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Saving BlackBerry: CEO John Chen Says How

CEO believes an obsessive focus and a great team are crucial for a turnaround

Rich Karlgaard
Published: Apr 5, 2014 07:24:22 AM IST
Updated: Apr 1, 2014 05:30:38 PM IST
Saving BlackBerry: CEO John Chen Says How

Steve Jobs did it at Apple. Lou Gerstner and Sam Palmisano did it at IBM. But tech turnarounds are rare. John Chen, CEO of BlackBerry since November, is trying again. BlackBerry is Chen’s second major turnaround attempt. His first was Sybase, a database pioneer that had been crushed by Oracle. Chen came in, found a niche in mobile data and sold Sybase to SAP in 2010 for $5.8 billion.

I had lunch with Chen recently to talk about his plans to fix BlackBerry.

Q. Why attempt this?

I thought the world would be better off with a strong BlackBerry. You know, the company has 44,000 patents. And I thought it might be a fixable thing. It will be a difficult challenge, but if it were going to be easy, why do it?

Q. Android and Apple own the mobile market. Even mighty Microsoft struggles. Can a small player survive?
Sure. Take the automotive industry; it’s not all about volume. What do you call Porsche? What do you call Lamborghini? Porsche is doing extremely well. Now, Porsche serves a particular segment of the market, doing well for its shareholders and owners. It always serves the market for a purpose, which is the whole point.

In the short term, there are enough users of serious computing that want a keyboard. You have CEOs who whip out their BlackBerrys because of the keyboard. They don’t care about apps. And, from a security point of view, I’m starting to worry about where these apps are actually coming from.

Q. How many potential customers fit that profile—wanting a keyboard but not wanting apps?

There’s a huge market segment out there for any regulated industry. Governments, financial services, health care. I think we can go capture those and become a winner. I have two companies in Europe now that have reversed their policies on letting people bring their own devices to work. It presents too much of a security risk. After Angela Merkel was hacked, she moved straight to a BlackBerry.

Q. Assuming BlackBerry survives the short term, what are your long-term plans?
The devices will change, but the need for security, productivity and communication will continue to grow. These are the three building blocks of all things internet and all things ‘connected’. Security is more than an exercise in avoiding snooping or being listened to or copied. It’s also about data security. You can’t afford to have somebody steal or change your data.

Q. How big is the market for users who put productivity and security ahead of communication? Regulated industries’ share of IT spending is 30 percent. I assume the same percentage for telecom spending—30 percent.

Why are tech turnarounds so hard? Because the amount of time you have to execute your plan can be dramatically changed by your competitors. There’s no time to recover from mistakes. You have to be right most of the time.

Q. Do you need a strategy, or are fast reflexes enough?

You must have short-, medium- and long-term strategies. And a lot of time you have to put the medium-term strategy in play. I had to do that at Sybase many times. We’d go down these paths, and some wouldn’t work. But we had laid out a long-term plan, a medium-term plan and a short-term plan. A lot of companies have only one plan. That’s great if things go perfectly, not so great if things blow up.

Q. What makes a great turnaround team?
Urgency. And an obsessive focus on things that matter. You build a team by picking people who understand this. The CEO and the team need to know the details. You can’t know the minute details about everything, but you need to know the details. In an emergency room, the doctor is hands on, whereas in a teaching hospital the doctor could just act like a professor and talk someone through the procedure. Turnarounds are different; they’re like an emergency room, and you can’t be afraid of blood.

Rich Karlgaard is the publisher at Forbes

(This story appears in the 18 April, 2014 issue of Forbes India. To visit our Archives, click here.)

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