“I actually didn’t even know why I agreed to come” said John Chen during his conversation with RBC Disruptors. A bit late to backpedal as it were, seated in front of hundreds of rapt listeners interested in hearing about Blackberry’s big pivot. John Chen has done many such talks since assuming his role as Chief Executive Officer of Blackberry. He’s known for his ability to turnaround companies that are seemingly in their end days. “By the time I get there, it’s about the time you’re booking the priest.”
John’s self-bemusement came from the fact that he had agreed to give the talk to RBC employees, despite RBC not being amongst Blackberry’s list of partnered banks. That’s the price of getting the word out sometimes. As John pointed out, there’s a large amount of equity bundled in the name “Blackberry”. A request for a meeting with the senior management of Blackberry to discuss security has a good chance of being punted to the front of the line. That wouldn’t be the case if Blackberry rebranded with a different name in order to reflect a fresh start and new focus.
Blackberry is still known as one of Canada’s biggest tech successes, despite it’s disappointing downturn. In 2007 Blackberry was the highest valued company on the TSX. 6 short years later, stock prices plummeted and Blackberry was eclipsed by Apple and Android. Where it was once a point of pride to be carrying a Blackberry phone, it quickly became passe.
On a daily basis Chen comes across “the last Blackberry user”, the final hanger-on whose phone was ultimately wrenched from their hands. So many people loved the keyboard! Unfortunately, those who miss their old phones won’t be getting them back. Part of Blackberry’s pivot is doing a 180 turn away from the smartphone hardware space. The battle for smartphone dominance, Chen sees as last year’s fight. Instead, Blackberry is returning to it’s roots: software and security.
Blackberry is now targeting highly regulated industries that need to show proof they’re complying with intensifying security regulations. That’s why Blackberry is highly focused on the AI space, having recently acquired the AI security firm Cylance for $1.4 billion.
It speaks to the success of Blackberry’s new leadership that a company that once held several billion in debt was able to correct it’s balance sheets and pay for a large addition with cash. It wasn’t easy, and Chen stressed that “as bad as you think it is, it’s worse”. But that’s exactly what drew him to the task. “I don’t like to be a fairweather golfer” Chen stated. A handyman at heart with no handy skills to speak of, he gets his fixing fix by taking on seemingly insurmountable challenges and turning them into success stories.
Chen, a natural storyteller, boiled his approach down to some core concepts. No matter the size or history of a company, it’s not too late to prop up the sails. These were my big takeaways from the talk:
Blackberry doesn’t dominate the smartphone market anymore, and that’s ok. “Blackberry’s been doing security and communication for over 30 years”. That allows the company to focus their resources properly, creating revenue streams from there. Blackberry can now delve into the automobile technology sector, become leaders in IoT security, and still make money from their operating systems by licensing them out to independent phone vendors. Now they have stronghold over three emerging and lucrative areas, rather than trying to pick up strictly where they left of.
That’s not to say there won’t still be competition. Blackberry just knows they offer something valuable these days: anonymity of data. Instead of building a strategy around the monetization of consumer info, Blackberry has gone the other direction. Chen states that Blackberry seeks only to be a conduit for security and is completely uninterested in the data it handles. In fact, Blackberry’s security systems have an algorithm that disposes of held data within a short time period.
Companies that overextend themselves lose touch with their core value proposition. It makes it harder to confidently sell your offerings when your elevator pitch is lengthy and vague. Especially for companies like Blackberry that have limited resources in comparison to their competitors, it makes sense to hone in on what sets them apart.
Most companies deal with silos, or competing interests between departments. Untenable silos will quickly frustrate employees and ensure that work is constantly stalled. Chen indicated at two methods for eroding silos. The first is to set clear goals that hold management accountable and force collaboration. The second is to move senior management around so they can experience the gamut of pain points firsthand and figure out a way to support all parties.
The first method, of creating clear accountability-driven goals, is effective enough, but Chen favours the second method. Not only does it help managers get to know the challenges of different departments, but in doing so they develop diverse talents. This makes them more valuable, and broadens their horizons so they can move into different business areas in the future.
Chen was asked how often he moves around senior managers, since that’s the method of silo-busting he prefers. His answer? “I don’t.” That’s because Blackberry is currently in survival mode as it rebuilds it’s brand and rolls out it’s new strategy. Chen doesn’t have the luxury of mixing things up with senior management. If he rocks the boat too much at this point, it might tip over.
For companies in survival mode, this makes sense. When you’re hanging on by a thread is not the time to start doing acrobatics. It may be tempting to throw everything against the wall in hopes that something sticks, but it’s better to carefully pick and choose where to concentrate resources.
When asked how he motivates senior management, Chen replied that transparency is key. People appreciate transparency, especially when it’s coming from their higher-ups. Moreover, people know when they’re being lied to.
Chen has little choice in the matter, running a company that has already gone down in history as a catastrophic flop. “You explain exactly where you are. They [senior management] may or may not have liked what I said, I think they do trust what I say. You can do a great marketing job, jump up and down on stage, it doesn’t really work because people are all intelligent. They sit there and they know what’s going wrong and when they get back to work they also see the challenges.”
Employees know what’s going on where they work, even if it’s just a feeling in the air. By being transparent with employees, upper management demonstrates trust in their staff and can gain control of the conversation. Yes, there are challenges, and we know how difficult it will be to succeed. But we’re still going to try.
Immediately following transparency is fairness, in Chen’s approach to motivating management in a turnaround environment. “A lot of diehard Blackberry employees will sacrifice a lot, and helping Blackberry get back to the old days of being a great company. Anything we do, they must feel it’s fair. If we don’t do that, that’s when things collapse. (sic)”
A great way to kill employee motivation is to issue criticism hapzadardly. A policy of fairness has worked for John Chen, proving it’s both considerate and effective.
There’s no room for dejected employees at Blackberry. Chen was asked what kind of culture he surrounds himself with, given that it’s an obviously uphill battle for any new senior manager. They’re all enthusiastic during their interviews, but it’s a specific attitude Chen looks for.
“I tell them, think about how bad we are, it’s worse. They’re eager to have the job, they say it’s ok, we’re here to solve problems. I say oh no, that’s really bad. I need people, come in, look at the problem, see it as a challenge to solve.” Chen wants his management staff to have the same fix-it man attitude as him.
“You have to have the right attitude to deal with the problem. No we don’t have all the resources in the world. Yes we have Google, Microsoft, IBM breathing down our neck. No we don’t have the ability to find the best talent. You still have to deliver. And if you don’t deliver, you have to leave. You have to make something happen is the mindset.”
Blackberry may have an illustrious history, new contracts in the works and equity parceled with the company name, but the journey is just beginning. It’s easy to look at the glass as half empty: not enough resources, too much competition. The thing with that type of mindset is it’s extremely unproductive. If you have two sticks to rub together, you can make a fire.
With so many startups hitting the market every year, it’s been proven over and over again that it’s possible to do great things with humble means. This is the kind of mentality Chen stands by. “It’s refreshing if you can get something done with very little. That’s my MO, focus, that’s what excites me.”
Chen talked about his love of contract bridge, a game not everyone in the audience was familiar with. Essentially, it’s not about the hand you’re dealt, but what you do with that hand. By making the most of a band hand, you win the game. “Anyone can win when they’re dealt a good hand” said Chen. Winning with a good hand isn’t impressive.
Leadership is defined by one’s competency during hard times, not the ability to coast. Believing you can win with a bad hand is key to maintaining optimism throughout a rocky period. Whether it’s contract bridge or pickup 50, there’s always a chance of becoming the dark horse in the card game.
John Chen kept the RBC audience hanging on a word with his clear-headed message and knack for humour. He may not be confident to change a lightbulb in his home, but he seems to know what he’s doing at the helm of Blackberry. As consumer technology becomes more sophisticated, preserving the integrity of inter-device communication will become a greater challenge and carry bigger risks. Blackberry has now become a leader in an entirely new race.
If a packed auditorium at the RBC Waterfront building is any indication, Blackberry is once again back on people’s radars. You might even say Blackberry’s back…alright!