1. the_sleuth's Avatar
    A company with staying power
    By Ken Coates
    Sat Aug 06 2011

    We watch the Research In Motion roller coaster ride with consternation. The company plays a dominant role in the area surrounding Waterloo, and we all have a stake in its continued success.

    News of impending layoffs, its declining stock value, and market uncertainty send mini-shockwaves locally, even as the community watches the company finish new buildings, continue to hire technical staff and co-op students, and announce new products.

    It is easy to understand why folks are confused. I will admit, however, to being perplexed and little angry.

    I struggle to make sense of the debates about RIMs technology, and I certainly cannot fathom the mysteries of the contemporary stock market. In the latter case, the frightening combination of mob psychology, global financial crises, and the odd dynamics of technology stocks make it difficult to make sense of RIMs prospects. Analysts who focus on profits and core management seem confident about the company. Those who focus on American consumer trends are less sanguine. Canadians, still coping with the fallout from the Nortel fiasco, are worried. Everyone has an opinion.

    One trend in the RIM debate is particularly noteworthy. The idea is seeping into high-tech conversation that successful companies in this sector are like supernovas burning brilliantly, but exhausting themselves in short order. This is rooted in two elements: the smoke and mirrors euphoria of the dot.com boom and bust and the growing number of high tech firms in steep decline. The argument reinforces the casino gambling ethos of the modern stock market, with the task of getting in and getting out of a stock tied more to group psychology than to careful analysis balance sheets and long-term plans.

    At the risk of sounding old-fashioned, I continue to put a lot of stock in the management of firms. Leadership matters, and in this regard RIM is well-served. In Mike Lazaradis and Jim Balsillie, RIM has the most dynamic executive team in Canada. Lazaradis has an impressive scientific mind and is well attuned to the possibilities of 21st technology. Balsillie has no equal in Canada as a global marketer and dealmaker. Together, they orchestrated RIMs rise to prominence and obviously have the ability to keep the company among the worlds elite technology firms.

    Lazaradis and Balsillie have, moreover, a truly impressive group of senior managers, assembled from around the world. The talent and acumen that drove RIM to the top is still in place. While most agree the company did not fully anticipate the importance of mobile phone apps and youth culture in the smart phone industry, the reality is that few companies in the world can match RIMs understanding of business systems. And no one beats them on internet security. The company is truly gifted at international market development and has done more to bring locally manufactured products to the world than any other Canadian firm.

    Nothing is preordained in business. Companies are not doomed to fail any more than they are assured of continued prominence. The best firms adapt and respond. They drop old product lines and introduce new ones. Firms like Sony, Samsung and Microsoft rise and fall with the vagaries of the marketplace, but if they continue to create, invent and respond to international markets they continue to prosper.

    Think back over the past 10 years. RIM has adapted to changing markets and competitive environments. They have lost market share to Apple and android smart phones in North America, particularly among young people. But that is not RIMs key client base. The company will have to wean young people raised on other phones and convert them to BlackBerry when they get older.

    We have to recognize the significance of RIMs global presence. A few years back, I had one of the first BlackBerry accounts in Saskatchewan. Now, this little black handheld device is instantly recognizable around the world.

    When I was in an airport lounge on Thursday night I could, without moving from my chair, see eight people using BlackBerrys and two more on Playbooks. In the past few months, I have had much the same experience at airports in Tokyo, Hong Kong and Ottawa.

    When I was in Hanoi in early July, I had an animated conversation with a Chinese businessman about the merits of my new Playbook and his views of RIMs standing in Southeast Asia. BlackBerry billboards loom over the main streets in Lusaka, Zambia, where a leading politician joked that RIM should manufacture the smart phones in Africa and call them White Berries. The companys advertisements are commonplace in Croatia, England, Germany and dozens of other countries. BlackBerrys feature prominently in television shows and movies. Our region has long been blessed with companies that represent this community extremely well on the national stage. Global companies are rare and superstar firms like RIM more unique again.

    RIM is a product of and major contributor to the Waterloo areas technology ecosystem. It is no surprise that Canadas leading high tech firm emerged from this community, nor is remarkable that RIMs achievements continue to spawn innovative start-ups across the high tech sector. What has always impressed me about the Waterloo area is the prominent role that individuals like Lazaradis and Balsillie play in promoting innovation regionally and nationally. These two business leaders, and many of their Waterloo Region counterparts, are actively engaged with government and business organizations on issues relation to innovation and economic development. They spend a great deal of time working on national policy and on positioning Canada for global competitiveness.

    I do have serious concerns about the future of Canadas high technology economy but they are not tied to the current issues related to RIM. Rather, they related to the issue of loyalty to Canada in our high-tech sector. We suffer from what I see as a mobile innovation economy, where the departure of top technical employees and firms is commonplace. While some movement in healthy, the Canadian pattern of developing intellectual property to the point that it is marketable, rather than building a long-standing business, does not serve the country well. We do not just need RIM we need a dozen or more new RIMs. Loyal innovation economies like Japan, South Korea, Singapore, Israel or Finland work very hard to keep key personnel, intellectual properties, and companies in the country. The loyalty of their innovation sector is a key national strength. Canada does not compete well in this area.

    The Waterloo area, while not immune to the innovation outflow, is one of the leading Canadian exceptions. RIM works here and it draws foreign workers and companies to Canada. Waterloo is a magnet force and draws innovators like bees to honey. Companies like Open Text, Christie and Desire2Learn are among those fighting the long standing brain and technology drain, aided by Communitech and Canadas Technology Triangle. There is a reason the nation watches the Waterloo region so closely. One key to Waterloos success rests with entrepreneurial nationalists like Lazaradis and Balsillie. They fought against the centrifugal forces of Canadas high-technology sector and developed a world class company in this country. Make no mistake. In a time of short-term, shareholder driven management, keeping an emerging company in Canada is no small feat, particularly given the historic shortage of venture capital. National economies are built through a combination of capitalizing on natural and location advantages and the eclectic and unpredictable decisions of individual entrepreneurs. RIM is proudly and determinedly Canadian.

    RIMs current issues are far from unique. Other major firms IBM, Apple and Microsoft a few years ago, Yahoo! and MySpace more recently, Sony and Nokia right now experience similar challenges. Forgive me again for being old-fashioned. But I am rather impressed with the simple things about the company: a huge pile of cash, continued profitability, the steady release of new products, and an expanding global reach.

    Those in the Waterloo area should be grateful that RIM has given us all a front seat on the most remarkable techno-economic revolution in recent history. From Waterloo, we get to watch a global battle over mobile phones and related technologies, with one of our companies playing in the elite league.

    Canadians are a little self-conscious about celebrating success we are a little hard on high-profile people but we should be cheering on Research In Motion. There is much more at stake than RIMs share price. Canadas standing as an innovation nation is on the line.

    Ken Coates is professor of history at the University of Waterloo.

    TheRecord - A company with staying power
    Enri69 and deiop like this.
    08-06-11 07:45 AM
  2. quik4life's Avatar
    Best article on RIM I have ever read.

    Posted from my CrackBerry at wapforums.crackberry.com
    08-06-11 08:46 AM
  3. trsbbs's Avatar
    A local "be nice to the neighbor" article.

    08-06-11 09:22 AM
  4. Branta's Avatar
    Opinion, not really "news or rumor" and not product specific. Moving to Rehab to avoid diluting hard factual news with the new product launches pending.

    RIM is by no means the only high-tech high-flyer in Canada. It is certainly the best known with general public but there are a number of others with similar potential.
    08-06-11 12:00 PM
  5. missing_K-W's Avatar
    Wouldn't this Article have been better served in the "General Discussion" section...why was it demoted to the rehab section????????
    08-07-11 06:06 PM