New Blackberry CEO dashes hopes for quick turnaround
Research in Motion Ltd's could have chosen a fiery, inspirational new CEO but they chose a stoic engineer instead, dashing investor hopes for a quick turnaround for the struggling BlackBerry maker.
The softspoken and bespectacled Thorsten Heins, who had worked at Germany's Siemens AG for more than 20 years before RIM, failed to inspire Wall Street on Monday as he pledged to continue on the same path as his predecessors.
RIM shares closed down 8.5 percent at $15.56 on Nasdaq as the promotion of the largely unknown former chief operating officer was a disconcerting surprise for investors who were skeptical about his ability to turn around the Canadian group's fortunes, particularly after Heins suggested RIM didn't need new a strategic overhaul in his first TV appearances.
"I am a little concerned about some of the statements that the new CEO made around not needing drastic changes, focusing on marketing and having had issues with being too innovative," Carolina Milanesi, analyst at research firm Gartner said.
For his part, Heins tried mightily to rally RIM employees, analysts and investors around the sudden executive suite change.
"We will take this to new heights," he promised after taking over from co-CEOs Mike Lazaridis and Jim Balsillie, who finally bowed to investor pressure and resigned. "Innovation is endless, we will have a lot of fun."
But taking a look at his past at former employer, German engineering group Siemens, Heins is not one for transformation.
The Munich-born Heins, 54, started working at Siemens straight out of university in 1984, where he also met his wife Petra, a mathematician and physicist, and where he stayed until his move to RIM in December 2007.
Described as easy to deal and work with, Heins steadily moved up the ranks and eventually was CTO of Siemens' communications unit.
However, while colleagues attest to his calm and collected manner, Heins did not fit Siemens' efforts to build a more dynamic image and an emotional brand.
The criticism back then was that his style and rhetoric would rather reinforce this to-be-shed engineering image rather than selling handsets as life-style products which was one of the strategic guidelines.
Someone who is deemed to be too boring even for Siemens may not be what activist investors had in mind when they called for a new, "transformational" leader to help RIM compete with Apple's hugely popular iPhone and iPad and the slew of large-screen and powerful devices from Samsung and others using Google's Android operating system.
NOT REALLY CEO MATERIAL?
Heins' former boss at Siemens, Thomas Ganswindt, expressed his faith in Hains' abilities and said that Heins was a "very strong" leader and someone "able to recognise what is needed by an ailing business".
But Heins will have a lot of convincing to do.
One analyst who has met Heins but asked not to be named said RIM's new CEO is "definitely competent" but not necessarily charismatic enough to lead a company.
"He doesn't strike me or a lot of people as being CEO material," said the analyst. "You don't see him leading a group of people through the desert for 40 years."
According to CCS Insight's Ben Wood, "Thorsten is highly respected in terms of his knowledge of the industry and given that this appears to be a rather sudden turn of events, they needed someone who can quickly takeover the helm."
Others questioned whether Heins brings the right set of skills to the job.
"In our view, a CEO with a strong consumer electronics and supply chain background would have been ideal," Shaw Wu, senior technology analyst at Sterne Agee, said, arguing that whether RIM likes it or not around 70 percent of its business is consumer driven.
By the end of a mid-2011 restructuring, Heins was one of two chief operating officers at RIM, responsible for sales and for both hardware and software product engineering.
RIM marked Heins's ascent to the top role with a seven-minute YouTube video in which the 6-foot, 6-inch CEO gave his vision for success with a noticeable German accent.
He is not very well known outside of the company. He has been working in both Balsillie's and Lazaridis' shadow," said Alexandre Peterc, analyst at Exane BNP Paribas.
"He does strike me as someone who knows the industry very well given his background at Siemens. On the plus side he is a veteran of the industry and he knows his stuff, but that said, his background is very much tech and process orientated as opposed to strategic vision orientated."
RIM has been at pains to underline the orderly nature of the handover.
However, another analyst who requested anonymity because of his relationship with the group, said it was astounding that the COO at a company of this size should have been so invisible to the market and investor community.
He said he had heard previously from executives within RIM that Heins was very highly regarded and that he was very much on top of his brief. "His name came up repeatedly, with regards to people at RIM who really rate him."
Nevertheless, the move was reminiscent of Hewlett-Packard's rush to find a replacement after it ousted CEO Mark Hurd. It decided on former SAP AG CEO Leo Apotheker but reversed the much-criticized step four months ago by hiring former eBay Inc CEO Meg Whitman to replace Apotheker.
As takeover talk swirled and the financial world pondered whether Heins had been appointed to lead a turnaround or prepare RIM for sale, he clearly now is going to have to communicate quickly, get to know investors and raise his public profile.
That will likely leave Heins little time to follow the games of his favorite basketball team the Miami Heat or ride his motorcycle, which true to his German roots is a BMW model.
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