Thursday, June 30, 2011

Senior RIM Manager pulls an Elop

Two summers ago I advised a friend of mine to dump all his RIM stock, that's how obvious it was even two years ago that RIM was not responding properly to the market. Inexplicably, RIM is still not responding properly to the market.

In February of this year, ex Microsoft VP Stephen Elop took over the reigns at Nokia and famously sent this email out to employees. Many have opposed Elop's strategy of dumping Symbian for WP7 but ultimately he made the right decision, Nokia will likely continue to lose market share for two years but it will re-emerge a much stronger player. You'll notice I mentioned in that post on Nokia that this is the kind of urgency that RIM and Palm need, Palm has been a bit of a black box lately but an open letter to RIM's co-executives was recently published by the Boy Genius Report. Unfortunately for RIM, this letter does not come from the top dog but rather is addressed to RIM's two top dogs. I sincerely hope they listen as currently RIM is inexcusably running uncompetitive software on uncompetitive hardware. The smartphone market is possibly the hottest and most fiercely contested market on the planet right now and RIM is in the process of autopiloting themselves into bankruptcy. Here's a copy of the letter:

To the RIM Senior Management Team:
I have lost confidence.
While I hide it at work, my passion has been sapped. I know I am not alone — the sentiment is widespread and it includes people within your own teams.
Mike and Jim, please take the time to really absorb and digest the content of this letter because it reflects the feeling across a huge percentage of your employee base. You have many smart employees, many that have great ideas for the future, but unfortunately the culture at RIM does not allow us to speak openly without having to worry about the career-limiting effects.
Before I get into the meat of the matter, I will say I am not part of a large group of bitter employees wishing to embarrass us. Rather, I believe these points need to be heard and I desperately want RIM to regain its position as a successful industry leader. Our carriers, distributors, alliance partners, enterprise customers, and our loyal end users all want the same thing… for BlackBerry to once again be leading the pack.
We are in the middle of major “transition” and things have never been more chaotic. Almost every project is falling further and further behind schedule at a time when we absolutely must deliver great, solid products on time. We urge you to make bold decisions about our organisational structure, about our culture and most importantly our products.
While we anxiously wait to see the details of the streamlining plan, here are some suggestions:
1) Focus on the End User experience
Let’s obsess about what is best for the end user. We often make product decisions based on strategic alignment, partner requests or even legal advice — the end user doesn’t care. We simply have to admit that Apple is nailing this and it is one of the reasons they have people lining up overnight at stores around the world, and products sold out for months. These people aren’t hypnotized zombies, they simply love beautifully designed products that are user centric and work how they are supposed to work. Android has a major weakness — it will always lack the simplicity and elegance that comes with end-to-end device software, middleware and hardware control. We really have a great opportunity to build something new and “uniquely BlackBerry” with the QNX platform.
Let’s start an internal innovation revival with teams focused on what users will love instead of chasing “feature parity” and feature differentiation for no good reason (Adobe Flash being a major example). When was the last time we pushed out a significant new experience or feature that wasn’t already on other platforms?
Rather than constantly mocking iPhone and Android, we should encourage key decision makers across the board to use these products as their primary device for a week or so at a time — yes, on Exchange! This way we can understand why our users are switching and get inspiration as to how we can build our next-gen products even better! It’s incomprehensible that our top software engineers and executives aren’t using or deeply familiar with our competitor’s products.
2) Recruit Senior SW Leaders & enable decision-making
I’m going to say what everyone is thinking… We need some heavy hitters at RIM when it comes to software management. Teams still aren’t talking together properly, no one is making or can make critical decisions, all the while everyone is working crazy hours and still far behind. We are demotivated. Just look at who our major competitors are: Apple, Google & Microsoft. These are three of the biggest and most talented software companies on the planet. Then take a look at our software leadership teams in terms of what they have delivered and their past experience prior to RIM… It says everything.
3) Cut projects to the bone.
There is a serious need to consolidate our focus to just a handful of projects. Period.
We need to be disciplined here. We can’t afford any more initiatives based on carrier requests to squeeze out slightly more volume. Again, back to point #1, focus on the end users. They are the ones making both consumer & enterprise purchase decisions.
Strategy is often in the things you decide not to do.
On that note, we simply must stop shipping incomplete products that aren’t ready for the end user. It is hurting our brand tremendously. It takes guts to not allow a product to launch that may be 90% ready with a quarter end in sight, but it will pay off in the long term.
Look at Apple in 1997 for tips here. I really want you to watch this video because it has never been more relevant. It is our friend Steve Jobs in 97 and it may as well be you speaking to RIM employees and partners today.
4) Developers, not Carriers can now make or break us
We urgently need to invest like we never have before in becoming developer friendly. The return will be worth every cent. There is no polite way to say this, but it’s true — BlackBerry smartphone apps suck. Even PlayBook, with all its glorious power, looks like a Fisher Price toy with its Adobe AIR/Flash apps.
Developing for BlackBerry is painful, and despite what you’ve been told, things haven’t really changed that much since Jamie Murai’s letter. Our SDK / development platform is like a rundown 1990′s Ford Explorer. Then there’s Apple, which has a shiny new BMW M3… just such a pleasure to drive. Developers want and need quality tools.
If we create great tools, we will see great work. Offer shit tools and we shouldn’t be surprised when we see shit apps.
The truth is, no one in RIM dares to tell management how bad our tools still are. Even our closest dev partners do their best to say it politely, but they will never bite the hand that feeds them. The solution? Recruit serious talent, buy SDK/API specialist companies, throw a truckload of money at it… Let’s do whatever it takes, and quickly!
5) Need for serious marketing punch to create end user desire
25 million iPad users don’t care that it doesn’t have Flash or true multitasking, so why make that a focus in our campaigns? I’ll answer that for you: it’s because that’s all that differentiates our products and its lazy marketing. I’ve never seen someone buy product B because it has something product A doesn’t have. People buy product B because they want and lust after product B.
Also an important note regarding our marketing: a product’s technical superiority does not equal desire, and therefore sales… How many Linux laptops are getting sold? How did Betamax go? My mother wants an iPad and iPhone because it is simple and appeals to her. Powerful multitasking doesn’t.
BlackBerry Messenger has been our standout, yet we wasted our marketing on strange stories from a barber shop to a horse wrangler. I promise you, this did nothing to help us in the mind of the average consumer.
We need an inventive and engaging campaign that focuses on what we are about. People buy into a brand / product not just because of features, but because of what it stands for and what it delivers to them. People don’t buy “what you do,” people buy “why you do it.” Take 3 minutes to watch the this video starting from the 2min mark:
6) No Accountability – Canadians are too nice
RIM has a lot of people who underperform but still stay in their roles. No one is accountable. Where is the guy responsible for the 9530 software? Still with us, still running some important software initiative. We will never achieve excellence with this culture. Just because someone may have been a loyal RIM employee for 7 years, it doesn’t mean they are the best Manager / Director / VP for that role. It’s time to change the culture to deliver or move on and get out. We have far too many people in critical roles that fit this description. I can hear the cheers of my fellow employees now.
7) The press and analysts are pissing you off. Don’t snap. Now is the time for humility with a dash of paranoia.
The public’s questions about dual-CEOs are warranted. The partnership is not broken, but on the ground level, it is not efficient. Maybe we need our Eric Schmidt reign period.
Yes, four years ago we beat Microsoft when everyone said Windows Mobile with Direct Push in Exchange would kill us. It didn’t… in fact we grew stronger.
However, overconfidence clouds good decision-making. We missed not boldly reacting to the threat of iPhone when we saw it in January over four years ago. We laughed and said they are trying to put a computer on a phone, that it won’t work. We should have made the QNX-like transition then. We are now 3-4 years too late. That is the painful truth… it was a major strategic oversight and we know who is responsible.
Jim, in referring to our current transition recently said: “No other technology company other than Apple has successfully transitioned their platform. It’s almost never done, and it’s way harder than you realize. This transition is where tech companies go to die.”
To avoid this death, perhaps it is time to seriously consider a new, fresh thinking, experienced CEO. There is no shame in no longer being a CEO. Mike, you could focus on innovation. Jim, you could focus on our carriers/customers… They are our lifeblood.
8) Democratise. Engage and interact with your employees — please!
Reach out to all employees asking them on how we can make RIM better. Encourage input from ground-level teams—without repercussions—to seek out honest feedback and really absorb it.
Lastly, we’re all reading the news and many are extremely nervous, especially when we see people get fired. We need an injection of confidence: share your strategy and ask us for support. The headhunters have already started circling and we are at risk of losing our best people.
Now would be a great time to internally re-brand and re-energize the workplace. For example, rename the company to just “BlackBerry” to signify our new focus on one QNX product line. We should also address issues surrounding making RIM an enjoyable workplace. Some of our offices feel like Soviet-era government workplaces.
The timing is perfect to seriously evaluate at our position and make these major changes. We can do it!
A RIM Employee

Saturday, June 11, 2011

Note on Healthcare Systems

A friend of mine asked me (and others) to help him form an opinion on healthcare systems via a facebook note, here's a copy and paste of my reply minus some typos and awkward sentences and grey text when the content is too personalized, I wrote on this subject previously here.

Right now western civilization is at or very near an all-time pinnacle in terms of societal productivity. Which means that people in general get more stuff for working less than ever before. How did we achieve this success? the answer I think ultimately traces back to the arrival of Christ but since many dispute that I'll start further down the causation chain at a place that virtually no-one disputes. Our empirical success is born out of capitalism. 

Capitalism takes many of the strongest forces that are innate to man (pride, greed, envy) and harnesses them to achieve something good. Now in order for capitalism to work as well as it is working today we need some special sauce, we need trustworthiness (the culture that made trustworthiness such a prized attribute is, I think, clearly traceable to Jesus, which is why I ultimately credit him for the west's success, the Chinese apparently do as well). If we do not have trustworthiness, then no one can know what the better product is and so there is no incentive to make the best product. All this to say that capitalism, as a system, trends ever upward; so long as the default nature of man remains static and trustworthiness stays above some unmeasurable (by me) threshold. This is why right now there is less poverty per capita than there has ever been before (in "the west" anyway). 

Socialized anything has very different attributes. The defining characteristic of socialized anything is that *everyone* who needs it gets it regardless of what they do. What this means is that there is no incentive for the recipient to look for the best because everyone gets the same. Because the recipient has no incentive to look for the best, the provider has no (or less) incentive to provide the best. Because there is no incentive to look for the best and no or little incentive to provide the best, socialism as a system should trend relatively flat. However that is not the whole story, because even in a socialized system there are those people who control the resources and these people will naturally abuse their power... power corrupts... (now it is possible for someone in power to have such great character that they are largely not corrupted such as Singapore's Lee Kuan Yew but that is the exception not the rule and it only takes one corrupt and powerful leader to destroy a country). Because of this, systems of socialization in general often trend downward. This is why the US beat the USSR with economics despite the latter providing incentive for their citizens through (and I quote) "protracted violence." 

In general, pure capitalism beats pure socialism hands down every time. In practice however systems are almost never "pure capitalism" or "pure socialism" (which I would say is also called communism, communism often being called a form of socialism though many would argue with that. There is no agreed-on definition of the two terms that I am aware of). For instance Deng Xiaoping injected capitalism into communist China which accounts for their economic ascension since then and capitalist Canada has a number of socialist programs.

Now applying this specifically to healthcare in america... Healthcare is a special industry in the context of capitalism because the demand for healthcare is inelastic, meaning demand does not change with price. Elasticity is usually one of two main factors which drive down prices under capitalism, the other factor being competition. Our geniuses in Washington however have inadvertently delegated de facto control of competition to insurance companies which have all but eliminated it. But that is the current state of healthcare and I feel like you're more interested in the moral implications of theoretically going full capitalism or full socialism. 

If we go full socialism, keep in mind that the only reason we can do so is because of the abundance provided by the capitalist engine. Socializing healthcare (as opposed to making it full capitalist) effectively removes it from the capitalist engine and transforms it into a weight that the capitalist engine must support ( though in america it is arguable that healthcare is currently not supporting that engine). This is OK so long as you don't hang so many weights around the capitalist engine that it can't support them. In which case the system collapses and more poverty/death occurs than would have occurred had the society stayed with pure capitalism. We've recently seen examples of this in Portugal and Greece though not extreme examples because they were bailed out by the EU.

I think that the capitalist engine of most western countries is more than up to the task of supporting socialized medicine but the attitude of "let's give ourselves stuff for free because we can" that is often behind the socialization of industries is what scares me. It is an attitude that trends toward an unsustainable situation and is one that I am not sure can be reined in once it's taken hold of a society, the allure of giving yourself something for nothing is strong (see Greece etc.), though I think it might be possible to remedy with education. To summarize, my biggest problem with socializing healthcare (and anything else) is that the price of providing healthcare evenly to everyone is a less secure foundation for the future. The benefit of socialized healthcare is (obviously) that everyone has access to healthcare, an additional benefit in the case of america is that it should be possible to implement more responsible cost control. In addition to this, capitalism would still be driving the development of new drugs and machines because the companies that produce these are still competing normally so healthcare would still benefit indirectly from the fruits of capitalism.

The disadvantage of pure capitalism is that it would not insure that everyone has access to healthcare, though given that capitalism has already reduced poverty to record low levels there is no reason to think that this trend will not continue, in addition it will lead to a continued increase in discretionary income making it more likely that that individual citizens will step up to cover the health costs of the less fortunate, though admittedly this will never cover 100% of needs.

Personally I am not sure what system would be best, the US already has plenty of dead weight on its system and historically speaking it looks like once government grows to 35-40% of GDP the country starts exhibiting signs of serious instability (again see Portugal etc.), which is to say signs of a weak economic foundation. The US federal government spent about 21% of GDP last year but if you include state and local government spending that number is 40%. Is it moral to go full capitalism and maybe save future lives at the expense of what you know will probably be current lives? I don't know. I would be in favor of socializing healthcare for those who are mentally or physically handicapped and perhaps the very young, but when you subsidize it for the able you are subsidizing idleness, anytime you subsidize something, you get more of it. In addition to this, providing healthcare free for the able shifts responsibility from the individual to the government, taking away an individuals responsibilities leads to less responsible individuals and one thing that I am quite sure of is that the best insurance policy a country can have is the character of its citizens.

So all told, tough question. What's not tough is seeing that a country who's government is spending 17% of their GDP on healthcare (America) and does not have socialized healthcare is doing something wrong when a government that has better health statistics (New Zealand) and *does* have socialized healthcare is spending only 8% of their GDP on healthcare.

Anyway I have a challenge for YOU! Clint, Bob and Amy. I want Bob and Amy to read "Nanny State" and I want Clint to read "Money-Driven Medicine". In return I will read one book that each of you want me to read and since I'm feeling generous I will count Bob and Amy as two people instead of one.