Further Thoughts On Why BlackBerry's Failure Could Be Your Failure Too

It's a year and a half now since I offered the view that RIM, the name we used to give to BlackBerry, was a busted flush in part because its new strategy was too narrow. Over the months that followed, the new CEO Thorsten Heins, made a really impressive attempt to make the company work. It didn't, so let's revisit the arguments.

The story around BlackBerry right now is that it was disrupted. I think we need to be clear it was not disrupted. It was out-competed and it failed to adapt to new strategic realities.

"Disruption" has a very clear meaning, yet we are applying it to every situation where an incumbent loses. Once you say disruption then you begin pigeonholing the experience - Kodak? Nokia? Steven Sinofsky wrote about it yesterday on LinkedIn:

Disruption happens when a new product comes along and changes the underlying assumptions of the incumbent, as we all know. Incumbent products and businesses respond by often downplaying the impact of a particular feature or offering.

Actually that definition needs tightening up. Disruption happens when a new technology comes along and challenges the underlying assumptions of an incumbent's technological advantage.

But Sinofsky also points out that disruptions in smartphones are manifold and broad ranging. After suggesting that many assumptions about what a phone should do were all challenged at the same time, Sinofsky says:

Even in the case of Blackberry there was a time window of perhaps 2 years to respond--is that really enough time to re-engineer everything about your product, company, and business?

Clearly not. But that brief sentence does not talk about disruption - it really alludes to a new business paradigm. BlackBerry was not disrupted. It failed to make the phase change to a new type of company.

That's why I've been writing about strategic options planning as an essential innovation strategy. BlackBerry never really tried to get a broader portfolio going and it is still stuck in the position of playing the hand it has been dealt rather than one it could have created. It never began to contemplate the types of adjacencies that today's incumbents are taking on - Intel into TV? McLaren, the Formula 1 champions, into child health monitoring? Companies are moving beyond the core to create new revenue streams and new synergies.

What BlackBerry did was try to improve its performance, improve its product and build a stronger ecosystem. These were all ways of developing the core business on - or trying to rescue it. Its options portfolio though needed to reach into new markets, with new products, not least because it had already been outcompeted not just by Apple but also by Samsung.

Part of the RIM response prior to launching the Z10 was a road show where Heins persuaded thousands of developers to invest in creating the apps that would make BlackBerry a contender in the smartphone sector it once dominated. Analysts also got to hear the story and by the time RIM/BlackBerry launched the new OS platform and new devices, it was poor form to suggest, once again, it would not work.

My feeling at the time of the Z10 launch was that the company was primed for a sale, and saying so here on Forbes I attracted some hostile remarks. The fact is though it was hard to see BlackBerry making it because it continued to have a very narrow range of options.

Strategic options management is the new core competency. You need a wide and growing range of competencies, in effect a fluid core, that allows you to seek new ways of acquiring or satisfying customers. This idea of the fluid core is growing in importance. This week I talked with people in Helsinki about plugging the gap left by Nokia. Their minds are full of fluid core strategies, spotting new opportunities, acquiring the competency to fulfill and then chasing down the markets.

It's because companies have been possessed by the idea of one unmoving core that they are beginning to fail big time - and sadly Nokia is one such example.

There is another clue about the catastrophic performances of Nokia and BlackBerry. Both entered a phase where they were unable to make decisions. Seems unbelievable but something as simple as decision paralysis plays a major part in companies' decline. They simply neglect to create new decision models.

My conversations in Helsinki convince me that this critical failure played a part in Nokia's demise. In the end they handed over the decision making to a CEO who had a very narrow view of the future - cut and ally with Microsoft. And Elop's saving grace? At least he made decisions.

Here is what I said 6 months ago. It still holds true as an interpretation of what went wrong, comparing RIM to its competitors:

Look around at the competition and you can see complex strategic options planning at work. They do not just have a smartphone, nor are they restricted to a smartphone and a tablet. They are in phones, computers, tablets, ads, infrastructure, services, content, and more.

This portfolio planning is the essence of innovation today. If you don’t have a couple of hundred options in the market, you are easy to pick off.

This was 18 months ago, when I narrowed the competition down to Apple, who had:

introduced a software-style upgrade cycle into hardware and are playing it like no device strategy I’ve seen to date – that’s especially the case with the iPad and the iPhone. But it would be no surprise  if there was a sudden announcement on a new TV initiative or a revamped iAds service or if Siri started appearing in all kinds of devices. They could lower their prices at will or they could choose a new premium price point for an upgrade. The point is these are multiple, credible options that the board can play around with, and make a move on depending on the circumstances.

To compete at this level companies need to make dozens of strategic decisions a month, hundreds, if not thousands, in a year. To create strategic options' portfolios you need new decision processes that push decision making closer to the edge where staffers interact with the corporate ecosystems. Many major companies hate doing that. But without new decision models you cannot create options.

I am currently studying the transformation of decision-making techniques in major corporations globally. If you have a view or want to be interviewed, and get access to the results, get in touch. I'll present some findings in November, in San Francisco and in Oxford, and possibly in Amsterdam.

My final thought on BlackBerry is that it was a failure of this options-based, devolved decision making that is every company's future. Even Apple's - the Tim Cook regime is a broad-based one where decision making is devolved. It is working.

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