When it was announced that BlackBerry was going to be at CES, I thought it was just another jolly for the BlackBerry C suite boys. CES is a consumer electronics event and BlackBerry has stated it will execute a strategy to put focus back on the enterprise.
However, rather than being a BlackBerry embarrassment the news coverage shifted from talking about from “BlackBerry the struggling smartphone maker” to “BlackBerry is potentially making a successful turnaround.”
For me this is fascinating and I want to explain what I think is happening and why.
The necessary ingredients of a Turnaround
The critical circumstance needed for a turnaround, as demonstrated by the late Steve Jobs, is that of “belief”. The first thing Jobs did in his turnaround attempt with Apple was to meet Bill Gates. He went as a supplicant and struck a deal. He agreed that Apple would stop trying to sue Microsoft and became a strategic partner in exchange for a $200M investment. The key part for Apple was that both the investment by the richest guy in the world and the renewed relationship created the impression that Apple was on the mend. Investors and the media flipped from believing Apple was doomed to fail to believing Apple was on the mend.
Both of these pre-conceptions can be self-fulfilling prophecies. If people believe a company will fail, they won’t invest in, or buy from the company If they believe the firm is at a low point but will improve, then the firm flips from a bad investment to a potentially incredibly good one and customers are again comfortable buying from it.
Jobs dealt first with the appearance of failure in the late 1990s, Apple wasn’t really out of the woods until nearly five years later, it was the belief that it would be successful that allowed Apple to exit the woods and gain greener pastures. Investors backed the belief and did very well financially, customers that bought looked particularly smart at the end of the cycle. And yet, the only thing that really changed was how the company was viewed. The structural and product changes that actually turned the firm around not only occurred subsequently, they were dependent on the “belief” the the company would be fixed.
BlackBerry at CES
CES is a consumer show, however those covering tech are asked to cover both consumer and business segments and there wasn't that much business news at the show. In effect, you had hundreds of Journalists and Bloggers who still needed to write business-oriented stories and all they were getting were loads of product announcements. John Chen and his team stood out by having a business message during a consumer show and BlackBerry was able to get audiences to hear its turnaround story and the progress it had made.
The Bloggers and Journalists appeared to be already positive because this year’s CES was reported to be one of the best in history but they were impressed with what John Chen had to say. For a start he made himself available to everyone and his message was critical in moving the coverage of BlackBerry from a company that was sure to fail, to one that is on the mend and recovering.
This is impressive work by Chen, previous efforts by BlackBerry to show a presence at events of this nature have not been successful, I remember one anecdote from the recent past stating that “BlackBerry Execs typically stand on the side-lines, hiding, like shy girls at a dance”. (Unfortunately I can’t attribute the quote, it was from a linked in post)
Chen has a deep understanding of how to communicate to the market, he speaks without notes or doesn’t engage in unnecessary industry jargon. This is very important because most people who buy stock are not experts in the field which their “preferred” company operates in and do not like being baffled by BS. John Chen’s use of CES as a mechanism to communicate his vision has been exceptionally creative as well as effective.
Can the NSA Help BlackBerry?
The NSA disclosures, particularly those calling out the penetration of Apple products should offer an important unique selling point for BlackBerry by forcing the market to (re?) recognise the importance of security. When it was disclosed that iPhones had tracking software installed on its phones it responded that it had been done without its knowledge and declared it had not worked with the NSA. This was not a denial that the software was on the phones. It merely confirmed the part of the report that said this was done without Apple’s knowledge. Security and IT professionals who are used to looking at the shades of meaning in announcements likely saw this as a unspoken admission that the iPhones were compromised but more importantly that BlackBerry was, thanks to being a Canadian company, uniquely immune to the NSA efforts. It is to be hoped that the market will come to recognise that Security is once again considered more important than consumer features, particularly for corporate phones.
People’s perception is their reality. By focusing effectively and quickly on correcting the perceptions that surround BlackBerry John Chen has begun to deliver a positive result on perception. One very telling difference is that traders who have shorted the stock all the way to the bottom are now going long
He now needs to deliver on his end game promise. What we hope to see at the end of this journey is a smaller company with a place in the business of secure communications. I wish John Chen and all at BlackBerry success in their travels
But the end of one journey is just the beginning of another!