Mobile Nations' resident analyst Chris Umiastowski on why he thinks today's C-Level cuts could bode well for BlackBerry's future
Wow. John Chen sure moves fast. He was appointed interim CEO of BlackBerry recently, and we’re already seeing significant changes at the executive and board room level. The company has announced the departure of its CMO, COO and CFO along with the resignation of board member Roger Martin.
These changes are bittersweet. After the end of the Jim and Mike regime, the company’s C-level suite opened its arms to the CrackBerry community, which we think was helpful. We hope this doesn’t change. But we realize change had to happen, and I’m personally someone who welcomes today’s news.
The biggest reason I say this is because strong CEOs usually make big changes early on, and so far Chen strikes me as a strong CEO. If he’d sat around making only minor changes within the company how could we expect anything to be different?
Let’s go through the changes one by one.
First up we have Frank Boulben, former chief marketing officer. Most people I’ve spoken to don’t feel the company’s BB10 marketing activities were strong enough. And it’s possible that Boulben’s hands were tied in some ways. Perhaps there was a much bigger planned follow-up beyond the Super Bowl commercial, but it’s possible the company decided to hold back on spending in the face of overwhelming evidence of weak demand for devices given their current feature set and value proposition to consumers.
Still, I feel Boulben didn’t disrupt the company’s marketing problems nearly enough. Marketing is not just about commercials. In the words of Seth Godin, everything is marketing, and I’d really like to see someone who fully embraces this be given the next CMO title. It doesn’t take a lot of money to ensure that your customers have an easy way to see all the great new features that come in a major OS release, yet BlackBerry practically released these updates as if there was nothing worth talking about. As much as we appreciated Frank for understanding our mission at CrackBerry, were also looking forward to seeing what some fresh blood can do in this role.
Still, I feel Boulben didn’t disrupt the company’s marketing problems nearly enough. Marketing is not just about commercials
Next let’s discuss Kristian Tear, the company’s most recent chief operating officer. He inherited a complex business, and certainly didn’t have an easy job. That said, supply chain was something he was responsible for, and there is no dancing around the issue of a billion dollar write down on Z10 inventory. If there is someone likely to take the blame for this charge, it’s him. That said, we don’t know who really made the call to build such a huge volume of Z10 product. Perhaps Thorsten Heins was a big factor in this decision. We’ll likely never know. But it’s not surprising to see a COO transition following this kind of mistake. It’s also possible that Chen believes he needs a COO with more software experience. Remember that Chen did say he thinks the company needs a permanent CEO with more software experience, who why stop there? Why not make sure the entire C-level suite has the necessary experience?
What about Brian Bidulka, the company’s long-standing CFO? I’m only guessing here, but I think he probably made his own decision to step away from the company. If he’d been asked to step down I don’t think we’d see him stay on as a special advisor to the CEO, nor do I think his replacement would be a more junior executive from within Bidulka’s finance organization. Besides, while I saw room for improvement in the investor relations aspect of his job, I don’t think it was important to replace him right now.
But as long as Bidulka’s leaving, I would have preferred to see an outsider come into the CFO chair. In my opinion, the company’s best CFO was Dennis Kavelman, who had to step down due to a stock options backdating scandal many years ago. At that time, Bidulka was appointed Chief Accounting Officer, and he didn’t really participate in investor relations (IR). Most pros who know the story will agree that IR at BlackBerry went downhill after Kavelman left. That’s why I’d like to see the company bring in fresh blood, not promote from within. Anyone who worked in the current financial organization is, I think, less likely to deviate from the status quo too much.
That’s why I’d like to see the company bring in fresh blood, not promote from within
What about Roger Martin resigning from the board? Again, I welcome this change. Martin was brought onto the board by Jim Balsillie, in the aftermath of the stock option backdating scandal. In all likelihood, Balsillie hoped Martin would help rebuild the company’s credibility on governance issues. But today corporate governance is hardly at the top of the list of issues facing BlackBerry. Besides, this is the man who was quoted in the media as saying, in regards to a possible CEO transition, “So we’re supposed to hand it over to children, or morons from the outside who will destroy the company?” It doesn’t surprise me that John Chen wouldn’t take kindly to the idea of Martin thinking of him as a “moron from the outside”.
I don’t think you’ll find anyone arguing with the suggestion that BlackBerry’s board needs more bench strength in actually running a technology company.