At long last, there is good news for Blackberry fans! After quite a few anxious months, when the very fate of the organization appeared to be in question, RIM CEO Thorsten Heins, announced last week that “there’s nothing wrong with the company as it exists right now.” What a relief! After all, when you are down 95% in market valuation, you can sort of sense that at some point, if things get worse, questions regarding leadership's prowess will eventually be raised. Fortunately, that won’t be necessary, as Mr. Heins also reassured us that “This company is really in the middle of a transition. We know what we’re doing; we’re executing on our programs.” Whew! It could have been really close had management not responded in time with this announcement. Now we know that there’s no “death spiral” in RIM’s future, although the notion of “free fall” does come to mind. How did this happen? How could a great company, with a great brand, and a great product, be victimized so quickly? Were they ambushed? Did they never see it coming?
The answer, my friends, is that this was not sudden at all. In fact, RIM's slow slide into ignominy has been going on for a rather long-time, as did Kodak's and Nokia's, and the railroads, and fax machines, and the decline of physical mail, as well. The one thing that that all these now “disrupted” organizations had in common was the sloooooowness of how their declines played-out. All too often, disruption is not so much about surprise, as it is about slowprise!
What accounts for slowprise? To a very large extent, the chief culprit is success. Our past success, and a desire to enjoy the associated rewards to the full, lead many firms into denial and sluggishness in the face of needing to adjust to a potential disruptive offering from somewhere else; particularly if we don’t take that “somewhere else" very seriously. SONY's reluctance to move away from its once-great Trinitron technology, at a time when everybody else saw that the future was flat-panel TVs, is a case in point. Imagine how difficult it was for RIM to confront the reality of the smart phone challenge in the face of rising revenues and profits, which had been the case over the past several years – with revenues and profits actually peaking in 2011 -- until, suddenly it seems too late! But, the point is that RIM's demise was anything but "sudden." And, management missed it. As did, Kodak’s, and Nokia’s, and so many others.
Another culprit that makes slooowprise so deadly is leadership overconfidence, or hubris; the belief that we know what we're doing, despite everyone else starting to do something different, can be a killer. Isn’t that what RIM’s Mr. Heins said: “We know what we’re doing”? After all, we're "leaders," we must be good! We made it to the top, so we must know what we're doing to get to such positions! Yet, Disney's inability to take computer-animation seriously, at a time when Pixar was experimenting with what would become the industry's next big breakthrough, was likely the result of leadership overconfidence -- in a set of technologies that were fast fading from the scene. Similarly, RIM's inability to appreciate what was going on around it as smartphones emerged, is also an example of what has been referred to as "blinding confidence" in the company's C-suite. The "imperial" assumption by many Western entrants into the Chinese market that "only an experienced Western manager was suitable to run a Chinese operation" provides yet another aspect of how "managerial overconfidence" can derail even the best planned strategic alternatives.
The role of leadership confidence turns out to be a complex phenomena. My good friend and IMD colleague Phil Rosenzweig tells me that there is a very strong stream of thought in contemporary management literature revealing overconfidence as a pernicious threat to sound managerial strategic choice, despite its desirability in those instances where we need to inspire employees to take an organization beyond what even they think is possible in the pursuit of a new advantage. And, even in those situations where managerial confidence is a necessary prerequisite for big change initiatives, you need to ensure is that such confidence does not distort the ability of leadership to accurately read the strategic battlefield that the firm is competing on. RIM certainly needs confident leaders at this point in time, but do I really believe that they are looking soberly at the situation at present? Not from Mr. Heins’s recent comments! In fact, it appears to me that his view of the future is pocked-marked with “blindspots.”
An inability to take threats seriously, or to look far enough outside of the familiar in order to see emerging challenges, frequently leads to firms falling afoul of strategic "blind spots", which are essentially traps for the unwary. Estelle Metayer, a "blindspot spotter", who has worked with me in IMD programs aimed at reducing such myopia, has suggested that HP's appointment of Léo Apotheker, who lacked essential experience outside of software, set HP up for falling into just such blindspots when it came to hardware.
The bottom line of all of this, of course, is that disruption is a failure of leadership more than innovation. It is all-too-often neither rapid, nor unexpected, but slow and tortuous. We all watched in horror as Kodak died a death of thousand tiny cuts, and we all watched in mystification and could not imagine what was taking RIM, or Nokia, so long to wake-up? In every case, well-intentioned, experienced and well-meaning leaders let their organizations down. Perhaps, disruption is less about urgency and more about awareness -- the need to watch different communities and to try to look further-out into the future; less about responsiveness and more about pro-sponsiveness-- trying more to be the disrupter, or to try to imagine what a disrupter might be thinking, rather than being able to respond quickly, but after the event? If strategy is all about choice, then the way that the C-suite regards the future, and the transitory nature of any competitive advantage, may be one of the biggest choices of all.
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Bill Fischer is the co-author (with Andy Boynton & Bill Bole) of The Idea Hunter (Jossey-Bass, 2011).
Bill Fischer can be followed on Twitter at @bill_fischer
