How BlackBerry Lost Its Touch – Effective Risk Management Strategies Announced by Cynosure Risk Advisors LLC
CHICAGO December 17, 2013 – A mere ten years ago BlackBerry Ltd. launched a revolution in the mobile communications market. Today, BlackBerry’s meteoric rise and recent hard times serve as a cautionary tale for companies without sound market and project risk management strategies.
BlackBerry was the first to market with a portable e-mail reader to which it later added voice capabilities, thus creating the earliest version of the “smartphone.” BlackBerry reaped tremendous acclaim and market success and in 2009 Fortune named BlackBerry the world’s fastest growing company. Yet, by 2013 BlackBerry has become a minor player in the smartphone market. What has accounted for BlackBerry’s rapid decline in market share and why did the company’s reputation take such a drastic hit? This article examines the market and project risk failures BlackBerry suffered and how the lack of a cohesive risk management strategy helped to hasten its decline.
BlackBerry’s problems began in 2007 with the release of Apple’s iPhone. BlackBerry’s engineers disassembled the newly released iPhone and discovered a mini computer and music player stuffed inside Apple’s follow-up to its successful iPod. It was clear to BlackBerry that major design and engineering advancements were being made by other technology companies and it had serious competition for market share. However, instead of integrating new smartphone applications that were becoming commonplace while still manufacturing a device that appealed to its diehard base of business travelers, BlackBerry dug in its heels. BlackBerry’s refusal to react to changing consumer demands ultimately resulted in a market risk failure. Plummeting sales then resulted in pressure to quickly develop and bring a game-changer to the market.
However, in the rush to develop its new generation device, BlackBerry encountered a project risk failure. Significant changes in BlackBerry’s leadership between 2009 and 2012 did little to create a culture conducive to developing a game-changing device. In 2012, BlackBerry chose to abandon its renowned physical keyboard in favor of a touch screen device that was woefully unsuccessful as serious competition to the new market leaders.
BlackBerry’s market and project risk failures might have been mitigated by a few simple risk management strategies. According to Tracy A. Campbell, Founder of Cynosure Risk Advisors LLC, (CRA, www.cynosurerisk.com), “After BlackBerry’s market share began to decline in 2010, it still occupied a profitable niche in the mobile device market. Had it timely responded to earlier market shifts, BlackBerry would not have needed to attempt a wholesale redesign of its device and redefinition of its very identity.” The departure of key leadership also would not have impacted product development so greatly had there been a strategic plan in place to maintain accountability for design decisions and project deadlines.
BlackBerry was no doubt aware of its market and project issues, but did not have a comprehensive action plan to prevent those eventual risk failures. Consequently, the once dominant smartphone leader was swiftly dethroned – its reputation and identity becoming casualties of the unforgiving pace of the smartphone marketplace.
CRA’s business philosophy encourages its clients to create an aggressive and proactive risk management plan – before they need it. CRA specializes in helping companies control costs, operate more efficiently and steer clear of potentially catastrophic operational and financial risk failures.
CRA is a national consulting firm specializing in corporate risk management, insurance coverage and health care reform counseling. For more information visit www.cynosurerisk.com.
Shannon R. Strasser, J.D., M.B.A.
Senior Risk Management Consultant
Cynosure Risk Advisors LLC
- 17 Dec, 2013
- Posted by Tracy Campbell
- 0 Comments