The video is grainy, dark, and pixelated.
On stage, a man in his early forties wears a rumpled white sweatshirt with a black vest over top. He is addressing a audience of a several hundred people at the Park Plaza Castle auditorium, in Boston.
The man ambles to the side of the stage and pauses for a sip of water. He begins to talk about relationships. “Relationships that, uh, …that are destructive…” -he trails off. The crowd is uneasy. The man is contrite. He continues: “…don’t help anybody.”
The date of the video is August 6th, 1997. The man is Apple founder Steve Jobs. About five minutes later the image of another man’s face appears on a large video screen, dwarfing Jobs. It is, of course, Microsoft founder Bill Gates, who arrives by teleconference to a chorus of boos and announces that, after settling some differences, the companies will work together. Gates allows Jobs to save face by not laying plain what is actually happening; Microsoft is saving Apple from a near certain death with a $150-million investment.
Today, the late Steve Jobs isn’t just tech royalty, he has become a business legend. His perseverance , guile, and vision rescued the 1997 Apple, the Apple of the Newton, the Performa, the gaming console-slash PC, Pippen, and the $7,500 Twentieth Anniversary Macintosh, and allowed it to become the Apple of today, the most admired company in the world for four years running, according to Fortune.
As corporate comebacks go, Apple’s is legendary. Perhaps, because of the consumer nature of its business, even more legendary than Lou Gerstner’s turnaround of IBM in the early nineties, or Lee Iacocca’s reversal of Chrysler’s fortunes a decade earlier. It is more dramatic than Mark Hurd’s turnaround of HP, and more filmic that Anne Mulcahy’s rescue of Xerox. In June, a biopic called jOBS, starring Aston Kucher, James Woods and Matthew Modine began filming in Los Angeles.
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Corporate turnarounds, while nearly always less sensational than Apple’s are, in fact, quite common.
A cursory search of the term on Amazon.com (which itself was “turned around” by Jeff Bezos) reveals hundreds of titles, including “Ruthless Execution: What Business Leaders Do When Their Companies Hit the Wall” by Amir Hartman, which walks us through Cisco CEO John Chambers guiding that company through the telecom collapse. There’s also “Leading Corporate Turnaround: How Leaders Fix Troubled Companies” by Stuart Slatter, which includes case studies from BT, Virgin Express, Arthur Andersen, Parmalat, and GE. And there’s “Leading Corporate Transformation: A Blueprint for Business Renewal” which Symantec CEO Gordon E. Eubanks, Jr. described as “the key tool Symantec has used to start the shift from being a technology-driven to a customer-driven company.”
What we learn from this titles, and the hundreds of others like them, is that turnarounds are normal. They are ordinary. The life cycle of a multi-billion dollar company often includes a Bête Noire, and sometimes several.
That’s why much of the current round of hysteria focusing on Research in Motion seems to be floundering in context-less vacuum. An article yesterday by Zach Epstein of the website BGR.com called “Jim Balsillie, Mike Lazaridis, and the giant with no legs” is a lament that has become familiar.
Former RIM co-CEOs Lazaridis and Balsillie, says Epstein “…had the genius and the prowess to build a giant, but they lacked the vision to give it legs.” Epstein continues by offering that RIM is bringing out its new operating system, BlackBerry 10, at exactly the wrong time. The move bears a striking resemblance he says, to webOS, an operating system initially developed by Palm, which was later acquired by Hewlett-Packard and then scrapped. Epstein says a directionless RIM is now likely too far behind the leaders to recover.
“The odds, sadly, are not good, and this wounded giant grows weaker with each passing day.” says Epstein. “Completely writing RIM off at this point is a mistake though — just ask IBM. Or Ford. Or Apple.”
And that final sentence is where Epstein’s article diverges from the pack, if only for a second. RIM’s critics, which have gathered and sharpened their knives as the company’s share price has plummeted do have a leg to stand on.
They are right that Lazaridis and Balsillie underestimated the impact of the iPhone on its business. They are right that RIM was slow to react with new products and had too many of them. They are right that RIM’s handling of these blunders was a PR nightmare.
But pairing one example of a business failure that is booked and done beside one that is not is a dangerous game. RIM’s new operating system, as Epstein argues, may turn out to be as unsuccessful as WebOS. But Apple itself should never have stolen back market share from DELL and HP after the epic failure of the Apple LISA. IBM should have gone the way of bankrupt PC maker Commodore, but it didn’t. RIM itself survived to make the BlackBerry only after stints making film editing equipment, giant LED signs and high tech toothbrushes.
Research in Motion, which now has a new CEO In Thorsten Heins, isn’t PALM, which rarely made money or had RIM’s massive subscriber base. Nor is it Nortel (which RIM is often compared to for the reason that they are both Canadian, presumably), which was mired in accounting scandals and expensive, ill-fated acquisitions. RIM’s critics may turn out to be right; the company may be in the midst of a prolonged swan song. But the BlackBerry-maker, which grew its revenue from $6 billion in 2008 to nearly $20-billion in fiscal 2011, may just as easily be in the middle of a garden variety, shrink-before-you-grow, fallow period, of which there are hundreds of documented cases.
Research in Motion’s numerous critics do have a leg to stand on. But they are in desperate need of both legs, so at least one can be grounded in the broader historical context of the company’s predicament.
Below: An excerpt from Mac World 1997