Thursday, May 23, 2024

HP vs. BlackBerry and the Power of a Passionate Evangelist CEO in a Turnaround

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As I write this, BlackBerry’s shares are spiking, largely because of the talk from BlackBerry’s CEO with regard to BlackBerry’s future.

I’ve been through and followed a number of turnaround efforts over the years. Since we currently have two high profile companies still in the early phases of a turnaround (HP and BlackBerry), I think it interesting to compare the two efforts.

Because a turnaround takes between five to seven years to be successful, the first phases of a turnaround are mostly about belief. HP has been plagued with so many CEO changes that it seems to be in a never-ending turnaround cycle. It has far more complex problems then BlackBerry.

On the other hand, the corporate buying model that founded BlackBerry has all but been destroyed by Apple and Samsung, creating a similar degree of difficulty for BlackBerry.

Both CEOs—HP’s Meg Whitman and BlackBerry’s Thorsten Heins—have to create the impression that their companies can be turned around long before they can demonstrate the reality. HP is run by an ex-politician, who should be better than at this than Heins, she isn’t. This isn’t a skill issue, it is an execution issue. Let me explain.

BlackBerry vs. HP: The Fundamentals

As noted above, HP is the more difficult company to turn around. It has a very complex product base, it has units that don’t align well with others, and it has a long history of executive siloes. The Mark Hurd years, which placed each executive and employee in competition with every other executive and employee, made HP into a very challenging environment.

Having said that, Whitman has made significant progress, largely with the help of a very talented and strategic HR head. But the vision with regard to what HP will become, other than repaired, is lacking, and HP doesn’t have a defined, loyal customer base.

BlackBerry has one of the tech industry’s most loyal customer bases (after Apple) and represents a comparatively cohesive company. Heins’s very different problem is to get the carriers and business customers to once again champion his products and to move what is a very different offering into a market dominated by Apple and Samsung. Unlike HP’s Whitman, he doesn’t need to fix the inside of the company, he needs to find a way either to fix the world BlackBerry exists in, or to change BlackBerry to better match the world that is. We’ve seen Microsoft—with far greater resources—largely fail to succeed on the latter path, which suggests the former, while also very uncertain, may be the more successful.

To net this out, you could argue that Whitman has too many options and Heins too few. But both CEOs are playing the hand they are dealt rather well with one exception.

BlackBerry vs. HP: Vision, Passion and Promoting Women

Here is the strange thing, at least for me. During the California primary election, folks raved about Whitman’s talks as if they were given by a leading religious figure. They walked out and spoke of her oratory skills in hushed and amazed tones. Heins, and most other CEOs, shouldn’t therefore be in her league.

However, in the general election, she faltered. And then when given what should have been a huge asset, turned it into a massive disadvantage, costing her the election. When she speaks for HP, you just don’t see the fire, almost as if she is holding back because, having lost big once, she doesn’t want to put herself out there and risk losing again.

Heins doesn’t have Whitman’s skill set; he doesn’t even speak English as his first language. But he is fire and brimstone against Whitman’s milk toast. He fires up the audience and does a pretty decent job of channeling Steve Jobs, even though his skills aren’t at the same level. Being at BlackBerry Live earlier this year reminded me more of a Jobs Apple event then a Cook Apple event does. He is a believer, and he is preaching the BlackBerry Gospel. I half expect that if you cut him. he’d bleed BlackBerry juice. Even his use of Alicia Keys shows signs of stagecraft brilliance and an ability to play above most tech CEOs in this regard. She is positioned as the women’s advocate for the company, and she clearly also has passion for the role.

As a side note, I find it fascinating that companies like BlackBerry and Dell, which are run by men, are more aggressively supporting the elevation of the profiles of professional women than companies like HP and Yahoo, which are run by women. My speculation is that this may have to do with the women CMOs at these companies or the fact that women CEOs have advanced by holding down their peers and thus are predisposed against promoting them. Something interesting to noodle on.

Wrapping Up

On paper, Whitman has more experience and better CEO skills than Heins, but Heins is pushing himself out of his comfort zone and giving the job his all. Whitman is being more measured, and I think it is because of her political loss in California. It hurt so much she doesn’t want to put herself out there like that again. Having never been there myself, I can’t blame her.

In the end, it is not only a ton more fun to work for someone who has passion and believes, the result is more assured, everything else being equal. If there is any chance that BlackBerry can be turned around, there is no doubt Heins will do it. If Whitman stepped up to the same level of passion and commitment, it could give Oracle’s Larry Ellison real cause for concern. I’d pay good money to see that; I’ll bet there are a ton of others who would as well.

Leaders with passion can often accomplish the impossible, and successful turnarounds are pretty darn close to impossible.

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