MBA Europe

Have Businesses Learned A Lesson From The Blackberry Disaster?

Written by Kundan Bhaduri | MBA Europe | Thursday 13th October 2011 16:50:53 GMT

Do the recent server blackouts spell the end for Blackberry...?

What can Blackberry do to reassure its customers?

What can Blackberry do to reassure its customers?

Kundan Bhaduri is a lover of all things software and Internet. Over the past six years he has engineered software for Microsoft and delivered IT outsourcing services to a large European bank. He lives in London and is currently completing the International MBA at IE Business School in Spain.

Blackberry pays a tribute to Steve Jobs with 'three days of silence' by ingeniously triggering a major infrastructure collapse that has plunged RIM's smartphone users into darkness with little or no access to essential data services like mail, internet and messenger. This recent incident gives us an opportunity to reflect on the perils of a single-source strategy and its impact on business continuity and what could be done to resolve them.

The makers of the Blackberry smartphone, Research-In-Motion have shown us exactly how not to manage a disruption or communicate with the customer as part of their ongoing struggle to restore the blackberry service after a near-complete collapse left 3/4th of the world's blackberry smartphone consumers without access to emails, messenger and other essential data services. In fact, RIM and Blackberry have just provided us with a brilliant business case in contemporary business communication and operational strategy that raises key questions on resilience and reliability in service delivery. In today's highly connected and heavily opinionate world where customer delight/disdain travels at the speed of tweets, what lessons can we learn from the recent disaster? What if tomorrow's IT cloud service providers meet the same fate? What if you wake up one morning to find that your cloud-based corporate CRM /enterprise application no longer works? Does your business have what it takes to survive such catastrophic disruptions? This points us towards an interesting concept of developing high reliability organizations (HROs) that can withstand the harshest of disruptions to deliver a resilient operations model and supply chain network. Below are some suggestions that can help achieve this goal.

1. Diversify your suppliers: Depending on only one (or a very limited number of) supplier(s) may be troublesome, especially when the decision to go with that supplier was made primarily for cost reasons rather than strategic alignment and reliability. Instead, service providers and customers alike must choose an array of service alternatives and reduce the risk of total collapse – as was the case with RIM, which centrally processed all email and BBM messages.

2. Diversify your product and service range: For companies that are really good at "…this one thing...", it is even more important to diversify their offerings and provide a range of services that are complementary to each other, even at the risk of cannibalising their own sales. I remember my marketing professor here at IE once telling - "It is better to cannibalise yourself than have your competitor cannibalise you".

3. Perform regular quality checks and keep improvising quality standards: Although Quality Assurance and audits are part of the game in any services oriented firm, one can never over emphasize the importance of monitoring the trends in quality and take cues from the direction in which they are heading, rather than simply focusing on the myopic present state.

4. Perform safety drills and test fall-back strategies regularly: Everyone has a fall-back plan - yes everyone! The trouble is, when you need the plan to work the most, Murphy’s Law kicks in and the plan doesn’t work anymore. In order to prevent such a situation it is importantly to continuously evolve the fall-back strategy in your delivery model to ensure that you have the best in class mechanism and processes to deal with a calamity. Oh, one more thing on the same point - does anyone remember BP and the Gulf of Mexico saga? Apparently, when the news broke out, the BP disaster recovery team tried to contact an 'expert' who was dead some 10 years ago. Talk of an updated fall-back plan!

5. Empower people at all levels to blow the whistle at the first sight of impending peril: Have you ever noticed that at an airport even a petty janitor can report a suspicious activity or raise a bomb scare that can literally ground all flights and throw the entire air traffic into a tizzy? That's what empowering people at all levels means - When the guy closest to the ground sees the Tsunami coming, he must be in a position to get the right people involved before the waves hit the shore. RIM needs to ask itself: why didn’t the field engineers report the matter when they saw this disaster coming?

6. Develop redundancies and bench strength within the organization: We all know redundancies are necessary evils - in fact redundancies in the literal sense are quite synonymous to job losses. But in developing and managing a business strategy that can stand the test of 'normal accidents' (a supply chain theory that suggests that accidents and disruptions occur when organizations grow large and complex), providing for redundancies is of utmost importance. Imagine what RIM would have done if all its engineering staff and resource capacity would have been in full utilization during the crisis (or was it really the case, which has led to the situation worsening over 4 days now?).

7. Invest time and resources in a solid communication plan and continuously keep updating it: Communicating with the consumer and developing transparency in the dialogue is probably the single most important factor that will sail a company through troubled times like this. The single reason why customers get pissed off easily is because they think they are being given false assurances. Never underestimate customer intelligence – They make your business, and can destroy it at the first instance. Establishing trust with the
customer takes years, breaking it takes only one disruption clubbed with poor communication. RIM has not revealed the number of customers affected, saying only that many customers are impacted in a variety of ways. “Some see delays, some service interruption” said a recent press release. While the company has been saying that they know the root cause of the initial failure, they aren’t willing to share it. It remains to be seen whether BB loyalists will pardon RIM for first the disruption and then the high-handed arrogance?

The going has been tough for Blackberry in recent times, one can easily guess - In the wake of rising popularity of android devices and the glamour of the shiny iPhone, Blackberry's market share has been steadily eroding. A major infrastructure collapse that sends the entire BB user community writing hate messages on major social platforms doesn't help the company's cause in any way.

This disaster has given food for thought to both, the suppliers of technology services and products, and consumers of such services who depend on these services to run their business critical functions. I have mentioned here seven key steps that businesses could take to increase their resilience, improving their ability to foresee problems and have short lead times in resolving customer issues. Equally, the corporate consumers of enterprise services need to create their own fall back mechanisms to achieve their business goals, and ensure that their targets are not held at ransom to supplier inefficiencies.

An interesting case in point is from the point of view of the competitors - Apple in this case has responded brilliantly by immediately announcing the launch of the iMessenger service - a Blackberry Messenger equivalent for the iPhone that will take away perhaps one of the very few attractions left in owning a Blackberry, dealing a severe blow to the company's future prospects. It remains to be seen as to how blackberry loyalists react to the changing times, and whether a substantial number of these loyal consumers will defect to the competitor. I leave you with a funny take on Blackberry by the Canadian comedian Rick Mercer:

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Friday 14th October 2011, 11.34 (UTC)

Charlotte Davies

"It is better to cannibalise yourself than have your competitor cannibalise you" - I wont be forgetting that anytime soon!


Friday 14th October 2011, 11.45 (UTC)

Kundan Bhaduri

Makes sense, doesn't it - Infact, that's how Apple introduced the first generation iPhone (if you remember) - It knew that sales of its existing iPod and iPod Touch devices would take a hit because some of the consumers might upgrade to the iPhone. They cannibalised their own iPod business to grow the iPhone market - and see where that phone business is today.

I can think of so many similar examples!


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