Blackberry: a technology-led vs. marketing-led business

There are many theories and floating around about Blackberry and why it continues to struggle. From where I sit, it isn’t very complicated. The reason this company started to flounder and is now collapsing can be directly traced to how the organization is driven.

In the world of technology, product developers (the technology team) drive the business. Their focus is on coming up with new gadgets, new functions and new software Everything new is coming out of the lab. Once something is deemed ready to launch, the organization turns to the marketing department and sales to figure out how to sell. Marketing serves as a support function with the tech or R&D department driving new product timelines and product specs.

Conversely, in the world of consumer packaged goods, (think soaps, shampoos, cleaning products, margarine, yoghurt, chocolate bars, soft drinks), at companies like Nestlé, Kraft or P&G, marketing is not a support function but the lead business driver. Marketing’s role is to understand the needs of consumers, identify opportunities or challenges, and spot trends in the marketplace all of which that might lead to a new product or changes to existing products. Based on these consumer insights, a new product is initiated by marketing and not by R&D.

Blackberry’s approach as an R&D-led organization worked very well in the early days of smart phones. Their technology such as the secure server (enough to help them land key US government security certification in 2010) and keyboard were critical factors in establishing clear leadership in the market as others have noted which was at the time, mostly business/finance and government people.  A history that is well known in the industry.

However, Apple’s iPhone, Android and others changed the entire category by creating products that were user friendly and appealed to a mass market. A strictly technology-driven business no longer made sense when the entire smart phone market changed, grew and became significantly more competitive.

Blackberry could have stemmed losses and foreseen opportunities had the organization followed a consumer-led, marketing-driven structure. A properly funded and empowered marketing department would have called out the trends, and foreseen the need to segment users and diversify offerings ahead of time.

By continuing to operate in a purely tech driven model, Blackberry failed to adapt to the changed market and ignored consumer needs. It took an inordinately long time for Blackberry to get a touch screen product or a touch screen and full keyboard combined to market. While the Blackberry marketers did their best to ensure launches were geared to a mass market, the actual products were lacking what these new consumers were looking for, such as apps. New products consistently lagged behind the competitors, and disappointed consumers upon launch because they were not designed to meet their needs.

The impact was felt throughout the organization as sales and profits continued to decline, and the success of launches continued to be overestimated such as the Z10 launch resulting in a vicious cycle of missed profit forecasts and declining stock price which has been discussed by multiple media sources including Forbes,  CNBC and :Rethink Wireless.  Blackberry continues to fail because it lacks fundamental consumer insights. It does not focus on, and therefore does not build its business on understanding, and satisfying, consumer needs.

If Blackberry really wants to turn things around, they need shift their business model from one that is driven by technological advances alone. They need to tap in to consumers by leveraging the full power of marketing beyond a sale support tool. It’s time to reorganize and shift business ownership to a model that leverages consumer-focused marketers.