Breakout

BlackBerry Jettisoning Executives as it Gropes for an Identity

Breakout

The problem with deploying Hail Mary turnaround strategies is two-fold. First, as the name implies, a large amount of luck if not divine intervention needs to come into play if such gambits are going to work. Second, there aren't a lot of alternatives left in the likely event of failure.

Such is the situation BlackBerry (BBRY) finds itself in today. When current CEO Thorsten Heins took the reins in January of 2012 one of his first moves was holding a meeting of all 14,000 employees. "I must have said somewhere at the end to inspire the people and get the message across 'Let's rock and roll this!'" Heins said in an interview with the website Crackberry.com. "Now I see this everywhere as their BlackBerry theme. 'Let's rock and roll this!'... I like that."

Eighteen months later, after several product delays and 5,000 lay-offs, BlackBerry is still rolling downhill and there is very little in the way of "rocking." The stock has lost 1/3 of its value in less than a month after its all-or-nothing wager on the release of two new smartphones. At a shareholder meeting earlier this week Heins conceded that the company "did not deliver what many analysts and investors expected in the short term... we're driving night and day to deliver improvements."

If Heins is able to engineer a turnaround he'll have to do so without at least three of its top executives. Richard Piasentin, head of U.S. sales, T.A. McCann VP of social networks, and Marc Gingras who oversaw the redesign of calendar and contact applications are all headed out the door. The moves smack of equal parts desperation and finger-pointing.

Yahoo! Finance tech reporter Aaron Pressman says BlackBerry's biggest problem was mistaking customers' nostalgia for demand. "The bullish theory was that there were still a lot of people clinging to their BlackBerry with keyboards and everybody was ignoring that market and there was still something left there," he says in the attached video. "Turns out what was left there was so small as to not make a difference."

By all appearances the smartphone world has passed BlackBerry by. Apple (AAPL) and companies using Google's (GOOG) Android OS boast hundreds of thousands of applications for everything from losing weight to throwing Angry Birds at pigs, not to mention productivity boosters. BlackBerry has little more than a keyboard and fond memories of days when the ability to send co-workers text messages was exciting and fresh.

BlackBerry shipped a mere 2.7 million units in their most recent quarter, which was 1 million fewer than estimates. Individuals and IT departments don't care to spend their money on software that felt dated before it even hit the shelves. "Why would a teenager or anybody who wants modern apps buy that phone at this point?" Pressman asks. The answer is they wouldn't.

Leaving the phone aside, should investors be tempted by the stock? Pressman says BlackBerry's back-up plan is to morph into licensing and perhaps integration of smartphones into autos. Heins also says BlackBerry is open to the idea of different strategic options; which is corporate-speak meaning the company wouldn't fight a potential acquirer at the right price.

Sadly, for Heins, shareholders, and the remaining BlackBerry employees the only thing that could make owning BlackBerry a compelling proposition is if the company creates a time machine it could use to deliver good products on schedule.

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