Research In Motion (RIM) executives faced a tough situation as they came face to face with its shareholders at an annual meeting on 10 July 2012 going through a rough phase, RIM was recently in news for delaying the release of its much awaited new smart phone and for laying off 5,000 of its workers.
RIM has been in a tough situation over the past few years and the only way it could strengthen its situation was by bringing forward its new smart phone Blackberry 10, a phone with new design of RIM’s BlackBerry operating system. Over the last year, the company has postponed its release a number of times which has raised several questions.
However, RIM’s chief executive Thornsten Heins justified this delay by saying, “I could actually have kept the schedule, if I had made a sacrifice on quality and on platform stability. And I decided not to do that, because I need to make sure that when we deliver a BlackBerry, it is best quality.”
This delay not only affected the company’s reputation but also made an impact on the stock market, which dropped 14% after the announcement. Shares opened at $7.82 on 10 July 2012 but were down to $7.34 by the time the meeting concluded about 11:30 a.m, Eastern.
Not only this, Heins also had to face tough attitude from shareholders who are not happy with the company’s performance. Heins started the meeting on a positive note, stating that the company’s enterprise and consumer businesses will move “closer and closer”. However, he also made it clear that the next several quarters will be challenging. RIM plans to license its operating system to competitors as it works to build out its subscriber base.
Despite all this Heins and former CEO and co-founder Mike Lazaridis had to face strong criticism from the shareholders. Heins had to face some hard questions like – whether he truly had the leadership chops to run the company and if he could justify his compensation package.
One of the other shareholders pointed out that Heins had no previous experience of being a chief executive of a company of RIM’s size. Heins replied that he has led “several billion-dollar divisions” within Siemens.
The meeting saw many such questions and answers exchanged among the board members. Despite all criticism Heins and other executives are passionate about launching their next operating system and the direction of BlackBerry 10.