RIM’s Response to 'Open Letter'

http://blogs.blackberry.com/2011/06/rims-response-to-open-letter/

by jsm386 • 15 years ago

121 105 15 years ago

blogs.blackberry.com

hvs3• 15 years ago

RIM has $3 Billion in cash? I guess I'm not that surprised, but that's quite a bit of "help us get back on our feet money." With some clear direction (which they may or may not get from their current executives) they could definitely regain some of their previous market.

The more competition the better, and having another player in the mobile space can only improve things for the consumer (and the enterprise).

sc68cal3• 15 years ago

I wonder though, if the fact that they have so much money (and thus so much to lose) is part of the reason why RIM has lost their direction? Surely that has to have some sort of cultural impact?

hvs3• 15 years ago

Could be. Microsoft seems to have suffered a similar fate. My original point was that with a company that is that fiscally responsible, it is much less likely for it to go belly up than to flounder for a bit and then refocus and find its market.

TomOfTTB• 15 years ago

It really isn't that much. Look at it this way...

The way a corporate balance sheet works you don't spend money manufacturing your product. What you do is convert the asset from money to a physical product you can sell. But that asset is still on your books as being worth whatever you paid to manufacture it.

RIM claims to have "shipped" 13.2 Million smartphones in the last quarter (as opposed to "sold"). Assume their phones cost about as much as Apple's iPhone (Via iSuppli: $187 to build) and you have $2.46 billion worth of assets in the channel. And that's only smartphones. It doesn't count the playbook.

Keep in mind carriers can return shipped phones. So really RIM's $3 billion only serves to put them at even every quarter

So in the grand scheme of things it isn't that much.

hvs3• 15 years ago

I understand that part of accounting, but I didn't think that it was listed as "cash" on the balance sheet.

dirtyaura2• 15 years ago

Interesting. Are you saying that this inventory can still be listed under Cash & Equivalents (1,986M on 28/5/2011) on balance sheet? Or is it under Accounts Receivable (3,772M)? Does Total inventory (943M) then has phones that are not yet shipped?

(Values are from latest Balance Sheet data http://www.google.com/finance?q=NASDAQ:RIMM&fstype=ii )

I've recently started to learn to read financials more carefully, but all these nuances of corporate accounting can make it a fruitless effort.

ScottBurson2• 15 years ago

You're assuming that the channel holds a full 90 days worth of inventory. I don't know much about these things, but in these days of just-in-time manufacturing, that seems implausible to me. How do you know it's not 30 days, or 15?

seb• 15 years ago

I don't understand why they think they need to respond at all. And then they are not even responding to all the points. They just repeat their mantra that they knew what they are doing at it will all be good soon.

orenmazor3• 15 years ago

seriously. they were better off remaining silent. all they've done with this rash response is sound even more like they have no idea what they're doing.

skroth2• 15 years ago

It didn't sound like that to me. Could you elaborate on how it is rash?

hnsmurf• 15 years ago

Because the people who run publicly traded companies have their compensation heavily tied to the short term share price of their organizations. Every mobile industry analyst is most definitely reading BGR.

yuhong2• 15 years ago

Don't know about RIM, but yea I know, which is of course flawed for many reasons.

orenmazor3• 15 years ago

I get the feeling the entire first paragraph is a bit of an attack on the author of the original letter, rather than addressing the problems.

chollida1• 15 years ago

Really? I thought they made it very clear that they were taking a jab at the author, or presumed author, since it's not at all clear that the letter is from a real "high level" RIM employee.

orenmazor3• 15 years ago

thats exactly what they're doing. they wrote a short and contentless response, and they spent 50% of it pondering if the original letter was real. whether it's real or not isn't as important as the fact it's raising some serious issues.

mikemaccana• 15 years ago

Wow. That was underwhelming.

Skroob2• 15 years ago

The only positive way to respond to a letter like that is to go out and do it. A press release reiterating the same old lines isn't going to solve anything; addressing concerns internally and releasing real products should be their response.

SeoxyS2• 15 years ago

A much better response would have been:

Re: Open Letter

Thank you very much for taking the time to express your opinion. We want to let you know we're listening and very much appreciate feedback.

Hang in there.

- Mike & Jim

panacea• 15 years ago

____

Sent from my jetpack

jodrellblank• 15 years ago

How would that be better? If they aren't listening, that would be a lie.

And from the open letter saying "RIM has a culture where nobody can speak out without fear of career limiting punishment" their reply is "I can't believe any real employee wouldn't raise these issues internally", does that sound like they even thought about the letter for five minutes?

A better (more honest) reply would be "we don't think there's a problem, Apple is just luck and hype, the playbook is industry changing (Mike said that, didn't he?), this better not have come from inside or else".

IMO.

kin2• 15 years ago

This response is meaningless. Any public company will say the same jargon to reassure their shareholders but I will put money down that internally RIM executives are dwelling on the letter and taking action.

swombat• 15 years ago

I will put money down that internally RIM executives are dwelling on the letter and taking action

Really? Are you buying some RIM shares then?

esrauch• 15 years ago

Even if he thinks the company is going to end up doing better in the long term, that doesn't necessarily mean he should purchase the stock. He could think they are going to be making moves with only minor announcements and the stock will fall despite the company actually doing something that will fix their downward trajectory. Stock purchases are more closely tied to what the public perception of their trajectory is, or even higher order (eg what will individuals on average predict what the public will think the company worth is).

wtracy• 15 years ago

That probably depends on whether "taking action" means "actually addressing the issues" or "shoring up the stock price up long enough for the board of directors to cash out".

kin2• 15 years ago

By putting money down I just meant 'confidence' in my point. And my point wasn't that the company is going to do well but that they now have the awareness that they are currently going about things incorrectly.

VladRussian• 15 years ago

> and taking action.

i think right now they are in the meeting discussing action plan to put together plan of actions.

ericboggs• 15 years ago

$3B in cash = RIM will acquire its way back into the game...or into a new game.

shareme• 15 years ago

supposedly that why QNX was acquired..and yet the fruit of the mew full QNX OS still not launched in a real touch smartphone..oh wait they want to switch to WP7..

dfranke• 15 years ago

Take that number and compare it to the numbers you see on their statement of operations. That $3B doesn't keep the lights on for very long if demand for their product evaporates.

timjahn2• 15 years ago

Gotta love how there's no author of the blog post. Just signed "Research In Motion". And "Filed in: News."

And they didn't like how the author of that letter was anonymous? Seems to be company policy. No faces.

sc68cal3• 15 years ago

More importantly, no emotion. The letter to RIM used personal pronouns and conveyed a sense of exasperation or frustration, while the response by RIM is incredibly dry and distant.

pagekalisedown• 15 years ago

Guess which one was reviewed by a legal and a PR department? :)

timjahn2• 15 years ago

Great point. I sometimes think that CEOs of typical large corporations like RIM are a totally different species.

orky56• 15 years ago

There is a fundamental business reality however that following an extended period of hyper growth (during which RIM nearly quadrupled in size over the past 5 years alone), it has become necessary for the company to streamline its operations in order to allow it to grow its business profitably while pursuing newer strategic opportunities.

So basically they're saying they're taking a break from innovating and will spend a little while just cleaning up shop. Do they not realize they can't just rest on their laurels while the rest of the industry leaves them behind? Take a look at Nokia!

silvestrov• 15 years ago

Didn't Google grow a lot more than 400% over 5 years? I can't really see this as a proper excuse.

kragen• 15 years ago

I didn't read that as "we're taking a break from innovating". I read it as "we're about to do massive layoffs because we're gonna abandon our most successful products and bet the company on something unproven". But I don't know anything about what's going on with RIM.

staktrace• 15 years ago

Think of it as a company refactoring to remove cruft and deal with accrued managerial debt.

sriramk2• 15 years ago

I love RIM - they're the gift that doesn't stop giving for my new Tumblr <plug>http://corporatebs.tumblr.com/</plug>; :)

ptbello2• 15 years ago

Brilliant site. Please, allow users to post comments and "translations" for each post!

sriramk2• 15 years ago

Done. Not terribly sure why I'm getting downvoted here. But atleast one other person likes it :)

bradleyland2• 15 years ago

I'm print this out in large type on 11x17 paper, framing it, and hanging it in our office hallway with the caption: "Never sound like this."

initself• 15 years ago

I'd like to know why. Sounded cogent to me.

whakojacko• 15 years ago

Sounded like standard bland pr-speak to me. They didn't specifically address any of his points and it comes off as extremely impersonal. I hope for RIM's sake they are sending around a much more detailed memo internally. For instance, the second sentence:

"It is obviously difficult to address anonymous commentary and it is particularly difficult to believe that a 'high level employee' in good standing with the company would choose to anonymously publish a letter on the web rather than engage their fellow executives in a constructive manner"

seems to just strengthen the original author's point 8

bradleyland2• 15 years ago

Specifically, the portion where they rebut significant attacks on the internal character of the company by pointing out that their bottom line is great. Is that's all they're about? The bottom line?

The entire thing reads like PR-speak. Why even bother with such a non-response.

mikecane2• 15 years ago

This sounds an awfully lot like Nokia's reaction to the iPhone. And see where they went.

kamechan• 15 years ago

proves the original author's point wonderfully, doesn't it?

Toddward• 15 years ago

The original letter emphasized that RIM is too corporate and that that's stifling innovation and progress at the company. So what does RIM do? Fire off a press release that extols the virtues of and attempts to justify that bureaucracy.

/Facepalm

shawndumas2• 15 years ago

Why is it "obviously difficult to address anonymous commentary"?

saucetenuto• 15 years ago

If you're in the habit of addressing the message instead of the messenger, it's not.

If your instinctive response to criticism is to try to figure out why the speaker is making it, rather than to try to figure out whether it's accurate, anonymous critique is very hard to handle.

ehutch79• 15 years ago

because you can't fire someone if you don't know who they are.

ptbello2• 15 years ago

Well, if it hadn't been anonymous, it would have been easier to fire the guy.

Shenglong2• 15 years ago

What this teaches us, is that Bush's "we don't negotiate with terrorists" is a valuable idea. Every company should have a bi-law which states it will not respond to public letters. This letter, even though it got the point across, is heavily damaging to the brand.

9999• 15 years ago

How do you think this response damages their brand exactly?

Shenglong2• 15 years ago

It's not that the response damages their brand. It's that the letter damages their brand, and their response only cues more people into it. It's a lose-lose situation for them once the letter is sent out - unless they had something witty planned and responded with a semi-troll comment such as "like this? present new product"

shawndumas2• 15 years ago

Still no mention of iMessage...

canistr• 15 years ago

Unless Apple intends to release low-end iPhones with equivalent iMessage only data-plans, iMessage isn't a true competitor to BBM.

r00fus• 15 years ago

iMessage will exist on iPod Touch and iPads.

It's not going to directly compete vs. RIM's strength, but it's still a big threat... once iMessage exists, the sword of damacles is over RIM's head.

blinkingled3• 15 years ago

More suspicion (is the letter real?) and blame (sane person would never do this) followed by more passive aggressive denial (we are aware of a tangential situation and are addressing it - to hell with your comments, letter boy). Then boasting - 3B in cash, we are doing just great!

How many times the above strategy has worked for someone in as precarious position as RIM?

pyre• 15 years ago

  > Then boasting - 3B in cash, we are doing just great!

That seems worse than it is when you take it out of context.

In context:

  > The company is thankfully in a solid business and financial position
  > to tackle the opportunities ahead with a solid balance sheet (nearly
  > $3 billion in cash and no debt), strong profitability (RIM’s net
  > income last quarter was $695 million) and substantial international
  > growth (international revenue in Q1 grew 67% over the same quarter
  > last year).

My Translation:

  > We're still profitable with a large cash cushion and no debt, so
  > we're still in a good position to attempt to pivot our business in a
  > bid for survival. Don't write us off just yet.

blinkingled3• 15 years ago

My point was that past success and cash at hand does not guarantee future success and RIM did nothing to allay the concerns around their repeatedly failing strategy.

So the assurance that we have money and we can try things out is not really in the spirit of the open letter - it is not worthwhile to point out cash at hand in this context.

redsymbol• 15 years ago

I'm thinking about the response I'd choose if I were in one of the CEO seats at RIM, and I'm not sure I could have improved on this response. As noted, it's kind of content free and does not acknowledge any responsibility. But RIM had to make SOME short-term press release response that communicates the company strengths. No response would carry risk of a strong negative press and social media response.

At the same time, I'm not sure they could have clearly addressed any of the specific criticisms in the open letter, for fear of prematurely revealing company strategies and plans. (And don't give me a line about how companies need to be more open; every company with any competition has to be ever vigilant about that, for competitive and other reasons.) Note also that they didn't claim any of the specific criticisms were invalid.

(Well, actually maybe they could have toned down the FUD on the source in the first paragraph a bit. But I think they had to include some of it, frankly; unless/until a RIM exec publicly claims responsibility, none of us know for sure it's from who it claims it is.)

mikecane2• 15 years ago

Ed Colligan of Palm responded with more substance to Engadget during the Foleo debacle. That was one product. That RIM employee letter addresses systemic issues at a company about to slide into a Nokian abyss and in response they put out that? [typo edit]

Hari_Seldon• 15 years ago

"a Nokian abyss"

I like this, think I'll use it

schmittz2• 15 years ago

I completely disagree. A company can be frank and honest without revealing anything. Of course they needed to release a press statement in immediate response. The press release could have been written much better as to not sound so nonchalant about the whole situation. For instance, they could have acknowledged the shortcomings of their current product and announced that their current roadmap's focus was on developing innovative, superior products. They could have also said that in light of the letter, they were beginning a new internal dialogue to allow employees to address problems in the company subsequently increasing profit, productivity, and potential.

goalieca• 15 years ago

it's hard to be frank and honest without having investor confidence and stock prices drop. That's truly who the audience of the letter was.

Angostura• 15 years ago

I think the obvious tactic, would be to say "The open letter identifies issues that we too have identified and take very seriously at RIM, our current restructuring is specifically designed to address them and other issues that we believe will propel into a new era of growth. In terms of user experience we are doing X. We are strengthening our software management by doing Y."

You take the criticism, acknowledge it and parlay it into a skillful advertisement for your forthcoming strengths.

If you;re really smart you circulate the open letter yourself anonymously in the first place.

It would appear that the people in RIM's PR department are not really smart.

Helianthus2• 15 years ago

The funny thing is, it's only on circles like these at HN that it seems the corporation should "take the criticism."

As far as investors/Wall Street/the wider public goes, the non-answer might actually be the better response. Appearing to take the criticism seriously could be more damaging--hopefully internally, they are indeed taking the criticism seriously.

RyanMcGreal• 15 years ago

TLDR: We're doing great, and things are only going to get better.

SeoxyS2• 15 years ago

Disappointing to see RIM be so dismissive of a heartfelt and honest open letter by someone who (high level RIM employee or not) obviously cares a lot about RIM and took substancial amount of time to express his thoughts.

dforeman• 15 years ago

My guess how a fail like this happens- Executive team has an investor relations (PR) firm on retainer. IR firm sees "Open Letter" as a PR crisis, pulls page from crisis management playbook and opts to respond immediately. Responds in investor-speak. Flops with audience who elevated the letter to a PR crisis in the first place- the internet/consumer. Social media fail.

stevenj• 15 years ago

I know it's simplistic, but RIM just needs to make and ship good products.

wesleyd• 15 years ago

RIM ... didn't they used to make pagers or something?

sixtofour• 15 years ago

Given that the purpose of the first paragraph (and almost half the post) was to passive-aggressively attack the letter writer, it's no surprise that the writer did not engage management directly.

The second paragraph basically said "all is well!"

Ah. Well.

fab1an• 15 years ago

RIM prefers to merely adress their shareholders on this issue, while the smart move would have been to include some lingo addressing their customers and the valid concerns raised in the 'open letter'. This won't work in the long run.

namank• 15 years ago

RIM's action to the open Letter: http://www.bgr.com/2011/06/30/rim-agrees-to-consider-splitti...

RIM and NEI Investments Announce Withdrawal of Shareholder Proposal; RIM Committee to Review Matter Raised by Proposal

Waterloo, ON -

Research In Motion Limited (“RIM”) (Nasdaq: RIMM; TSX: RIM) and Northwest & Ethical Investments L.P. (“NEI Investments”) announced today that, following discussions between them, NEI Investments has decided to withdraw its proposal that was to be considered at the RIM Annual General Meeting. The proposal asked that RIM’s Board of Directors adopt a policy that divides the role of Chair and CEO, and that RIM have an independent Chair. The parties have agreed that RIM’s Board will establish a Committee of independent directors whose mandate will generally be to (i) study the appropriate balance between an independent lead director or chair with full and exclusive authority customarily held by such an office holder, (ii) determine the business necessity for RIM’s Co-CEOS to have significant Board level titles to assist their selling and other responsibilities with certain large customers in overseas markets, and (iii) propose and provide a rationale for a recommended governance structure for RIM, which will include clarifications of the Co-CEOs and Chair roles, as well as the Board’s mandate. The Committee will consult with NEI Investments in developing the specific terms of reference for this mandate and before it issues its report by January 31, 2012. The Board will publicly respond to the recommendations of the Committee within 30 days.

As a result, the proposal will no longer be presented at the Annual General Meeting and no vote will be taken on the proposal at the meeting. RIM and NEI Investments are pleased to have reached an agreement on this matter, and these important issues of corporate governance will receive further consideration at the RIM Board level

yellowredblack• 15 years ago

The complaint:

but unfortunately the culture at RIM does not allow us to speak openly without having to worry about the career-limiting effects

The response:

it is particularly difficult to believe that a “high level employee” in good standing with the company would choose to anonymously publish a letter on the web rather than engage their fellow executives in a constructive manner

ellyagg• 15 years ago

Since the merits to making anonymous public arguments are so obvious, that line is one in particular that stands out as defensive. It also confirms one of the points made in the original letter, that people are afraid to speak out. Is there any doubt that the author of the above quotation is someone to be feared?

For a good example of a case where public anonymous argument had far more persuasive power than "engaging fellow executives in a constructive[sic] manner" look at the Federalist Papers, which had a profound effect on the ultimate ratification and subsequent interpretation of the US Constitution.

yuhong2• 15 years ago

As I said before, the best thing to do would be to allow non-anonymous public arguments, but...

etherael• 15 years ago

Sinking? what do you mean sinking, ensign? Get back to polishing those railings and rearranging those deckchairs.

scorpion032• 15 years ago

How can the author's name be "Research In Motion". Why isn't this post signed by anyone? This is just as anonymous, for what it is worth.

siculars• 15 years ago

There is way too much PR speak going on here.

RIM = Yahoo!

RIM’s Response to 'Open Letter'

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