November 4, 2013 11:40 am

New BlackBerry CEO John Chen has connections, know-how

Thorsten Heins is out at BlackBerry, leaving in his wake a failed plan to restore the company’s position in the smartphone market and now, a failed sale to salvage the business.

In his place comes John Chen, an external hire who it appears has been hastily appointed as executive chairman of Waterloo-based BlackBerry’s board or directors as well its interim chief executive.

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So who is the new head at BlackBerry, still one of Canada’s most recognizable brands and companies?

Read more: New iPhone, old problems for BlackBerry

Chen, who was born in Hong Kong and educated as an engineer in the United States, looks uniquely suited for the job from several angles.

The 57-year-old holds a track record of turning around a large tech firm through the development of innovative mobile technologies.

He also possesses significant corporate and governmental connections, both in the United States and Asia — relationships that could be more than useful in any turnaround plan that relies on BlackBerry refocusing on its core user base.

John Chen, seen here in 2010.

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BlackBerry’s new chief served on former U.S. President George W. Bush’s export council, and has been named by Forbes magazine as one of the “Top 25” Chinese-Americans in business.

In 1998, the executive took the helm at U.S. database and networking firm Sybase, which had been bleeding losses for years before Chen was appointed to the top job. Under his watch, Sybase regained business lost to rivals like Oracle, IBM and Microsoft.

BLACKBERRY SLIPS AS R&D LEADER

As the country’s biggest technology development firm, BlackBerry Ltd.,  spends more than any other Canadian company on research.

Or rather, it did. As the smartphone maker’s fortunes have withered, so too has the amount it spends to keep its products competitive in a crowded global market place.

On the same day as BlackBerry said it was scrapping a plan to sell itself and had axed its CEO, a new report shows the company has slipped to No.2 on the list of Canada’s biggest spenders on R&D.

Bombardier, Quebec’s plane, train and subway system builder, has overtaken Waterloo, Ont.-based BlackBerry in that category for the first time, as it plowed 42 per cent more money into development in 2012 compared to 2011, or $1.9 billion, according to a report from Research Infosource Inc.

That figure compares to $1.5 billion spent by BlackBerry last year, down 2.2 percent from 2011 when the device maker was facing delay after delay in readying its new BB10 software and device lineup.

The Hong Kong expat also shifted the company’s focus to wireless technologies, a move that would catalyze Sybase’s revival and ultimately pave the way for its sale to German software giant SAP for $5.8 billion three years ago.

In a statement released Monday, Chen sounded confident he could reenact a similar narrative at BlackBerry, though he stressed caution.

“BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success,” Chen said.

Chen’s deep corporate ties will almost certainly be looked to by BlackBerry as it attempts to stabilize and secure loyalty from its millions of core business and government customers and win new business with them.

He has been a board member at U.S bank Wells Fargo as well as at Walt Disney Co.

He remained at SAP until last year when he departed to join private equity firm Silver Lake, where he evaluated “potential new investments and drove operational improvements” at businesses the fund invested in, a Businessweek bio reads.

One file he is reported to have worked closely on is the privatization of embattled computer maker Dell Inc. this year — raising questions about potential partnerships that might occur with his new company.

Chen joins a company that’s in arguably far worse shape than anything he’s encountered, experts say, with deep jobs cuts across key businesses being implementing now amid collapsing sales for BlackBerry’s primary product lines.

“This is John’s background. They’re getting someone in with a history of restructuring and to keep the business churning,” John Pliniussen, business and marketing professor at Queen’s University said.

Pliniussen believes that despite BlackBerry’s inability to attract a buyer ahead of a deadline that expired Monday, the company will ultimately find several in the form of a breakup.

“I believe the company will be sold, there will be divestments,” the academic said, adding that Chen’s main responsibility is to “keep the doors open for other possible bids.”

Read more: BlackBerry parts ripe for higher offers, some say 

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