an additional 4,000 jobs will be lost across Nokia).
I don’t know what the Finnish for “hot potato” is, but Accenture has been handed one. Read more
Huawei’s attempt to soothe fears about the US government and investors about its corporate governance by disclosing the names of its board members – not too radical a step, one might think – begs some questions.
Huawei has two image problems – its links to the Chinese government and People’s Liberation Army, and the degree to which the family of Ren Zhengfei, its founder and chief executive, are involved in running the business. Mr Ren is a fomer PLA engineer. Read more
One day in early February, Samuli Nyyssonen of Nokia boarded a plane in Bangalore working for one company and disembarked in Helsinki working for another.
While the software engineer was in the air on February 11, Stephen Elop, the company’s chief executive, had told its 130,000 employees about a sharp change of strategic direction. Nokia would ally with Microsoft in smartphones, while at the same time boosting the group’s basic phone business in an effort to reach the “next billion” users. Read more
There is no doubting Stephen Elop and his lieutenants’ resolve to rebuild the mobile phone company’s platform, having declared that it is burning. But having interviewed the chief executive and some of his leadership team – as well as current and former staff – for my two-part analysis of the company’s management challenges, I’m left with a nagging question: is the crisis at Nokia grave enough to trigger the necessary cultural and behavioural change at the Finnish group?
It remains a profitable company, with a strong balance sheet and the largest share of mobile phones by units shipped. Barely five years ago, it was riding high, the darling of business school professors and commentators, and that good feeling is hard for veteran Nokians to forget. Read more
Perspiring slightly under the arc-lights of an in-house television crew, Stephen Elop, Nokia’s chief executive, is about to deliver for the 10th time his “town hall” address to staff. He must sell to them the most radical strategy change since the historic tyres-to-timber Finnish conglomerate turned itself into the world’s leading mobile phone company in the 1990s.
Twitter’s fifth birthday today comes as AT&T’s announces it wants to buy T-Mobile USA for $39bn to form the largest US mobile provider. The two events are more than a coincidence.
AT&T produced some slides for its announcement showing the rapid growth in mobile data use – 8,000 per cent over four years according to its calculations – and is justifying the acquisition partly by warning of spectrum exhaustion.
Twitter, meanwhile, is the first big social media company to be conceived with mobile in mind. It’s 140-character limit for messages was based on the original 160-character limit for phone text messages. Read more