SAINT MARTIN’S UNIVERSITY

Research In Motion The Communication Challenges of BlackBerry

Josiah Shelman & Sommer Valles 12/9/2013

When Mike Lazaridis began college, he started making wireless, programmable displays for advertisements. His economics professor convinced him that he had a great business idea and encouraged him to start a company; in 1984 that’s exactly what he did. He started the company with his long-time childhood friend and fellow engineer, Doug Fregin and named the company

Research In Motion. Business started out slow as they only sold 100 units of their first LED signs, but soon Mike shifted his focus to wireless telecommunications. In 1992 he hired Jim

Basillie, a Harvard MBA graduate and future co-CEO of RIM, to help with the business side of the company. RIM really hit its stride in 1996 when they developed the first two-way messaging pager. From then on RIM continued to pave the way in telecommunications and released their very first Wireless PDA named the RIM 950, which later became known as the Blackberry.

RIM has been fighting to stay competitive for the past decade. They have faced many communication challenges, both internal and external to the company, that have led to their decline. Those failures include: lack of two-way communication, lack of leadership, and failures in its internal communications.

Internal Communication

RIM has been on a drastic decline for the past few years and a major factor has been the lack of internal communications. The CEOs, upper management, and board members have continued to disagree and cannot come to a conclusion on what direction the company should head. Thus in essence the company has continued to fall behind and at this rate will not be around for much longer.

IPhone called, no response

On January 9th 2007, Apple released the revolutionary product called the iPhone. It was one of the first phones that used a touchscreen instead of a keyboard. It had many new and exciting features that offered a lot more to consumers than just email. RIM failed to see Apple as a legitimate threat and it wasn’t until November of 2008 that they offered a true response with the BlackBerry Bold 9500. Instead, CEO Mike Lazaridis did not listen to the market but focused on the miniscule details of the . Lazaridis was even quoted in a meeting say that “There will never be a BlackBerry with an MP3 player or camera.”

Co-CEOs Could Not Agree

As RIM started to decline, so did the relationship and communication of the two CEOs of blackberry. Lazaridis and Basillie were always known to have small arguments behind the closed doors of the conference room, but the more trouble RIM got into, the more the CEOs bickered.

The fights began to spread out of the boardroom and into the hallways of the main campus of

RIM. One of the main issues was that Lazaridis would and could only focus on security, battery life, and network performance, while Basillie wanted to shift the focus to instant messaging software. According to Jonathan S. Geller, Author of Inside RIM, “Mike is convinced people won’t buy an iPhone because battery life isn’t as good as a BlackBerry” (Geller, 2011) . This thinking was exactly the opposite of what the consumers wanted and the market proved this.

Customers are looking for the next big thing, not increased battery life and security. Lazaridis and his top executives could not agree. Another strong issue was that, “Chief Marketing Officer,

Frank Boulben, and Chief Operating Officer, Kristian Tear, dismissively told Mr. Lazaridis that the market for keyboard-equipped mobile phones – RIM’s signature offering – was dead” (Houpt,

2011). Even upper management was afraid to bring up new and fresh ideas in the company. An article was published saying “Sometimes, feedback from customers that might inspire changes would die at middle management, because senior executives didn’t want to bring it to Mr.

Lazaridis” (Hartopo, 2012). Lazaridis and his executives could not agree on what course of action blackberry should take, and because of this many executives began to leave.

The Lost Executives

As RIM declined many top executive began to resign from their positions at RIM and look for employment elsewhere. Blackberry had 6 top executives leave within the period of one year. Timeline: Resignation of RIM executives

• March 4th 2011 - Keith Pardy, Chief marketing officer

• June 17th 2011 - Brian Wallace, vice president of digital marketing and media

• July 19th 2011 - Ryan Bidan, senior product manager

• July 25th 2011 – Don Morrison, COO

• August 31st 2011 - Mike Kirkup, head of developer relations

• September 29th 2011 - Tyler Lessard, vice president for global alliances and developer

relations

Both Brian Wallace and Ryan Bidan left and joined Samsung mobile. Another executive that left not long after was Chief Technology Officer, David Yach. This rapid loss of executives had drastic effects on Blackberry. It forced the company to function with a severe lack of leadership.

Blackberry also had a lack of organization and development. Its stock also continued to decline, as investors did not like the sudden loss of so many executives. Blackberry completely lost the core of their leadership and creative structure. With the loss of so many top executives in such a little time, it was hard for Blackberry to maintain its level of efficiency.

The Blackberry 10

In order to try and get back in the market and deliver a total market iPhone killer, RIM began research and design of a whole new phone that would be called The Blackberry 10. But before designing the Blackberry 10, RIM had to figure out a strategy. They had to decide whether or not to start new with the Berry 10 or to work off of the old Java based applications. After almost a year of discussion RIM finally decided to start from scratch with the Blackberry 10. The problem with creating from scratch was that RIM had to bring in a whole new team for the

Blackberry 10 because the original designers were busy working on the blackberry 7.

Once again RIM failed to communicate with one another effectively and was being pulled in too many directions at once. Because the company was split, one former senior executive said, “To me, the most logical thing would have been to integrate the operating system organizations into one, Then you’d have a whole team, not 150 people sitting around saying, ‘I don’t know what I’m going to do next,’ and another 150 people saying ‘I’m over my head’”

(Sean Silcoff, 2013). Another division on the Blackberry 10 was whether or not to have an all touchscreen or keyboard phone. The original plan was for it to be a touchscreen phone, but some senior executives wanted to stick with the so-called “bread and butter” of BlackBerry. After more talk and postponement, RIM decided to continue the making of a touchscreen phone but released a keyboard version shortly after. By the time that the Blackberry 10 line of phones were released in January of 2013 many people believed that they were two years too late. Because of RIM’s slow response time and lack of unity, they allowed Apple to gain a huge share of the market.

CEO’s to CEO

In January of 2012, both co-CEOs and Mike Lazaridis resigned from their positions and are being replaced by the COO of RIM, . Even though Balsillie and

Lazaridis deny that the reason for their resignation is due to shareholder pressure, no one really believes them. However, both Balsillie and Lazaridis will stay on the board and retain a large amount of the RIM shares.

External Communication Failures

RIM faced a couple external communication failures throughout the life of the business.

There is one main failure in this category that we can see: lack of two-way communication. RIM failed to listen to what the consumers wanted and they failed to communicate when they experienced a problem.

Listen to Consumers:

RIM had a huge problem listening to consumers. Originally they focused only on the business sector as their target market, but they made a costly mistake in that. They didn’t realize that people would want mobile devices for personal rather than business use. It was pretty obvious to other businesses, such as Apple. They were prepared for this shift and thus they stole the market and gained much success. RIM on the other hand suffered a loss in sales and bad publicity.

Even after it was obvious that RIM needed to change their target market, they were slow and ineffective. Their mobile/personal devices consisted of poor technology and completely ignored the features consumers desired. They neglected that touch screens were gaining support, and they were too stubborn to get rid of their full keyboards to answer the consumers’ desires.

Apple released their first iPhone in 2007. They sold 6.1 million over 5 quarters. This phone was such a hit because of its touchscreen and consumer-friendly design. Steve Jobs was quoted to have said “The phone was not just a communication tool but a way of life” (Oliveira,

2013). Even though RIM saw the success of the iPhone, it took them almost 2 years to respond with their own touchscreen phone, the BlackBerry Storm 9500.

RIM also failed to include apps on their devices, which the iPhone did. Apps were gaining in popularity for several years, but RIM was too prideful to jump on with the fad. They chose to ignore adding them to their devices and as a result they lost even more customers. When they finally added apps to their devices, there were too few, and they were too poorly designed. It was also too late as the damage had already been done.

They could’ve prevented this by simply offering surveys or listening to their social media sites. People often post their complaints as to what a business is lacking on their social media sites. By simply reading those and listening to them, RIM could’ve been more prepared and given the consumers what they wanted.

Communicate Problems/Solutions:

RIM also had a problem with communicating with their customers when they did have a failure. They failed to offer timely updates and they failed to offer sincere apologies.

When a problem arose at RIM that affected the customers, RIM failed to notify them within in a timely manner. They pretty much ignored the failure until it was fixed. They then tried to buy the customers back by offering costly amounts of free apps. They didn’t realize that the people wanted to be respected rather than left in the dark.

When RIM was experiencing major network outages in October 2011, they were very closed off about it. A network failure occurred October 10, 2011 in Europe, the Middle East, and

Africa. Another outage occurred on the 11th, and on the 12th, an outage occurred in North

America. RIM’s phones were essentially useless during these outages. Although RIM has a

Facebook, Twitter, blog, YouTube channel, Flickr, etc., they failed to notify anyone of what was going on, and they failed to utilize their social media. For example, “Dear BlackBerry” became quite the Twitter topic filled with complaints. Tweets included:

"BlackBerry down again. Very poor communications from them about what the problem is. £Fail." 702JohnRobbie

"Maybe I'd like my phone more if it wasn't a stupid BlackBerry." Bombxleo

"It was nice of BlackBerry to honour Steve Jobs with two days of silence." Sickipediabot. (Posted the week after his passing).

Even though the customers were openly communicating with RIM, RIM failed to respond and offer that two-way communication needed to be successful. During this time RIM only posted 2 tweets in a matter of 3 days, hardly what’s necessary when your business is facing a crisis.

With some changes in management, RIM could’ve avoided these problems. For starters,

RIM could’ve made a press release immediately when they had a failure occur. Any large business should have a media or public relations team ready to release a statement almost immediately after any failure occurs within a company. A notification would have kept the customers happier, as they’d feel respected and the lines of communication would be more open.

A simple notification such as the following would have been sufficient:

“We are experiencing network outages on the Eastern U.S. Coast. We are currently unsure of the cause of the problem, but we’d like to assure our loyal customers that we are hard at work on getting your phone service up and running again. Thank you for your patience as we work out this problem.”

RIM was too prideful to admit they made mistakes. When they did finally offer apologies, they found scapegoats within the company to stand up and take the blame. For example, when David Yach had to explain a network failure, he was only the Chief Technology

Officer. He was not a CEO whom are typically expected to be at press releases. The CEOs were nowhere to be seen or heard and the people weren’t satisfied. Even after this the leaders took a few days to reply to the customers and release their apologies. However those apologies weren’t heartfelt and people noticed that. To view Mike Lazaridis’s apology, you can follow this link: http://www.youtube.com/watch?v=zQ1esvGae_s. It seemed as if Lazaridis was reading off a script and was only interested in making the apology because his team told him it was the best thing to do. This left them even worse off than before.

To fix this problem, RIM needed to rework their management. They also need to rebuild their corporate culture. Putting customers last is definitely not the way to be successful in a business, especially one built upon communication and dependent upon consumers. RIM should’ve had a media management team ready to go. It’s inevitable that every business will receive bad publicity at some point in its life, but how you handle it is what sets your business apart. RIM failed to come out on top and stronger after their failure so in the end it was even more damaging to the company. If RIM had been prepared with a media team and a plan, they could have come out on top. The team could have been ready to communicate with the consumers, starting with multiple press releases throughout the process and communicating through their social media. They should also have had the CEOs prepped and ready to give brief press releases. There’s no reason they couldn’t spend 5-10 minutes speaking to their customers, the essence of their business.

Where They Are Now?

Unfortunately,

Blackberry has not been able to sustain control of the market and is doing worse than ever before. In 2008, just after the release of the iPhone, Blackberry’s market share price was $144.56. In 2011, right about the time of their network outages, RIM market share price was less than $25.00. In 2012, RIM’s share price fell again to less than $10.00 a share. Blackberry failed to keep up with their competition as well as a highly demanding market, and they are now paying the price. In September of 2013 Blackberry was sold to a group of executives for $4.7 billion and is now privately owned.

Works Cited BlackBerry users vent frustrations on third day of service disruption. (2011, October 12). Retrieved December 4, 2013, from The Guardian: http://www.theguardian.com/technology/2011/oct/12/blackberry-service- disruption-third-day Geller, J. S. (2011, July 13). Inside RIM: An exclusive look at the rise and fall of the company that made smart. Retrieved December 4, 2013, from BGR: http://bgr.com/2011/07/13/rims-inside-story-an-exclusive-look-at- the-rise-and-fall-of-the-company-that-made-smartphones-smart/ Geller, J. S. (2013, November 4). The Boy Genius Report: The past four years of BlackBerry warning signs. Retrieved December 4, 2013, from BGR: http://bgr.com/2013/11/04/blackberry-sale-split-stock-analysis/ Hartopo, A. (2012, July 25). The Downfall and Demise of RIM. Retrieved December 4, 2013, from The Jakarta Globe: http://www.thejakartaglobe.com/archive/the-downfall-and-demise-of-rim/ Hicks, J. (2012, February 21). Research, no motion: How the BlackBerry CEOs lost an empire. Retrieved December 4, 2013, from The Verge: http://www.theverge.com/2012/2/21/2789676/rim-blackberry-mike- lazaridis-jim-balsillie-lost-empire Houpt, S. (2011, October 11). RIM's communications breakdown. Retrieved December 4, 2013, from The Globe and Mail: http://www.theglobeandmail.com/report-on-business/industry- news/marketing/rims-communications-breakdown/article557055/ Munoz, A. (2011, October 13). RIM’s Social Media Reputation Management Nightmare. Retrieved December 4, 2013, from Threat Blog: http://threatblog.org/protection-tips/rim%E2%80%99s-social-media- reputation-management-nightmare/ Oliveira, M. (2013, January 27). BlackBerry Failures That Cost RIM its Dominance. Retrieved December 4, 2013, from The Huffington Post: http://www.huffingtonpost.ca/2013/01/27/blackberry- failures_n_2561912.html Rim BlackBerry Device List. (2010, October 29). Retrieved December 4, 2013, from Know Your Mobile: http://www.knowyourmobile.com/blackberry/10940/rim-blackberry- device-list Sean Silcoff, J. M. (2013, September 27). Inside the fall of BlackBerry: How the inventor failed to adapt. Retrieved December 4, 2013, from The Globe and Mail: http://www.theglobeandmail.com/report-on-business/the- inside-story-of-why-blackberry-is-failing/article14563602/?page=all Segan, S. (2012, January 23). 5 Failures That Led to RIM's New CEO. Retrieved December 4, 2013, from PCMag: http://www.pcmag.com/article2/0,2817,2399208,00.asp