Some thoughts on more executive departures

By Chris Umiastowski on 16 Dec 2013 04:43 pm EST

Last night WSJ reporter Will Connors published some BlackBerry scoop about two long standing executives who are leaving the company.  The first is Rick Costanzo, the company’s EVP of Global Sales.  The second is Chris Wormald, who played an active role in dozens of acquisitions by BlackBerry over the last decade.

What does it mean to have these two executives departing?  I’ll share some of my initial thoughts, but keep in mind we will probably know more once new CEO John Chen addresses the investment community later this week.  Until then we can at least have fun talking about it.

I’m not particularly surprised by these two departures.  Both executives seem to have a history of being effective in their jobs.  But BlackBerry is changing (dramatically) and it’s quite likely that Chen wants different skill sets in both roles.

Let’s look at Rick Costanzo, EVP of Global Sales.  He has massive history with the company. He’s represented tons of different geographic regions for BlackBerry, being the main connection between the handset maker and carrier.  People I know who know Costanzo speak quite highly of him.  So why would it be time for Costanzo to leave the company?  Chen has, through various comments, made it clear that he sees BlackBerry as a software company.  I think it’s arguable that the prior generation of sales professionals at the company grew up with a mindset of selling phones. I think it’s possible that Chen wants born-and-bred software sales executives running the company from now on.  That doesn’t mean they’re getting out of hardware by any means … but it would suggest the real value is in software, and Chen wants people who can sell that value.

On the M&A front, Chris Wormald has been helping BlackBerry buy companies for over a decade. He’s also been a key name at BlackBerry when it comes to all sorts of strategic alliances whether it be mapping license deals, voice recognition tools or something else.  That said, when the company decided it needed to do something big such as buy QNX Systems, these calls were not made by Wormald, and he may not have been as deeply involved with the enterprise software functionality compared to deals that were device centric or consumer feature centric. So if Chen is pushing hard on the enterprise software angle, it’s quite possible he’d want to see different skills in place.

What I’d like to see is who Chen hires. We can guess all day long about why he’s making certain decisions on staff reductions.  But the other half of the picture will be in place once we see the backgrounds of the new people he adds to the company.  

Also as a quick side note I know a lot of you have seen the headlines about the Bernstein analyst who forecast BlackBerry to have burned through $800 million in cash this quarter. I’m sure they burned through cash but I think this analyst’s number is too high. I’ll probably dig a bit deeper into this and come back with more.  Stay tuned.

Topics: BBRY Editorial

Reader comments

Some thoughts on more executive departures


"...keep in mind we will probably know more once new CEO John Chen addresses the investment community later this week."

Exit stage left.

Looks like anyone involved in the mess that was the BB10 launch (when US carriers apparently said they'd push the devices but then decided not to), is being cleared out.

Not surprising - they bet the company on BB10 then didn't bother to make sure they had signed contracts for sales at launch.

BlackBerry is still riddled with "old thinking" (just try registering for the new BES cloud and you'll see what I mean). John Chen has his work cut out bringing about change.

as it should be,,, if they, (suits), aren't part of the solution, then they gotta go,,, time for some fresh ideas & that comes from bringing in people that aren't part of the old guard...

In my best Charlie Murphy voice:

We gone call this game, shirts against the blouses!

Posted via CB10 with my  ‎BlackBerry Q10...SON!

Chen is restructuring the company. Save money and get the right people in the right positions. Cost saving through consolidation. I'm so far impressed with his ability to act quickly. I hope this makes BlackBerry a better company as well. Good luck Chen.

Yes but there is such a thing as cutting off your nose despite your face. Yes get rid of the ineffective people, but replacing your veteran staff just for change sake without even giving them a chance to show you what they can do in your new structure is questionable.

Posted via the Android CrackBerry App!

They aren't new. They have both been at their positions for a considerable amount of time. Those guys have showed what they can do for years. Chen just doesn't seem to need them. Quite frankly nobody is saying it's a great idea as nobody knows the outcome of these decisions. Not even Chen. The way it seems to me is these men lost their jobs for the same reason 4500 people will be looking for jobs in the coming months. It is unfortunate but sometimes one only needs to stir the pot.

He meant what they can do within your new structure. In other words, they can offer Chen skills within Chens new plan.

Focus eddy. Let's go.

But with that said, I'm sure he presented his new strategic plan...and I'm sure they didn't fit in it.

Posted via CB10

"Those guys have showed what they can do for years."

Or more to the point, what they can't do.

Like sell BlackBerrys to Verizon and AT&T.

Agree, after reading about these guys, they were some of the "rare" good ones! Hope he doesn't go to far.

I think you'll find the actual saying is cutting off your nose to spite your face. A more appropriate saying is that they've thrown out the baby with the bath water

He can't exit the handset market. Not unless he has a partner willing to use BlackBerry 10.

Otherwise the market for BES10 will evaporate.

The value of BES10 is it's security, and that's really only better than the rest when combined with BlackBerry 10 devices.

BlackBerry will always make devices (or at least have devices running BlackBerry 10) but probably only a few million a year for people concerned about security.

BES10 can be used cross platform, can it not?

And I truly believe BlackBerry will remain in the handset market for enterprise only.

BES 10 can be used cross platform. But if you're not supporting BlackBerry 10 devices why would you? There are other MDM competitors who have higher rankings in the Gartner analysis.

When you add BES10 with BlackBerry 10 devices you get a solution that is a quantum improvement over the competition.

Cleaning house is just the first step. Getting the right people in the right place is another challenge. Mr. Chen is working hard so far. Awesome.

Posted via CB10

I'm eager to look back from December 2014 and see what effect all these changes have. 2013 has been a roller coaster for BlackBerry, sure hope the pendulum starts to swing the other way!

BRON: a cron-like scheduler for BlackBerry 10 :

I have a feeling John Chen is ruthless as you don't fire valuable employees because they don't have software backgrounds. Maybe BlackBerry needs someone who is ruthless though.

Well, you do if the company is changing focus. And it may benefit them too, if someone else wants those skills.
We can't be good at everything.

Posted via CB10

ruthless is a good thing right now, imo,,, too many people are too comfortable there,,, if they know that the staus quo ain't cutting it, it may incentivize the people that stay & are brought it to be innovative & get sh*t done...

This attitude could also provide the incentive for quality people to leave! I've seen this script before.

They've gone because they're ineffective.

Unable to sell devices to US carriers.

Unable to find companies willing to partner with BlackBerry.

However good or decent these guys were, they were obviously infected with the old arrogance of BlackBerry (unwilling to accept new business models) and therefore have been cleared out.

There's a long way to go before the infection is cleared out if their BES10 cloud offering is an example of how they do business. Six emails and four terms of agreement docs to accept before I could get access - and that's not including screwing up my login session en route.

This doesn't mean that Rick Costanzo and Chris Wormald are not capable. Their positions are not in line with Mr. Chen's vision. That's all.

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What vision? Chen has only one vision I can think of reduce BlackBerry to a much smaller, but profitable enterprise software company that Silver Lake can acquire with confidence.

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The map license deal with TCS is killing BlackBerry 10. Hope this ends TCS and BlackBerry will have a better map and nav app, hopefully developed in house.

Although I doubt him leaving will impact the current agreement, You are quite right that the Maps in BB10 are terrible !! It's the one "feature" that leaves me wanting my 9900 back. I miss my BB traffic. It was amazing !!

Wow, I was actually thinking the same thing today. Maps on BB10 sucks. OS 7 Navigation was better, the feature I miss is it gave the option for different routes to my destination. It showed 3 routes to chose from.

Posted via CB10

Yes because navigation sells phones. Blackberry makes it in house and just gets the data.. Just like apple does..

If they are only focusing on software, what will happen to hardware devices like z10s and z30?

Add my channel pin:C0016E41D

I'm so looking forward to this week's results release. BlackBerry share price is already up slightly. Hopefully this is a good reflection of things to come.

You always have to feel for the guys and gals who lose their jobs when a company has to take serious actions to turn the ship around.

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Has the bottom been reached? The next quarter will be even more interesting than the last.

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I'm surprised that this is actually the first racist comment I've seen since Chen was hired. I figured these kinds of comments would be flying like hummingbirds.

Who cares, bring 'em on and hire them, if these are the guys that get sh...tuff done!

My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...

I wonder if the positions will be filled, or if they'll create new positions more in line with the skill sets Chen is looking for. I look forward to seeing what your detective work finds out about that cash burn. 800 mil is nothing to scoff at. Especially in that short of a window of time.

Posted while peeking and flowing on my incredible BBQ10!

Obviously, BlackBerry needs a turnaround. But, more over they need investors, customers, and employees to know that a turnaround is possible and likely. They can't do that when they hold onto all the old brass that failed.

I like BlackBerry as a company, but the bottom line is that the leadership didn't accomplish what they set out to do. There has to be accountability. It's not right for hundreds and thousands of people to loose their jobs and a few executives keep theirs.

There were decisions made that weren't the right decisions. They didn't pan out. Maybe they were stupid, foolish, the best that can be hoped for, or what but they weren't successful.

So, it's not right for them to keep their jobs when so many lost theirs.

Chris, I appreciate your view of things, but, I think you are basing your opinion on something that isn't fact. You seem to be under the impression that Chen fired these executives or asked them to step down; and that it's some sort of bold, strategic move implemented by the mighty Chen, to restructure the company.

But, perhaps the executives are jumping off a sinking ship. Maybe they have jobs lined up. I think we can all speculate what is happening, but we aren't sure if these executives left on their own or if it's part of the newly crowned mighty BB savior, Chen, strategy. Just like Thor, I think too much credit is being given to an unproven leader and PR spin, when in reality the opposite probably is happening and things are coming apart behind the scenes.

I somewhat agree with your comment, that we do not know if they left on their own or if they were asked to leave. However, I would disagree with your 'unproven leader' comment. Mr Chen is definitely proven in taking a company that is falling apart and loosing tons of cash, and turning them around to be a highly profitable company. Google him and you'll see his proven record.

You took what I said out of context. I was referring to Chen not yet being proven as the leader of Blackberry.

I was very aware of Mr. Chen's background before writing my comment and do not doubt Mr. Chen's abilities and accomplishments. But, it's too early to put him on a pedestal and give him credit for doing things, that as of right now, no one is sure what's going on behind the scenes. It's all speculation.

If you notice in my initial comment, I use such words as "maybe," and "perhaps," versus using conclusive wording and writing as though I am talking about something that is factual.

It's naive to think Chen didn't drive this. I've been around enough executive transitions to understand how this stuff works. New CEOs have different visions. Whether these guys were asked to leave or not is irrelevant. The departures are directly tied to Chen's appointment as CEO.

How do you KNOW that the departures are directly tied to Chen? I think it is "naive" NOT to think that SOME employees of a sinking company will want to seek more secure employment elsewhere for the sake of themselves and their families. There have been departures within Blackberry before Chen was brought in. So, how do you definitively tie the executives departures to Chen again vs. other possible factors?

It is "irrelevant" how many executive transitions you've been around in the past. It is arrogant to believe that every scenario and every person or company has to fit into your theory based on your analysis of the past, which may not be relevant and factual to the present circumstances.

You speak as though your word and truth is the absolute truth and everyone else is wrong, despite your missing proof or stating of facts, which IS relevant.

Chris great blog will stay tune on the cash post maybe a youtube class session you did last time, it was great !

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I like the focus on software. A lot of companies can put to a good hardware package if they make the effort but of the software side, that's another story. People really need to see the capabilities of the bb10/qnx system.

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I think they need both the software and hardware side of the business. It's just an alibi for the failed hardware which can be blamed for the very poor marketing.

I'm curious on how you compare this second transition of Blackberry compared to the last one? This all sounds very familiar to the switch going into BB10. Is it just a second go around with same odds of success, which failed the first time. Or is there really some reason to believe this will be different

Posted via the Android CrackBerry App!

BB has been out of touch with market needs; it desperately needs new blood.

There is a difficult sell to get back into the cell phone hardware market since Samsung is eating the market.

EXCEPT: for business purposes, ONLY BB has top security. So, the new managers must push that market for hardware. BYOD will purchases follow as users develop confidence in the re-awakening of BB.

The Stock Market has realized that management change is good - the stock has gone up at least one percent a day during the past week. (This is even after bad reviews by the Citibank analyst last week).

Well it can't be shocking the vp of global sales is leaving. "Coffee is for closers"- and BlackBerry isn't closing global sales! Put the coffee down and get the hell out.

Posted via CB10

Look, these are always personal decisions. Mr. Chen meets and talks with each candidate informally.

Based on his impressions - he was hired for his experience after all - and knowledge of his own plan, he makes a preliminary call.

The same thing is happening with the candidate who is being scrutinised. He's asking himself (herself) can I work with this guy? Do I have a future here?

Given a little time to digest the meeting each will come their individual conclusions. No one has the guarantee of being correct.

As we are several times removed, it is very difficult to see all the factors in play.

I appreciate Chris' interpretation as he seems closer to the players and is able to clearly put some of this into perspective.

Posted via CB10

"What does it mean to have these two executives departing? " - there are only four things why this kind of "departing" is happening... two of them are very common when restructuring management i.e. either they "resigned" or were "terminated"...

The other two were either they really departed not only from their job but on the face of this planet earth... or just simply retired...

And I guess, we don't have to be a rocket scientist to analyze their "departing"...

Posted via CB10

In many cases if the low level staff doesn't have a good performance, s/he will be likely let go. Why this doesn't happen on the executive members? The performance of the company didn't go well, actually very bad. Someone needs to take the prize. Frankly, I believe we have to change the way of selling products. The old way just simply doesn't work. We partnership'd with the carriers, but look Rogers didn't even want to stock Z30.

Posted via CB10

Thanks Chris. Interesting read. Chen has shown his leadership qualities early. Firm calculated decisions made with precision as he moves (full speed ahead). What BlackBerry needs most. Now it remains to be seen if Mr. Chen will find the right people to strengthen the fabric of his plan to keep BlackBerry (moving). I suspect we will find Mr. Chen leadership abilities shine most brightly on Dec 30. Hoping some new level of prosperity is not to far off for BlackBerry. As always, my best wishes to Mr Chen, and his gang.

Ruthless and very tough changes are the only options for BlackBerry. They have to almost become a startup again. For that reason the old guard almost has to go whether they are capable or not, just so fresh unbiased ideas can be implemented.

Posted via CB10

Unfortunately BlackBerry will show huge losses again this quarter. I really don't think they can stop the bleeding. There is no advertising and the media doesn't even mention them anymore. They are almost completely written off. It's the sad reality.

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New blood is needed to market this great product, the old executives made dubious decisions and they should go. How can a CMO not advertise and expect to get sales .how can they not penetrate USA When the President Barack Obama is using BlackBerry.

I strongly agree. BB last year has done a very poor job in Marketing execution, especially in the US. A very good example is the "Keep Moving" ads. You don't need to have a PhD to know that you need either Sex or Humor ads for it to work in the US.

Except Apple and Samsung use neither, and are eating everyone's lunch. How about they just show us what the phone can do? That seems to work well for the two entities I mentioned above.

Out with the old and in with the new... they are all over paid anyway. in all companies. Let's hope who ever replaces them and get things rocking.

The only thing we know is that we have no idea what Mr Chen is up to. Until we hear his plan, it's all just a bunch of guesses that could be way off course. I hope the best for BlackBerry and look forward to a dramatic plan by Mr Chen this week. Even that is up in the air.

Posted via CB10

I for one would like to NOT see BlackBerry handset numbers each ER, as this seems to be the driving factor that is dictating the low SP pace.
Instead, I want to see more details relating to partnerships, engagements of all kinds, QNX, TAT technology advancements, etc.

Keep chopping ass! There's a lot of work to do yet (especially at the top), and development is probably the least of the problems. I'm certainly not as optimistic as I once was, however I'd like nothing more than to see BlackBerry return to at least partial glory. There is room for a distinctive third option in the market, even if it's BlackBerry software on an alternate handset.

Sent from the future on my Z10

Go direction calls for new people...BlackBerry has the software foundation and security...make it happen...BlackBerry Rocks

Posted via CB10

Globe and Mail.......

On Monday, the Waterloo, Ont. smartphone maker confirmed that Rick Costanzo, executive vice-president of global sales, and Chris Wormald, vice- president of strategic alliances, have decided to leave the company. Both are believed to have left on their own volition after finding jobs elsewhere.

Irrelevant who decided what. Chen's strategy differs, and I'm sure Costanzo and Wormald, being smart guys, could have figured out for themselves what the best move would be for themselves.

I can see why he is doing this. Speaking with lots of carriers executives in Europe all of them agree to the same: BlackBerry executives were very arrogant and not helpful. Even compared to the Apple people. In continental Europe there was no actual BB10 launch! If BlackBerry wants to be a premium business tool there is no other place to advertise than airports and train stations. I think non one bothered to lay down a global sales strategy and marketing for BB10 and this was too bad for the company. Let's hope than this will change and we will see a more focused and sales oriented company like Samsung.

Posted via CB10

I'll commend Chen for trying to build a sales infrastructure that is less dependent on carrier relationships... if that's what he's trying to do. He's been completely non-transparent about his vision or turnaround plan. However, I probably would have knocked him if he had jumped out prematurely with some media-tested plan.

Posted via CB10

Exactly like rats abandoning a sinking ship. I hope they have something in mind to get out of this rut because they are bring left behind more and more. I saw the Samsung galaxy note 3 and it made me realize more the things I miss out on. Lets at least hope for the updated operating system someday soon.

"BlackBerry, Keep Waiting"

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BlackBerry need to be a software company all the other major players are. The question is what we're they before?

Posted from the most powerful smartphone,z10

why are you so sure they had to leave? Couldn't they just wanted to leave because - let's face it - the future for Blackberry doesn't look very bright?

Prem was probably astonished when he joined the Board,he added to his position and became the head Honcho,doing so he felt a need to clean up shop and move BB to where we are now, a new mindset,I expect some surprises during ER, and man it's going to be exciting. Chen ,with his reputation is really encouraging going forward.

Let's face it... BlackBerry is a dying company. Departures such as these are just a symptom. Expect many more departures of talented and successful people. It's terrible. A slow death. It's too bad!

I'm very happy with my BlackBerry Z10; it's the best smartphone in the market. Next time there is not going to be a BlackBerry to upgrade to. So sad!

Posted via CB10

I would argue that getting rid of all of these people is Chen's way of signalling to Wall St. that the old guard who let BlackBerry slide to where it is are all gone and that Wall St. can not longer point to that as an excuse to doubt the future of the company or beat down the stock. They now have to judge BlackBerry on what it does now and going forward (I hate that expression).
It has been too easy for BlackBerry haters to say that the same management is there and so it cannot turn itself around.
Now there is new management.

John Chen is taking radical, but necessary decisions. His clear-cut vision is admirable, definitely in these hard economic times.

C0038297E Quote of the Day (BBM Channel)

Blackberry can make if Mr Chen is serious the future can be awesome with a little luck and hard work.