Non-Strategic CEOs Weaken Businesses

Two articles this morning underscore my very strongly held belief that strategy is the most powerful management tool there is. The justaposition of these two articles infers that non-strategic CEOs weaken or even destroy their businesses.

The first article is from HBR, “Strategic Insight is Not on the CEO Radar“. It tells us that for most of a number of recently surveyed CEOs, “…creating the ability to generate strategic insight…was not considered to be a top ten priority.” Wow.

The second article is from today’s Globe and Mail, “RIM’s Marketing Challenge: Revive the ‘Crackberry’ Addiction“. In it, the newly-hired CEO, Mr. Thorsten Heins, says that one of his key priorities is to hire a new chief marketing officer (CMO) and “focus more on consumer marketing.”

This will merely lipstick the pig and investors, who have been abandoning RIM stock for months, know it. The new CEO’s insistence on staying the strategy course has caused investors to leave even faster.

Mr. Heins must understand that the current strategy has caused RIM’s slide and won’t reverse it. He should immediately muster the courage to thoroughly re-think RIM’s business strategy. This new strategy, by definition, must be sharply different from Apple’s or anybody else’s. Without a new strategy, hiring a new CMO to pursue consumers is simply riding out to battle stronger foes on their turf. You might win, but it’s not very likely.

What about you? Is strategy among your top ten priorities?

This Post Has 5 Comments

  1. Adam Quigley

    Mr. G! Glad to see the StratPad achieving such great milestones at an unbelievable rate, congrats!

    As per RIM and their gloomy outlook-

    There is something to be said for a CEO to have the strength needed to stay the course and not succumb to the pressures of investors/analysts and uneducated consumers throwing tantrums- RIM has not delivered the entire strategy- granted they have made mistakes with execution and having a stronger connection to their segmented market, but they are still developing and executing a strategy that is poised to give them the sort of differentiation they need to sustain multiple profitable years to come-

    After the strategy they are currently pursuing is 100% complete then the stage is set to re-evaluate the implemented tactics and make the strategic decision to stay the course or choose from one of the thousands of ideas from the “street”. I have been lacking confidence with RIM for many months, I am now starting to turn a page with the company and have more faith in their ability to turn the company around- maybe not to the record breaking stock price days… Buy low, sell high!

    Any thoughts?

    1. aglassey

      Hi Adam,

      Nice to see you pop up on my radar – all’s well with you?

      Staying the course is fine and we don’t expect miracles on the second day of the job. However, Heins is essentially an appointee of the former CEOs, he’s an operations guy, and in his first comments he said that the current strategy is fine. Not good.

      BTW, just what is RIM’s strategy? Who are their customers? What is their unique value proposition? What, in your opinion, do they need to complete in order for their strategy to be fully birthed so that they can start to gain traction?

      I reaffirm my belief that RIM has lost their strategic way. The absence of a well-thought out strategy is causing them to make whip-saw decisions that confuses the market, devalues their brand, and speeds the erosion of their customers and market share.

      They’ve got one chance to get it right or Heins will simply oversee RIM’s acqusition by Google or Microsoft.

      Like you, I’m a believer in buy-low/sell-high but don’t buy RIM quite yet. That stock’s going to fall a bit more…

      Alex

      1. Adam Quigley

        All is well… well enough 😉

        “BTW, just what is RIM’s strategy? Who are their customers? What is their unique value proposition? What, in your opinion, do they need to complete in order for their strategy to be fully birthed so that they can start to gain traction?”

        1. Current strategy= deliver QNX (BB7)
        2. Enterprise clients are Target Market- I do not believe a successful RIM competes with Apple on any level
        3. Value Prop- unmatched security (Enterprise level) & efficiency in business dealings
        4. I think they need to define, deliver and re-deliver a new operating system that will have the power to WOW clients like a peice of hardware used to be able to do.

        ***I didn’t say buy at the bottom and sell at the top!!!!!!! The stock price could continue to drop further, but as you mentioned, in worse case scenerio RIM is bought out by a large player forcing a premium bid on the stock leading to an increase in the capital gain potential… I know they arn’t paying you to wait (like Encana, a company I follow closley as well), but do you not agree that the company is oversold?

        I appreciate the insights Alex

  2. aglassey

    Hi Adam,

    Delivering QNX isn’t their strategy – that’s a technical project that is required to support their strategy.

    Based on your comments (points 2 and 3), their strategy might be something like this:

    By December 31, 2013, RIM will become the dominant global supplier of enterprise-level voice & message products and related services by providing real-time delivery on the world’s most secure platform.

    Note that this strategy probably doesn’t need a Chief Marketing Officer to target consumer customers. It’s that kind of signal that distresses me, confuses the market, and drives the share price down.

    With regard to how low will their share price go… I don’t know. I haven’t done the analysis but it seems risky at this point when the bottom is so murky to buy on the hope of a quick 10-20% gain if somebody makes an offer.

    As Sarge on Hill Street Blues used to say, “Be careful out there.”

    Thanks for the chat,

    Alex

    1. Adam Quigley

      Maybe I should be studying “StratPad” in more detail!!! All the best Alex, I will be travelling to the island Sept 2012 and hope to see you.

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