Lessons in Leadership Learned from Blackberry
Investors, myself included, always tout the quality of the team as the main factor in their investment decision. A founding team combining sales experience with technical skills is attractive to many investors.
Perhaps one of the best founding teams in business was that of the Blackberry cofounders Mike Lazaridis and Jim Balsillie. Lazaridis was the technical wiz kid who could fix anything and had a futuristic vision for how communications would change. Balsillie was the brash sales guy who was relentless and fearless.
Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of Blackberry by Jacquie McNish and Sean Silcoff is the only in-depth analysis of the tremendous rise and stupendous falls of one of the biggest tech giants: Blackberry. On many lists of the best business books of 2015, including for the Financial Times, this is book is a must read.
Part of the appeal of the book for me was to read about the history that I lived through as an early adopter of Palm, Motorola and subsequently Blackberry. I was also an advisor to a Japanese cell phone maker when I worked at KPMG. Losing the Signal provided a fascinating look inside the company that shaped a whole new wave of communication. Many people still lament the loss of their Blackberries because it had unparalleled security and ease of use.
It's also a compelling story of how this Canadian-born company upended their much bigger competitors to be on top of the world. For a while.
However, it is the central story of Blackberry’s co-CEOs that makes Losing the Signal both compelling and a must read for anyone looking to avoid their mistakes.
Most people attribute the failure of Blackberry to its inability to innovate apace with the new smartphone industry, notably the iPhone. But Blackberry’s failure to innovate was actually a symptom of two major flaws at the core of the company: a lack of oversight and a lack of accountability. Blackberry’s problems stemmed from those shortcomings.
Indeed, a lack of oversight led to the destruction of one of the best partnerships in business and the ultimate collapse of Blackberry.
Blackberry had a weak Board of Directors that didn’t hold the CEOs accountable or provide meaningful pushback. More importantly, Blackberry had a weak senior staff beyond the CEOs. The CFO role was particularly weak. The lack of a strong CFO allowed the co-CEOs to issue backdated stock options to employees, and that was a clear SEC violation. For Lazaridis, the charges of wrongdoing from the SEC was a blow to his reputation from which he never personally recovered. For Balsillie, it was another in a series of questionable, unethical actions which are detailed further in the book. Without proper oversight, the stock option practice led to charges from the SEC and the destruction of trust between the co-CEOs. It’s an oversimplification here, but the breakdown in their relationship and inability to groom a strong management team led to the end of Blackberry’s ability to innovate.
Entrepreneurs should think about Blackberry when selecting a co-founder, board member, or executive team hire. Are you picking someone who will challenge you or appease you?