BlackBerry and the Hedgehog Concept

What do you get when you cross BlackBerry and a fox?

Anyone?

You get a declining market share, faltering stock price, and lack of focus in core business.
To those familiar with Jim Collins’ book Good to Great; Why Some Companies Make the Leap…and Others Don’t, you may recognize the fox reference and its contender, the hedgehog. Collins speaks of a famous essay by Isaiah Berlin about the fox that “pursues many ends at the same time and sees the world in all its complexity.” On the contrary, hedgehogs “simplify a complex world into a single organizing idea, a basic principle or concept that unifies and guides everything.”  The concept is explained with a fox that knows many things attempting to attack a hedgehog from all angles and by way of many strategies. The little hedgehog knows one thing and that one thing it does well; to roll up in a ball in defense to the attacks.  In the end “the hedgehog always wins.”

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 As this week’s read is Good to Great, I’ve thought about the application of the concepts in the book to a company that has been headlining the business news for the past few months. I’ve been attentive to BlackBerry because of its major downfall and the remnants that have the potential for a profitable turnaround. Back in its day, BlackBerry was at the top of the industry and one of the fastest growing companies in the world as told by Forbes magazine. BlackBerry had one simple concept and one focus; to manufacture and market wireless devices to the corporate and government customers. With the comfort of growth and booming sales came also complacency. BlackBerry, which was named Research in Motion at the time, made the mistake of failing to innovate and began to lag behind with its product offering. The growth was not sustainable once the iPhone was introduced in 2007 and the company began faltering.

Waking up from the fogginess of comfortable growth, BlackBerry responded in a way similar to the fox. The strategy to regain ground was to shift focus from what the company knew best (products catered to the corporate and government sectors) to the general consumer market. It added a new line of products that were now marketed to this market and nearly identical in design to the iPhone. BlackBerry was competent in marketing to the consumer, but not the best.  The strategy of the fox failed and the company was left with a stock price of just under seven dollars per share and millions in unsold inventory. 

With the recent change in leadership and rumors of a turnaround, there may very well be a hint of a comeback of the hedgehog. The new CEO of BlackBerry, John Chen, has made some executive decisions that are reinforcing BlackBerry’s original position. For one, Chen has decided to shift back to the principal focus of corporate and government customers. Furthermore, the company has decided to outsource design and production to Foxconn (oh, the irony) so that the organization can take more time to “wring value out of software and services business.” 

Profitable growth is a result of pruning away all that does not fit the Hedgehog concept.
In order to return once again to a thriving position in the market, BlackBerry must have the discipline to prune away all that does not fit what it does best in the world at. The decision to outsource to Foxconn may be those first steps. Truly finding that concept can take years but it is well worth the time and discipline. All jokes aside, there is potential for BlackBerry to once again be the hedgehog it was and focus on what it does best.

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