CEOs are generally slow, stoopid, and anti-good   April 5, 2012

April 5, 2012

Overblown & obnoxious opinion mode: ON. Continue at your own risk and realize it is likely that you will be offended no matter who you are.

I read frequently about one-trick companies like Nokia, HP, Rim, Yahoo, and BofA that are on a hopelessly slow and irreversible downward spiral. The CEOs of those companies publicly lament their bad fortune or how cruel the market is to their wonderful company. Really, they need to just man up and admit that they were too slow to respond to take serious action when their company experienced a major downturn. Their lameness rendered their company powerless to respond to major market shifts. Begin the intellectual property & patent firesale! Break the desks into kindling and put an ad on craigs list for firewood at $1/pound!

Companies like Sony and Samsung and IBM can have massive business failures and do just fine because they have mutliple lines of revenue (Sony – studio, consumer electronics, gaming network, software; Samsung – consumer electronics, commercial electronics; IBM – hardware [formerly], consulting, software, data center).

Take Sony as an example of good, responsive management.  As the whole video game market begins to move overwhelmingly towards casual gaming, Sony has jsut barely started to suck it on the gaming side of their business. So they dropped the price of their TVs and electronics and everything balanced out over the last few months for them.

If a company does one thing (Nokia, RIM – phones; HP – computers; Yahoo – web properties; BofA – toxic loans), then the CEO’s job is to be extra responsive when they find their single-market company taking a dive. They have no fall back. Look at your myriad of reports and respond decisively.

Nokia’s phones are nearly irrelevant now. Perhaps the new Lumia 900 with Windows Mobile 7 will save them, but likely not. Windows Mobile 7 is a risky semi-player in the smartphone OS world. It is a distant third behind iOS and Android. Is Nokia really so well-positioned to make that surefire turd their last-ditch? Nokia began becoming irrelevant about 4 years ago. As platform-based smartphones became the de facto standard in handset purchases, Nokia continued to make lame RAZR wannabes and unsexy wedge-shaped, plastic-y semi-smart phones. They raked in the cash and refused to evolve while RIM scooped up the corporate market and the power users with mature smartphones. It was clear where the market was headed. Nokia refused to create a platform or commit to a single platform. Their strategy? Develop for EVERY platform, but do none of it well. Gargantuan budgets were pissed away making phones for Symbian 7 thru Symbian 10, webOS, Palm OS, Java ME, BREW, WebKit, mobile FX as well as developing numerous half-baked homegrown mobile platforms. Most projects — mercifully for the public — never got released. Sometime late last year, they dumped it all to go Windows Mobile 7. This came from the top. Their CEO sent out a company-wide email that declared “the sky is falling” and they needed to remove huge layers of management and internal bureaucratic processes. Possibly. It seems to me that trying to license iOS (tough) or developing a killer handset that runs the latest Android version (ice cream sandwich) would be a better bet. They have the programming talent, no doubt. It would have been an easy call for the CEO. But directly due to his bad call, they are downsizing rapidly. Sucks for Finland.

It’s the same situation at RIM. The BlackBerry is accelerating rapidly towards the grave. RIM’s terribly named PlayBook tablet was stillborn before it even got to market. It didn’t help that it was released without a mail client, calendaring app, or Skype. A complete lack of 3rd party apps was a big problem (see also HP’s TouchPad). Ok, very few tablets can compete with the iPad. So if your company is struggling badly, why jump into that uncompetitive market at a cost of hundreds of millions of dollars? Kill the project, take the codebase and put it toward a killer Android phone or television or who knows what. Now the CEO of that company is taking about selling off patents. That’s not a very odd and unsustainable form of revenue. That, as I’ve heard it, is the ONLY plan. Now that is a real dipstick of a CEO.

These CEOs have very good data and personnel at their disposal. It seems to me that egos are preventing good job-saving decisions from being. Shall we just chalk it up to a wave of capitalistic Darwinism?

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