It’s been an interesting few weeks in the world of smart phone technology and the markets. First Apple releases a cheaper iPhone 5C, and though sales are robust, investors react negatively while they contemplate will this have an impact on future profits. I wouldn’t say Apple is in trouble – but it was something to note. While here in Canada, Blackberry publicly admits to extremely disappointing sales of the B10, a massive operating loss and that they will be dramatically cutting staff and refocusing their efforts. Even with a buyout bid on the table by Fairfax Financial, stock prices continue to tumble.
Fairfax Financial wants to take Blackberry private again – stating that this should take the company out of the public eye while they regroup and refocus. Not quite the same message as Michael Dell who took his company private this year in order to make long-term investment decisions that investors wanting short-term profits would likely not approve of. Still, oddly familiar.
It’s now 5 years since the implosion of the banking industry, fed partly by the short-sighted focus on near term profits and executive bonuses. With this lesson now imprinted in our memory, does it lead us to question if short term shareholder expectations have an impact on a large company’s ability to be innovative and pivot when the market goes off in another direction?
Maybe it has more to do with being a business that focuses on what happens on a device, rather than nailing your colours to the mast to a particular device, but these company woes seem to be in stark contrast to the successes of such companies as Amazon and Google.
I recommend reading their letters to shareholders that accompany their company annual reports, as an interesting study in executive management. Jeff Bezos of Amazon writes an annual letter to stakeholders that clear states his intention to have the company be customer-focused rather than shareholder-profit focused. (Find 2012 letter on this page: http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-proxy). In his 2012 letter, Larry Page writes about Google’s mandate to impact the world by providing awesome user experiences http://investor.google.com/corporate/2012/ceo-letter.html
This leads me to ponder if the biggest impact on a company’s ability to innovate successfully is executive leadership. Evident in how the executives communicate and drive vision, both internally and externally. How they foster and support a profitable culture that is based on innovation and excellence. Things that are of influence regardless of whether the company is publicly traded or not.
Graphic Credit: Microsoft Clipart