Blackberry:How to Managing Explosive Growth

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RESEARCH IN MOTION: MANAGING EXPLOSIVE GROWTH

Daina Mazutis wrote this case under the supervision of Professors Rod White and Paul W. Beamish solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.

Richard Ivey School of Business Foundation prohibits any form of reproduction, storage or transmission without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Richard Ivey School of Business Foundation, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2008, Richard Ivey School of Business Foundation

Version: 2011-09-21

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In early January 2008, David Yach, chief technology officer for software at Research In Motion (RIM), had just come back from Christmas break. Returning to his desk in Waterloo, Ontario, relaxed and refreshed, he noted that his executive assistant had placed the preliminary holiday sales figures for BlackBerry on top of his in-box with a note that read “Meeting with Mike tomorrow.” Knowing 2007 had been an extraordinarily good year, with the number of BlackBerry units sold doubling, Dave was curious: Why did Mike Lazaridis, RIM’s visionary founder and co-chief executive officer, want a meeting? A sticky note on page three flagged the issue. Mike wanted to discuss Dave’s research and development (R&D) plans — even though R&D spending was up $124 million from the prior year, it had dropped significantly as a percentage of sales. In an industry driven by engineering innovations and evaluated on technological advances, this was an issue.

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R&D was the core of the BlackBerry’s success — but success, Dave knew, could be a double-edged sword. Although RIM’s engineers were continually delivering award-winning products, explosive growth and increased competition were creating pressures on his team to develop new solutions to keep up with changes in the global smartphone marketplace. With 2007 revenue up 98 per cent from the previous year, his team of approximately 1,400 software engineers should also have doubled — but both talent and space were getting increasingly scarce. The current model of “organic” growth was not keeping pace and his engineers were feeling the strain. As the day progressed, Dave considered how he should manage this expansion on top of meeting existing commitments, thinking “How do you change the engine, while you’re speeding along at 200 kilometres per hour?” As his BlackBerry notified him of dozens of other urgent messages, he wondered how to present his growth and implementation plan to Mike the next morning.

RIM: RESEARCH IN MOTION LTD.

RIM was a world leader in the mobile communications market. Founded in 1984 by 23-year-old University of Waterloo student Mike Lazaridis, RIM designed, manufactured and marketed the very popular line of BlackBerry products that had recently reached 14 million subscribers worldwide and had just over $6

This document is authorized for use only by Taehyun Kim at Yonsei University until October 2013. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860.

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billion in revenue (see Exhibits 1 and 2). In early 2008, RIM was one of Canada’s largest companies with a market capitalization of $69.4 billion.1

The BlackBerry wireless platform and line of handhelds could integrate e-mail, phone, Instant Messaging (IM), Short Message Service (SMS), internet, music, camera, video, radio, organizer, Global Positioning System (GPS) and a variety of other applications in one wireless solution...
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