Strategy

All-Star execs: Most Innovative: Jim Balsillie and Mike Lazaridis

Waterloo, Ont. duo create an icon.

Most innovative executives

Jim Balsillie • Research In Motion Ltd. (TSX: RIM) • Years at company: 16 • Age: 47
Mike Lazaridis • Rsearch In Motion Ltd. (TSX: RIM) • Years at company: 24 • Age: 47

Next challenge: Continue global expansion, despite recession, and make inroads with consumers.

For humble Canadians, it has always seemed like a story too good to be true: a small company based in a small southwestern Ontario city creates a product that defines one of the hottest markets in technology, the smart phone. But since Research In Motion Ltd. launched its BlackBerry in 1999, it’s been the device that, for many people, first demonstrated the power and potential of ubiquitous wireless data communication. The BlackBerry has become a corporate standard, a global brand, a cultural icon — even an addiction.

That’s no small achievement. But the road that co-CEOs Jim Balsillie and Mike Lazaridis have taken to this point was anything but obvious. Many of the innovations that fuel RIM’s sustained competitive advantages are overlooked or misunderstood.

Credit for RIM’s unparalleled success most obviously rests with Lazaridis, co-founder and unofficial chief technologist (as well as president), who continues to define the BlackBerry vision. “The BlackBerry system itself is composed of hundreds of thousands of individual innovations,” he says, proudly rhyming off a litany of in-house developments, including the operating system, the e-mail program, the push e-mail protocols and — not to be overlooked — its best-in-class encryption software. “We have nearly 10,000 people all focused on the same product,” says Lazaridis. “At a time when the pace of new product introductions and new technologies is accelerating, it’s an incredible opportunity to, as craftsmen, perfect the technology.” Gadget bloggers may debate the merits of various keyboard layouts, but Lazaridis extols the virtues of the BlackBerry’s open, standards-based software platform: it can easily be loaded onto any new hardware design, and is flexible enough for fresh-minded co-op students — of which RIM employs 800 a year — to quickly code new applications.

Balsillie’s contributions are no less innovative. An accountant by training, he has steered RIM’s business strategy since 1992. And he has done so in some fateful directions, such as the early focus on business customers, and the controversial call to sell through — and share revenue with — wireless carriers, even creating dedicated business units to support each carrier. Lazaradis highlights Balsillie’s more recent aggressive push to expand globally, beginning in 2005, to support multinational customers’ interest in standardizing their mobile IT on the BlackBerry Enterprise Server. “We were way over our head,” says Balsillie, “but we did it in just enough countries that corporate CIOs felt supported.” He also made the call to not compete with application developers, but to partner instead. “There is no shortage of strategic invitations to move outside of our core competency,” says Balsillie. ‘‘There is no perfect certainty, but I think we’ve done the right thing.”

Ultimately, RIM’s success rests largely on the unique, long-standing Lazaradis-Balsillie partnership, in which they share authority and divvy responsibilities. “It’s like having a big farm with a whole lot of acreage to plow, and two guys who know how to drive tractors,” says Balsillie. The co-CEOs both actively meet with their customers and partners. Even in a BlackBerry world, doing business requires valuable face time. “We can divide and conquer,” says Lazaridis. “We can provide a very personal touch to our carrier partners around the world, for instance. And because we both work 24 hours a day, seven days a week, it’s like getting 48 hours a day, 14 days a week.”

The question clouding RIM’s horizon is whether its technology and business model will withstand growing competition from innovative market entrants, like Apple’s surging iPhone or Google’s new Android smart-phone operating system. From early August to late October, RIM’s stock fell more than 55% as the global financial crisis blasted holes in Wall Street, one of the company’s big customer segments. And analysts fret about how RIM’s new focus on consumers will shrink margins. But as the co-CEOs like to point out, it’s still early days for the smart-phone market, and RIM has proven to possess remarkable vision, resilience and agility. “It’s so much a work in progress,” says Balsillie. “I feel we’ve barely started.”