BlackBerry had its annual analyst summit this month where it showcased both how the company is adapting to the changing and increasingly AI-driven world and how it continues to struggle to separate itself from its roots. This last is like the problem IBM had when it sold its PC Company to Lenovo, but, in a way, it’s worse because, in that case, IBM retained its identity while BlackBerry has clearly changed from the smartphone-founding company it once was to the software company it has become which has almost nothing to do with smartphones.
The missing ingredient for both changes was the extremely high requirement to communicate to existing and potential customers the nature of the changes and to make up for the loss of visibility, something I think both companies took for granted.
Let’s talk about why BlackBerry is struggling even more than IBM did and how it seems to be fixing that identity problem.
IBM’s PC Company. Unintended consequences
I first saw this with IBM when it sold the PC Company which was painfully timed. I say “painfully” because, just prior to the sale, Sam Palmisano, IBM’s then-CEO, had dismantled the marketing organization that Louis Gerstner, his predecessor, had created to revitalize IBM’s image and brand. That marketing organization would have been critical to making sure that losing the IBM PC company didn’t reduce IBM’s visibility in the market.
Throughout much of IBM’s history, IBM’s brand was in front of huge numbers of people in the form of IBM Selectric typewriters, printers, terminals, and PCs. But by the time the PC Company was spun out, the only products most people saw were the desktop and laptop PCs. So, when that went to Lenovo, Lenovo effectively replaced IBM in the minds of those users, and Think, IBM’s historic tagline, shifted to Lenovo and put that company on the enterprise map.
In short, because of its impact on both Lenovo and IBM brands, the PC Company had value to both companies that wasn’t captured by the price. It reduced the need for brand marketing for any company that owned it because, through the desktop products, it put that brand in front of massive numbers of people and helped to keep IBM relevant. So, losing both the PC Company and the unique and massively powerful marketing organization did long-term damage to the firm’s brand and visibility.
BlackBerry’s problem was far worse because, unlike IBM which largely remained the same company it was, BlackBerry changed from being a smartphone company (like Apple) to a software company with an emphasis on security. This created an image and marketing mess because BlackBerry, prior to this change, was failing so it had a dual image problem. It both needs to overcome the image of a failing company and its smartphone roots.
Over the nearly two decades that BlackBerry has been undergoing this change, it has made massive changes to its product lines, purchased companies like Cylance that put it on the cutting edge of intelligent security solutions, created products like AtHoc that help assure employee safety, and moved aggressively into automotive with the leading automotive OS (QNX) and tools like Jarvis that help curate and assure automotive software.
Still, BlackBerry’s held back by a lack of image marketing that conveys these changes and capabilities to the market.
Marketing to the rescue
One of the things that’s different this year is that the company presented at its summit is that BlackBerry is significantly upping its marketing and may, therefore, be able to communicate who it is now and get far stronger consideration for its products. At the same time, it’s simplifying its product sets around solutions that should make marketing and selling these sets easier.
In short, BlackBerry is finally funding marketing which should help it address the identity issues that it has had and help make up for the loss of visibility that occurred when it left the smartphone segment. By the way, it is somewhat ironic that Lenovo is now moving into BlackBerry’s old space with the Think Phone. I can’t help but wonder what would have happened had Lenovo bought BlackBerry as it intended to do (the deal was blocked) prior to buying Motorola.
BlackBerry is a cautionary tale of what can happen if you don’t understand how and when to use marketing to overcome image problems. Louis Gerstner, for all his faults (he didn’t know tech), understood marketing and used that skill to save IBM from going under. But that marketing capability is rare in tech, and its rarity makes pivots like the one BlackBerry underwent far more difficult than otherwise would be the case.
Finally, it looks like BlackBerry understands the need to market who it is and what it can do. If it continues to build on these marketing efforts, it should be able to finally get a revenue stream that is consistent with its powerful and incredibly timely product set.
The lesson from both the BlackBerry and IBM events is that understanding how your company markets and how to market is a critical skill that is too often overlooked. It leads to massive mistakes and the inability to get credit for the work your firm is doing in the form of revenue.
It is sad how many companies seem to learn this lesson the hard way.