BlackBerry chief vows to rebuild empire

John Chen is ready to prove the sceptics wrong with his plans to turn around the smartphone maker and build a sustainable business

PUBLISHED : Tuesday, 05 November, 2013, 1:08pm
UPDATED : Wednesday, 06 November, 2013, 1:54am

John Chen, the man charged with breathing life into struggling BlackBerry, says he has no intention of killing the money-losing BlackBerry handset as he looks to turn around the smartphone maker.

“I know we have enough ingredients to build a long-term sustainable business,” Chen said in a telephone interview. “I have done this before and seen the same movie before.”

Where Chen did it before, most famously, was as chief executive of Sybase, a maker of computer database software that was losing money and in crisis after having to restate its results as he took the helm in 1998.

Sybase then was in a position similar to BlackBerry’s now: it had very little credibility with Wall Street, posting a 1998 operating loss of $98 million. In 2010 he sold it to German software giant SAP for US$5.8 billion.

Chen, an energetic 58-year-old Hong Kong native who immigrated to the United States in 1973, was named executive chairman and interim chief executive of Blackberry on Monday as the company unexpectedly abandoned a plan to sell itself.

I have done this before and seen the same movie before
John Chen

In the interview, he vowed to rebuild the Canadian firm’s once booming handset business, sales of which have plummeted as consumers, corporations and even government agencies, once its most loyal customers, have switched to devices running on Google’s Android and Apple’s iOS operating systems.

The company has not disclosed how long Chen has been working with BlackBerry.

He declined to provide much detail about his strategy for reviving the company, but Chen, who sits on the boards of Walt Disney and Wells Fargo, estimated the turnaround will take about six quarters.

He also said his work at BlackBerry will “have nothing to do” with his role at private equity firm Silver Lake, where he serves as a senior adviser.

Early plans include meeting with government customers as well as those in the financial and telecommunications sectors in North America and Europe in an effort to “stabilise” those relationships. He also vowed to bring in new executives.

Chen has his work cut out for him in terms of customers as well as investors. The stock plunged 16 per cent in Nasdaq trade on Monday on disappointment that the company would not be sold and on doubts that Chen can deliver.

In January last year, when departing chief executive Thorsten Heins was brought in to run BlackBerry, he made promises that were similar to the ones Chen made on Monday.

At Sybase, Chen slashed expenses and began focusing on pursuing niche segments of the database market rather than competing with bigger software makers Oracle and IBM across all segments of the mammoth industry. The company returned to profitability within a year.

Everybody was saying ‘Why should I stay with you? Why shouldn’t I leave right away?’ He answered the tough questions one by one
Sybase executive Willie Jow

He gradually won over customers who were considering switching to other software providers because they feared Sybase might not be in business much longer.

“The first thing he did coming on board was to gain trust with customers and calm them down,” said Willie Jow, a friend of Chen’s and long-time Sybase executive who remained with the company after it was sold to SAP.

“Everybody was saying ‘Why should I stay with you? Why shouldn’t I leave right away?’ He answered the tough questions one by one.”

Chen is known to be a straight shooter who does not have patience for finger-pointing or complaining about something without suggesting what he feels is a legitimate proposal for fixing it.

One former employee says that Chen got riled up when a manager suggested changing the name of a product to boost lacklustre sales. Chen responded by asking if it would also make sense to change the names of your children if they got bad grades in school.

Chen, who came to the United States at age 17 to study at a boarding school, says he is not daunted by the scepticism about BlackBerry’s ability to bounce back from its myriad problems.

“There is a lot to do,” he said in the interview. “There are a lot of challenges, or otherwise I would not be interested.”