Deconstructing Failure
Deconstructing Failure

Deconstructing Failure

How the fall of BlackBerry teaches us to act with courage amid moral uncertainty.

December 16 th 2015
Losing the Signal
Losing the Signalby Jacquie McNish and Sean Silcoff. Flatiron Books, 2015.


A number of years ago, the New Yorker's Adam Gopnik penned an essay on literature and the proper framing of moral choice. In comparing J.R.R. Tolkien's work to modern morality tales like X-Men, Gopnik wrote, "Modernist ambiguity, or realist emotional ambivalence, is unknown to Tolkien—the good people are very good, the bad people very bad, and though occasionally a character may be tossed between good and evil, like Gollum, it is self-interest, rather than conscience, that makes him tip back and forth."

To this, Alan Jacobs, then professor of English at Wheaton, now distinguished professor of humanities at Baylor, retorted:

This flipside to the success story is a tale less commonly told, even if more common than the first.

Modern liberalism likes to think that all our problems are epistemological: we are afflicted by never knowing with sufficient clarity what we ought to do. Our fictions tend to reflect that assumption. Tolkien, not being a modern liberal, thought it more interesting to explore situations when people know what they need to know but may lack the strength of will to act on that knowledge. He might say, and with some justification, that contemporary literary fiction is not simplistic in regard to such problems but oblivious to them.

Uncertainty and Action. Courage and Clarity.

While such distinctions apply to moral choice, they relate equally as well to situations of strategic uncertainty, a context that often encapsulates a moral dimension. One case in point is the rise and fall of BlackBerry, a story captured by Jacquie McNish and Sean Silcoff in their book on the Canadian tech giant. Losing the Signal tells the story of Mike Lazaridis and Jim Balsillie and their founding of Research in Motion (RIM), the telecommunication company best known for their development of the BlackBerry phone. The book chronicles Lazaridis and Balsillie's work to oversee the company's rise from technology startup, to smartphone Goliath, to industry also-ran.

The first part of the book chronicles the company's rise to the top. It is a story that would play well among my students. Many of us grow glossy-eyed at the idea of building and scaling an industry-changing venture like Mark Zuckerberg or Elon Musk. We are empire builders, or so we like to think. The story is told well, filled with lessons on the search and hustle required to move something from idea to market.

The second part of the book chronicles RIM's fall. And oh what a fall! In 2009, RIM owned 50 percent of the smartphone market. Today that number is less than 1 percent. This flipside to the success story is a tale less commonly told, even if more common than the first. For BlackBerry, that story is a bloodbath. But if we look close enough, we can find several lessons in wisdom. Buried in the tale of BlackBerry is a story of how to best respond to uncertainty with courage, strategic or otherwise.

Learning from the Fall

So how might we understand the decline of BlackBerry? What particular choices led to the slaying of the Canadian giant, and what does it teach us about the relationship between courage and certainty in the moral drama of business?

Let's consider a number of causes hinted at throughout McNish and Silcoff's book:

  1. Questionable ethical choices—BlackBerry suffered significant reputation and financial losses from a series of strategically and ethically questionable choices. Their failure to disclose stock backdating and battles over intellectual property led to a significant financial burden and a corresponding drop in consumer confidence. That said, one of the interesting questions of the book is whether we would consider BlackBerry a "failure" if these ethical failings occurred without the corresponding fall of the firm. Likely not. Unfortunately, when we link "success" and "failure" too narrowly to financial performance, we obscure wider forms of "value" that business can create or destroy through their work.
  2. Overconfidence in buyer loyalty—The company's leaders never though a "CrackBerry" addict would ever want to shift over to a new product. The company that invented smartphone addiction was overly quick to assume that their clientele's well-publicized dependence was company specific rather than tied to the device more generally. In doing so, BlackBerry failed to anticipate the swiftness with which the Apple iPhone would take over the phone market. But then again, most of us did. Even Steve Jobs predicted a 1 percent capture of market in the first year, a number that jumped to 20 percent much quicker than nearly anyone thought possible. I know it didn't take long for my own craving for the blinking red to morph into a need for the comfort of an iPhone buzz.
  3. Misunderstanding shifts in consumer preference—In focusing on the importance of battery life, functionality, and reliability of email, engineers at BlackBerry failed to attend to the more emotive parts of choice related to design, aesthetic, and the importance of "cool." Right or wrong, we are creatures that desire more than function from our most intimate product relationships. And while the enterprise and international markets were slower to shift away from RIM products—different buying cycles and timing of competitive entry explain those differences—even these markets eventually moved their allegiances. BlackBerry's failure to understand the evolving needs and preferences of their core user played a significant role in their failure to design products with that customer in mind.
  4. Ineffective response to competition—In his theory of creative destruction, economist Joseph Schumpeter argues that competition drives the market toward better and more innovation performance. While this is clearly the case with the market as a whole, one wonders why competition did not have such a beneficial effect inside the firm. In the case of BlackBerry, however, competition with Apple and their innovative touchscreen led the firm to prioritize speed of response over quality. By cutting corners in their product development and quality assurance processes, the firm's race to catch their American rival led to several disastrous product releases.
  5. Declining innovation capability—Just as an athlete can grow out of shape and lose the power and speed that made them unique, so too can companies lose core capabilities. In moving from startup to established industry player, BlackBerry lost the urgency that led to their success from the start. But as noted in the discussion of competition above, even this story is complicated. On the one hand, the scrappiness and urgency of being a startup drove quality and capability development as they looked to dethrone the big players. On the other hand, later competition with Apple led to cutting corners and a drastically reduced product quality. Like light through a prism, our responses to competitive pressures can have significantly different results.
  6. Conflict at the top—Finally, one of the central narratives of the book is the conflict between the visions of the two CEOs. Lazaridis pushed hardware, and Balsillie pushed software and service by leveraging BBM—BlackBerry's popular messaging service. In the midst of uncertainty, different visions pointed to very different routes forward. A company divided against itself cannot stand, or so goes the story of the book.

With all those factors identified, one of the things the authors make clear is the complexity of this story. In other words, while each of these elements made up part of the story, none of them in and of themselves constituted all of it. And there lies the challenge of strategic decision-making. We live in complex systems with multiple conflicting causes, but we have to respond with clarity and conviction. This reality has significant implications for whether choice is really about uncertainty (Gopnik) or courage (Jacobs). More likely, our world is some complicated mix of the two.

...we often approach choice by simplifying the landscape of information to make it appear that there really is no choice.

Mining for Lessons on Choice and Courage

Ambiguity of choice, moral or otherwise, often stems not from a lack of information but from uncertainty about which information to weigh more heavily. Discerning what is and is not relevant is one of the central challenges of strategic leadership. While Jacobs is right to suggest that courage in light of moral certainty is an important problem to explore, I side with Gopnik that the moral challenge of knowing what to do often preempts the question of conviction and confidence. Taken together, the real challenge is how to act with courage in the midst of uncertainty.

Discerning how to act should start by knowing our interpretive tendencies. Given the psychological pain of decisions, and specifically the pain of choosing wrongly, we often approach choice by simplifying the landscape of information to make it appear that there really is no choice. We quickly decide what to discard and narrow our focus to only the most relevant information. While this is a functional way to make a decision, the challenge is that each of our respective filtering is not bias free but instead comes from our own conflicted desires, personal narratives, and respective searches for identity. Given how many of these factors function below the level of conscious awareness, we more often see what is behind our eyes than what is in front of them, a factor my therapist is quick to point out.

Think about these phenomena applied to the fracturing vision of the BlackBerry CEOs. Each man looked at the same information and concluded that drastically different things should be done. While this could be understood as merely two logical ways to interpret the same information, it is also a story of two men simultaneously working through their own stories, psychological biases, and emotional needs. Lazaridis saw things from a spiritual perspective; he often turned to his faith, hosting Bible studies and drawing from the writings of Mary Baker Eddy, the founder of Christian Science, and Emmet Fox, "the popular Depression-era New York minister who drew thousands to his church with sermons about the mystic powers people possess to transform lives of misery and despair" (p. 96). Balsillie was influenced more by the insights of renegade business leaders like George Soros and by his deep reading of Sun Tzu's The Art of War. Behind the eyes of each of these men ran a set of heuristics and biases that filtered what each saw as relevant. But lest we think Lazaridis's theological framings are more apt to appropriately reduce strategic uncertainty than Balsillie's application of The Art of War to business practices, we must remember that neither leader was able to use their philosophical or theological starting point to save the Canadian Goliath.

Much of the power of Losing the Signal comes from the weight of uncertainty you feel as reader, even though you know where the story goes. When reading, I found myself at times siding with Lazaridis, hoping for a future for BlackBerry in hardware—that the next BlackBerry device would be the iPhone killer or that the Playbook tablet would take down the iPad. At other points, I resonated with Balsillie and his vision of SMS 2.0 with BBM becoming a cross-device platform, something akin to what happened with WhatsApp and their eventual $17 billion acquisition by Facebook.

Through the power of McNish and Silcoff's storytelling, we step into the inherent moral drama of business. If Tolkien's interest was in "situations when people know what they need to know but may lack the strength of will to act on that knowledge," the story of Blackberry is in part how people form certainty amid ambiguity (the modern epistemological drama) and yet, in a mix of moral conviction and epistemic humility, still have to find the courage to act. Often we do not know, and yet we must act with courage anyway.

BlackBerry's fall from grace is a story we face constantly as individuals, whether we live in the technology world or not. Faced with uncertainty, we must muster courage. But rather than acknowledge complexity, we often try to find easy answers and faux simplicity. It is telling that the authors do not conclude their book by offering one specific suggestion on what RIM should have done differently. In fact, all they can do is compliment the leaders for building up enough cash to weather the storm. McNish and Silcoff do not provide any comfort to leaders who might be reading the book, concluding that, in innovation, "winners and losers can change places in an instant" (p. 250).

Mining for the leadership lessons in the rubble of BlackBerry means that we must pay attention to how two specific individuals responded to uncertainty. It also means turning the mirror back on ourselves to see how we might have easily acted the same way. Unable to muster real courage—the step forward into evident darkness—we puff out our chests and pretend the lights are on. Unable to discern clearly, we stand in place and let the choices be made for us instead. Perhaps the most important takeaway from the story of Blackberry is the importance of disciplining our desire to make the world simpler than it really is without forgetting how to act with conviction.

Peter Boumgarden
 
Peter Boumgarden

Peter Boumgarden, Ph.D. is a Professor of Practice of Strategy and Organizations at Washington University in St. Louis. Peter writes on issues of strategy and business as well as theology and culture, and you can find his work in publications such as Stanford Social Innovation Review, Strategic Management Journal, Christian Century, Harvard Divinity Bulletin, and the online edition of Harvard Business Review. Dr. Boumgarden consults with numerous for-profit and non-profit organizations and is currently working on projects on investment decisions in Silicon Valley and the historical design of the modern business school. When not pursuing academic or business ventures, Peter can often be found on the running trails being pulled around by his Hungarian Vizsla, Emerson.

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