After 20 years of occupying one of the most influential positions in the global wireless industry, Jim Balsillie has decided to step down. Unable to align himself with the new image CEO Thorston Heins has projected for Blackberry, Balsillie dumped his remaining 5.1% stake and vacated his position as Head Chairman, in what can only be perceived as a grandiose show of capitulation.
Balsillie’s story is one of ubiquity in Canada. With Mike Lazaridis, Balsillie joined what was then RIM (Research In Motion) in 1992. A true entrepreneur, Balsillie re-mortgaged his house for $125,000 to kickstart the company. In the years that followed, Jim’s vision would come to fruition, providing consumers with a revolutionary wireless secure system for sending and receiving emails in a timely manner.
Though the company enjoyed many years of prosperity, the past years have been anything but prosperous. Touchscreen smartphones pushed by heavyweights such as Apple and Google have become a significant detraction from what RIM so fervently raised the smartphone industry to become. Holding strong to its tactile keyboards and in-house operating system, and Balsillie out pursuing NHL teams, RIM found itself alienated by both its consumer demographic and direction. The height the company had achieved only lead to a dismal downward tailspin. With management unable to come to agreement, RIM sought new leadership in Thorston Heins.
Though Balsillie’s story is unique, one can’t help but draw parallels with other famous entrepreneurs such as Steve Jobs, or Canada’s own Peter Munk. Munk’s story begins much in the way Balsillie’s did, both tenacious salesman with a vision. Munk’s vision was of an enticing blend of fine electronics with the modern allure of Scandinavian cabinetry. It was under this vision that Munk founded Clairtone in 1958.
Clairtone’s distinctive style and quality electronics, along with celebrity endorsers such as Oscar Peterson, and the tagline, “Listen to Sinatra on Clairtone stereo. Sinatra does,” was what brought Clairtone to unprecedented success for a Canadian Electronics company. Between 1958 and 1963, production had soared from 350 units per year to over 25,000 units, selling half their production to prestigious American accounts such as Bloomingdale’s and Abraham & Straus.
Much like Balsillie and RIM, Munk’s prowess as an astute businessman grew along with Clairtone’s success. Journalist Alexander “Sandy” Ross claimed that “Peter Munk was probably one of the most admired young men in Canada, the closest thing to a hero the Canadian business community has produced in a generation.” Munk admitted that he would sometimes have to “pinch himself” he was so bewildered with the achievement of Clairtone.
But as with Balsillie’s vision for RIM, Munk’s vision of Clairtone met with an untimely demise. Unable to keep up with demand, Clairtone made the fatal move of relocating its production warehouse to a deprived coal-mining town in Nova Scotia. With a workforce unwilling to work the long hours the manufacturing industry required, a disjointed supply chain, and transportation routes too hazardous for finely tuned products, Clairtone listed losses for their first year, and was acquired by the Nova Scotia Government shortly thereafter in 1967.
Ironically, it was later said that it was Munk’s talent as a salesman that brought Clairtone down. Able to sell himself and his ideas to anyone, he held his sights too far into the future, overlooking complications that might arise in the short-term. Could the same be said for Balsillie? Was his vision of restoring RIM back to its former glory too strong to allow him to see the more immediate problems?
But Munk’s entrepreneurial spirit held strong. He went on to found the Southern Pacific Hotel Corporation — the largest hotel and restaurant chain in Australasia — and Barrick Gold, the largest gold mining company in the world. It would seem he learned from his past mistakes. Peter Munk now describes the years between 1966 and 1977 as the hardest years he’s ever experienced. To this day he is able remember “every single humiliating detail.” Comparing his success of the most recent 35 years, Munk says, “everything I have done since then has been easy.”
The media has painted Balsillie’s move away from Blackberry as classless. Though, could it instead be that Balsillie’s abdication from Head Chairman at Blackberry was simply an attempt to gain closure from the past? Unwilling to let past mistakes burden him further, is he looking to new bright horizons, much like Munk did with Barrick Gold?
During an inquiry into Clairtone’s affairs, held in Nova Scotia, Frank Sobey was called to testify. Even while facing the harshest of criticisms Sobey defended Munk saying, “It’s a good thing we have people like Peter Munk in Canada. He’s a builder. He has the ability, he has the energy, he has the courage to go out and create industries. It’s people like Peter Munk that created all our industries in the United States and Canada.” He continues to say that it’s “people like that that trigger industrial development, people like Peter Munk that have courage. The people that sit back without courage, and do a lot of talking and a lot of criticism, make no contribution to the industrial development of our country. That’s all I want to say.”