Capitalism is dying. And it’s the capitalists that are killing it. RIM is essentially dead, but the Board is still insulting us all by paying its executioners a bonus.
I occasionally spend part of Saturday is the office (really, I’m trying to kick the habit, but I’m addicted to my job), mostly catching up on e-mail and perusing the trades. A story from Friday at InformationWeek (whom I also write a column for) just caught my eye. Apparently, the two former Co-CEOs at BlackBerry maker Research in Motion (RIM) are walking away with millions in severance and related benefits – and this while the layoffs continue and the stockholders get the shaft. This is absolutely, truly outrageous, and I’m appalled that the Board, which, as I previously noted, is made up of insiders and friends, would so blatantly slap these two vital constituencies so violently. Really, RIM? The best thing you can do with your cash is to give it to the two incompetents who flew the plane into the ground? Really?
But wait, you might say. This is a company exercising its prerogatives and such an action isn’t illegal. Sure, right on both counts. But the fundamental morality of this action is bankrupt (just like the rest of the firm will eventually be). Why have we allowed the greatest engine of wealth creation ever devised, capitalism, to become so perverted and corrupt? Why do the managements of so many companies think it’s all about them? In my book, customers come first – as Peter Drucker reminded us lo those many years ago, the only legitimate reason for an enterprise to exist is to serve a customer. RIM has done a poor job here, essentially ignoring the tremendous shifts in both technologies and markets that have always defined the smartphone business which they, of course, had a big hand in creating. Customers are bolting. The shift to BYOD will leave RIM with nothing but problems from here on out. Shareholders come second. It’s their money; they own the company. The Board should represent them above all other interests. Employees come next; they create the wealth and value. And managers come last. Don’t get me wrong, good managers are hard to find, and success in any venture is highly unlikely without effective management. But management is really all about optimal resource allocation; not being the boss, and carrying water for the other three constituencies, not engaging in self-serving behavior while everyone else loses.
I call upon Messrs. Balsillie and Lazaridis to voluntarily give the money back. Granted, these guys did a marvelous job earlier in the company’s history, and they were handsomely rewarded at that time. What they’ve done for those to whom they were responsible until lately is another matter, and they deserve no reward for that. To accept this kind of compensation is outrageous, reprehensible, arrogant, and insulting to capitalism and civilization at large. I’ll never side with Occupy Wall Street or any similar group, but even I must admit they have a point. And all of us have the evidence.
