Hey folks, welcome back to The Leader Show with Lou Carter. Today, we have the privilege of hosting John Chen, the CEO of BlackBerry. Appointed in late 2013, John masterfully steered BlackBerry through an impressive resurgence, bolstering its financial stability and solidifying its enduring relevance in the market.
He skillfully pivoted the company’s focus from consumer hardware towards the enterprise software sector, charting a fresh path for BlackBerry. Currently, the company thrives on emerging opportunities within the Internet of Things (IoT) and Cybersecurity domains, carving a niche by ingeniously merging these two rapidly evolving markets.
John has garnered recognition as a distinguished business leader and has an impeccable record as an executive adept at business turnarounds. His experience spans over four decades, encompassing both engineering and management roles.
Before embarking on his transformative journey with BlackBerry, John held the dual roles of Chairman and CEO at Sybase Inc. Under his watchful leadership, he ingeniously reinvented the company, achieving a remarkable streak of 55 profitable quarters over his 15-year tenure.
Now, without further ado, let’s find out what makes BlackBerry a Most Loved Workplace®.
For John Chen, to create a culture that employees love, the leadership has to have a clear vision of the culture they wish to establish, communicate this effectively, and stay consistent with it.
Building a culture goes beyond mere statements on paper and requires tangible action reflecting the proclaimed values. Furthermore, creating a culture is similar to defining a person’s character; it’s not something that can be easily altered based on feedback or reconsideration. If honesty is a part of the culture, for instance, it shouldn’t be compromised.
Moving on, Lou highlights the alignment of strategic product development and internal culture, using Blackberry’s focus on security as an example. He suggests that its technical expertise and strong security culture contribute to preventing serious data breaches.
John agrees, adding that BlackBerry’s mission is to secure everyone’s life, covering areas like security, protection, safety, and crisis management. This mission extends to all its products. He gives an example of how they build safety components for autonomous and connected cars, securing data and preventing hacker intrusions, which could compromise people’s physical safety.
Additionally, he reveals that BlackBerry’s software is embedded in 195 million cars, often controlling safety components like lane changes and communication systems. The company sees its role as influencing society positively, from its beginnings as a mobile phone company changing how people work to focusing on cybersecurity.
Lou reflects on BlackBerry’s innovative role in creating the modern, mobile work environment and suggests that the company’s culture aligns with its consumers’ experience. He then asks if this cultural alignment continues with their new focus on security.
John confirms this, stating that BlackBerry now operates as a ‘silent protector,’ securing the various digital interactions consumers engage with daily. He mentions a range of scenarios beyond just car safety, extending to medical equipment, drones, and smart city components.
He emphasizes that BlackBerry’s protective reach goes beyond the active use of its devices, extending to homes, offices, hospitals, and any vehicle with internet connectivity. The company’s mission is to secure communications among devices and infrastructures to safeguard consumers’ interactions.
On a similar note, Lou Carter asks if the culture at BlackBerry includes an interest in discovering vulnerabilities and getting involved in hacking.
John Chen affirms this, stating that in order to fulfill its mission to secure all aspects of their users’ lives, they must fully understand how hacking works. The company has a threat-hunting organization within it that analyzes trillions of files, building knowledge about how threats manifest and infiltrate organizations.
Chen explains the company also practices ‘white hat’ hacking, where its employees intentionally hack into an organization to assess its vulnerabilities. All these activities align with BlackBerry’s aim to provide robust protection and prevent threats like ransomware.
Next, Lou expresses his curiousity about Mr. Chen’s personal philosophy on leadership. He asks John to share the most important thing he believes in when it comes to leading his team and organization.
In response, John underscores the principle of fairness as a cornerstone of effective leadership. He acknowledges that fairness can be challenging to deliver since what appears fair to one person might not be fair to another. Despite this, he believes that striving for fairness in decision-making is crucial as people can better cope with negativity or hardships, if they are being treated fairly.
Chen also acknowledges the need for transparency in explaining decisions, especially those involving reward and compensation. He highlights the need for well-defined Key Performance Indicators (KPIs) and clear communication about these to ensure that reward systems are understood and seen as fair by all.
While he admits that he doesn’t achieve this every time, it’s a practice he always tries to uphold.
Moving on, Lou asks John about any advice he might have for budding entrepreneurs and tech leaders who are navigating their way up toward major financial milestones.
In response, the latter highlights three key areas for these business leaders to consider:
John advises leaders to establish a clear differentiation for their product or service within the market. This differentiation would be the Unique Selling Proposition (USP) that makes their offering stand out from competitors and drives consumer preference.
Mr. Chen believes that market share growth is more important than simply focusing on increasing revenue. He argues that if the market is growing and a company’s growth plan falls short of this rate, it could signal a problem. Therefore, capturing a larger portion of the market share should be a top priority for all companies looking to grow.
Lastly, John underscores the importance of sustaining a business and advises leaders to think long-term, looking three to five years into the future rather than focusing only on the short-term. He cautions that short-term solutions might make sense at the moment, but they often lead to issues in the long run.
John’s key message is to focus on providing unique value in the market, consistently growing market share, and planning for long-term sustainable growth. He believes that with these strategies, revenue will naturally follow.
Lastly, the speakers discuss the importance of sustainability of businesses. John highlights that short-term gains might look good on paper but often come at the cost of long-term sustainability.
Chen uses two illustrative examples:
If a company charges customers a one-time payment for a service extending over several years, the immediate revenue spike might look impressive. However, this strategy would lead to significant revenue shortfalls in the subsequent years.
To achieve short-term profitability, a company might decide to temporarily stop paying its employees. This would indeed make the company look very profitable in the short term, but it’s not a sustainable strategy.
All in all, John Chen emphasizes the importance of having a consistent and sustainable business plan. He advocates for focusing on the right metrics, moving progressively towards long-term goals, and ensuring the company’s strategies and operations are sustainable over time.
Lou and John go into much greater detail throughout this conversation.
Thank you for your time!
Lou Carter : It's great to be here today with John Chen Blackberry, CEO. What a treat! Hi, John, great to see you.
John Chen : Nice seeing you too. Thank you.
LC : Can't wait to talk today about you and how you created this culture of love, Blackberry. Wow! At becoming a Most Loved Workplace. Tell me more about how you did it? How do you create, you know, and lead a culture that employees love?
JC : Well, I think the most important thing is to make sure that you have a view of the culture you want to build up. You communicate to that. Not everybody, by the way, would agree with your view, [laugh], and value it the same way you value it. So and throughout the process of communication and working with, you know, the troops and working with the management team and be consistent.
A lot of time, you know, when you say, well, we care about a community, you gotta be consistent, caring about a community. If there is a natural disaster, what will our reaction be? You know, when you think about, you know, putting the money where your mouth is, you cannot just create a culture on a piece of paper and say, that's a really great culture.
You have to practice it. And it comes from all big things and small things, not just smoke. And so one other thing to do is to define the culture you like and communicate it. Not so much. And a lot of people would tell you that, oh, you would listen to the feedback and all that. You know, a culture is almost like a character of a person. You can't really, if I tell you, Hey, I want to be honest. And then you said, well, have you really thought about it? You know and then I said, oh, no, no. Okay, then I'll think about it. I'm not, I'm not gonna be that honest anymore. You know, I mean, you have to, you define what it is and, and you stick with it and you practice it.
And that's how we go about doing it. I don't know what I'm gonna stop for so that we could be more interactive. I'll let you dive into the direction you like to dive into cuz it's such a broad, interesting and also not very structured conversation. It’s topic, it's huge and it's important, but it's not structured. So, anyway, I’ll stop there.
LC : It is a huge, it really is a huge topic area and there's so much that goes along with it. Behavior, expectations, goals, aspirations, vision. There's, and especially with the construct of Most Loved Workplace, we look at, well, how do people collaborate? How do they create and innovate in difficult times in times of thriving? And for that matter, you know, how do we establish respect as a cultural norm? And, so those are really essential elements of any great workplace culture.
JC : Yeah. How to pick? So culture is broad. So, how to pick? What it is? And so called, you know, people like to use KPI, how you measure it. What is too much, what is not enough, it is an exercise on an ongoing care and feeding exercise, a lot of time you have to adjust someone. And then of course, you also need to adjust, you know, a different word using the pun “culturally.” There are very diverse workforce both in gender, age, and locations and countries. and you've gotta make sure that there's some underlying culture of honesty and integrity. And, but then you have to adjust to some of those, you know, demographics differences. And so it's not an easy, it's a lot of work. And circumstances always come up to test you about those work.
Obviously, you don't have a company, don't if you, or at least a worthwhile company, if you have no honesty, integrity, accountability as your basic foundation. I'm talking, you and I are talking probably a little bit beyond that, you know, about that. So, we said we care about the employees, you know, how do you exhibit, what do [inaudible] about you caring about the employees? And so we build a program starting from training to benefits, to ability for you to speak up, not making an environment that is overly open.
So, people could criticize everything from the color of the war and so forth. But really hone into the important things that is happening. Being able to be very transparent and open with our troops, trusting them not to take the company proprietary information and put it on social media, for example. And so that's always a balance. But we knock on wood, we've been pretty good in the last decade, or, I've been here eight years. We've been doing pretty good in that balancing act.
LC : One of the things that I see in companies today is how do they converge or co-create their products and what they do strategically with how they live inside their culture. So, if I were to sort of extrapolate with Blackberry, you know, you're exceptional at security and you've made incredible pivots to become successful and focusing on security. And I think about you, sort of what you said about, you know, keeping it inside of Blackberry if you will, right? And you know, well, and you have extreme expertise and technical knowledge inside of Blackberry that would keep a Snowden situation from happening, right? [laughs].
So it's, you think about culture, that's part of the culture, is that right? Wouldn't you say that this kind of knowledge that we are truly, you know, experts in how we secure knowledge and how we share it with each other and manage it for that matter?
JC : Yeah, that's a great thing. So on the top level, we call ourselves, there's a mission in what we do. And then what, what is the mission, right? The mission, what we do is to secure everybody's life. And if you look at our offerings and our know-how and what we do well is always about, you know, security, about protection, about safety, and about alerting crisis or managing crisis. So, if you look at, you know, and then that could map into every product that we build and sell. and that's, that's the kind of the mission of how we gonna change how people live. So, you know, I'm not doing any commercial, but, you know, just one data point, for example we build safety component for automobile, especially the autonomous driven cars and the so-called connected cars.
I mean, today's the car, basically the automobile is a, it's a set of microprocessors and it's a software architecture. And, and they make decisions, whether it's AI based or whatever, they do what they do, they make decisions, they interact with other cars, and they interact with other, you know, smart city component like traffic lights and satellites and whatnot. Through that process, somebody needs to secure the data and making sure the hacking system the hackers doesn't come in and create, you know, intrusion and then basically, you know, compromise the safety, physical safeties of people and property. And so Blackberry has, if you look at everything we do when we do a lot of things you know, be anywhere from ransomware to embed it into cars. We have 195 million cars today using our software embedded.
And a lot of them are on safety certification, meaning that we control your safety components of the car, lane changes, and, you know, communications and all that. So, that's a big part of the culture. The culture is what are you doing, you know, for the society. If you recall, Blackberry started, this is before my time, as one of the major cell phone, mobile phone company. And that mandate was to change the way people work. Okay?
You could not only work from your desk, which are used, the old mainframe and a whole bunch of terminals, and you have to connect it to your terminals physically by wires. Then you have to sit there with modem, which is running the slowest speed on earth, and you sit at home and doing all that. We went and took all that into a wireless communication platform.
And so you could be sitting on a beach and you could, you know, having picnic with your kids, but you could still work. And so those were the beginning of a major part of the company. And so now we have transitioned ourselves to more safety cyber or cyber protections. And again, it is how we change the society, how we change the world. We know smart city is real, it's real, it's gonna come, you know, whether you and I will enjoy it fully or not, we don't know, but I bet you were, but probably less me. But we wanted to make sure that we build infrastructure that is safe and controllable and doesn't really, you know, compromise the privacy of things where hospital cannot be the data in the hospital, which I'll have all the patients' data, you know, needs to be protected, for example.
And we do those kind of things and for the government, for armed forces and so forth, so forth. So that, that's what we do. Then on top of that, now, it's easier for me now because we only both mostly do our software business. We already made ourselves, for example, socially, we made ourselves carbon neutral already in 2020. Well, last year, 2021, we achieved carbon neutrality.
We were one of the early ones that, you know, get with the UN mandate and you know, turn ourselves on a carbon neutral and do a whole bunch of other things anywhere to deal with forestry, building, you know, growing more trees to cleaning the water. And so we're, our technology is applied to a lot of these areas. And sometimes, it's not only technology, it’s financial support, anyway, so I could go on somehow, I'll stop right there.
LC : And that's the fabric of your company is this innovation for security now. And you also, you innovated this entire process that we all enjoy now. It's just bringing our work outside. I say enjoy or not enjoy outside of our offices. And you really created that. You know, before anybody, and I remember having my Blackberry and bringing it everywhere. And what was interesting about it, and I'm assuming this probably still has a place in your culture, is that it, I had, I was part of that culture, the Blackberry culture, being a user of Blackberry.
And so the consumer and employee culture, I think, was fairly well aligned at that point in time. Is that something that you see too? Is that kind of security alignment now as what now that you've shifted to that same kind of security alignment of culture as you did when you innovated the field?
JC : Yes. What we're doing is to cyber-protect what consumers actually employ and touch. I use a lot of example about the car. You know, it will go beyond the car, you know, medical equipments and drones and you know, different smart city components. So, we're trying to secure all the communication among devices and infrastructures. So, we will then now be a silent protector for all the consumers who, you know, who gets on a train or boat or, you know, or get in a car that’s self driven or get in a car they connected to the internet and driving that way. And, you know, and all your healthcare facilities or the devices of the healthcare devices like infusion pumps and all that. This is what we do now. What we do is beyond just you actively using a Blackberry and the day, the days of CrackBerry, so to speak and that communication and that protection is now extended to your home and your office and the hospital you visit and your car, the car that transfers you around.
LC : And it extends. And I think of all of the people now, or the hackers now are trying to find vulnerabilities, and they'll just to get on the news, and they'll send in their, they'll put it on the get just that, you know, their, their hack on the get, do you have a culture at Blackberry where they're excited about getting involved in hacking and discovering vulnerabilities? Is that part of your culture [inaudible]?
JC : In order to do what we just said we were to do, which is we're gonna secure, do the best side we can to secure everything. You touch us in the life around you and your data. In order to do that, we need to understand and have full knowledge of how hacking works.
So, we do have threat hunting organization inside company. So we, just to make the world safe, we, and you know, we do analysis of trillions of files, and there were trillion. I was once, I thought when I first used it in our own, you know, internal document, I thought, well, that's a little exaggeration. I mean, that's like trillions a lot, you know? And so, but it turns out the experience we built up in the last 25 years actually come close to trillion funds. So that we have scanned and gone through and, and looked at and so forth. And so our knowledge that we build up of what threats looks like or what, how it was hidden, how it comes into an organization, we have a lot of those experiences.
So we not only threat hunted, we prevent it from a ransomware point of view. and we do white hat hacking, meaning we could offer ability to come into your organization and hack you for the constructive reason to see how vulnerable you are, for example. So we do all, we do all that now. Yes, we do.
LC : It's exciting. And that's what really makes a cool culture. And you think about the way that that interacts with other companies who are doing similar things in the value chain, not necessarily competitive things, but similar in the value chain. I think of Mihir Shukla, who's the CEO of automation anywhere. He's another most loved workplace, and there's such a synergy between the two of you because he automates in everything in, at work, at home, anywhere that requires automation even to robotics and everything is hackable at every stage.
As we move on to that, and even with the concept of singularity, you have a huge part in that, in ensuring that it's not hackable, it's not, it's not too human. You will [laugh] that, you know? Yeah. We go beyond humanity of we are able to allow for automation and, being brought from here to there to be very secure. And that's an important part of the culture.
JC : It is a big part of our culture. Again, the culture goes back to the employee, who loves it because we're making a difference. We're making a difference on, you know, how the world automate, you know, kind of like without us, you know, these things might not be trusted. So that kind of motivating for us. So, we wanna make sure that all the infusion pump in a hospital is completely managed and protected.
And so that was our important thing, so the patients and the doctors could go on and do what they need to do and to save lives. So, yes, those are motivating for a lot of our people. Yes.
LC : Outstanding. And it goes back to what you were saying before in the beginning you were saying, you know, let's not complain about everything. Let's stay on the positive. And because you have a really important mission, and you know we can't just be complaining about everything. We have to focus on the positive, focus on our trajectory so we can be successful to save people's lives, to ensure automation, to make sure we get from here to there in automated cars properly. And that’s a very…
It brings people together as a result of that common mission, which is exciting. It, you know, what would you say, you know, things that as you lead, your team, executive team and board your, just the way that you've in the past, what would you say for you personally, who, for John, what would you say is like a really important thing that you've always believed in philosophically how you lead, what's that one thing that you…
JC : How philosophically how we lead as a person?
LC : Yes.
JC : I always thought the most important thing, and even if I, if we're having, talking about, even if we're sitting here talking about management science, I always believe the most important thing that makes a difference to a leader is about fairness. And fairness is the hardest thing on earth to deliver, because what is fair to you might not be fair to your coworker. And so in order to sit here and administrate that fairness, if you could always remind yourself to do that makes a really good leader. That's my opinion.
And the reason is, it's very simple. People could deal with a lot of adversity or hardship or negativity if they believe they're treated fairly. People cannot handle it. You know, if I give you $10 and I give the next person a thousand, and there's no rhyme or reason for it, you both do the same job.
You start, you, it's not the, you know, the dollars, the delta differences. It the… There's the meaning that is right, is behind it. So that doesn't mean you don't give a high reward a high performer, a lot more than a low performer. That doesn't mean that. But you have to have, then, then you have to have the ability to articulate, you know, why that is fair.
Now, in order to articulate why that fair, KPIs and all that needs to be well-defined and however you wanna do it, unless you're a computer, there's some level of objectiveness to this. Minimizing that subjectiveness and being fair and being able to communicate about being fair is something that I would always like to practice. So, I mean, I don't do it 110%, but I try to do it as much as I can.
LC : And it sounds like you hold yourself accountable to do it so that you, you remind yourself to speak. And, it speaks the truth, doesn't it? So how people perceive thing, whatever it is that they're being given right. Or not given, and people's truths are different. So you have to manage that properly, you know? It's a challenge, I would assume, every day. And it is, I can see that every day with, with so many, so many people and so many stakeholders. That's really great advice, by the way.
So, that was awesome advice. Anything, so I just, I know this is, a lot of this is about philosophy and how to help others sort of, be successful like you have. Right. And so, you know, what other, advice would you give to tech leaders, to just entrepreneurs who are making their way to that kind of a hundred, 500 million mark right out there who are, you're, I know you're not billion plus, it's just getting their way up, growing rapidly, and, you know, how would you, what would you tell them to be thinking and doing and how, how would you help to help mold them?
JC : That's a tough one because it's different from industries, it's different from products. I prefer to focus more on market share. And so the question, you know, when we put down our plan and our annual operating plan, we call it AOP, with each of the operating unit is not about how much more revenue we are gonna grow. And we do ask that question. The most important fundamental question is, oh, there are two questions, but the first question is what is the, what is our differentiation in that market? That whatever the market they were participating, so that's, so I need to show up and people will say, okay, BlackBerry is doing this in this market.
You know they're serving that, you know, it's like a restaurant, right? What are your best dishes? Right? [laugh]. So, this is the way and why would people wanna buy it? So that's one thing. The second thing is, are you gaining market share or are you losing market share? And if the market is growing 20% and you have a plan to grow five, well, clearly that's a problem, right? So, and the final thing I want to add to it, because I deal with that all a lot. In fact, that was one case yesterday. You also have to have a consistent long-term plan. I mean, we look at it three years, five years out. We don't look at it like next year because you end up doing what short-term makes sense, but long-term you pay for it. And in order to have a good business or good enterprise, the sustainability is the most important thing.
It's not what is it today? You know, today, I got some challenges today through acquisition, through COVID pandemic and so forth. We're looking way beyond that. I mean, we have to have a plan to say, okay, if I do this right, three years from today, I will see that. And I will.
So I know you asked for one thing, but I I gave you three. I think you look at it long term, you look at your value add to whatever you're doing, and you look at it from a market share gain perspective rather than revenue, because if, if the market is a worthwhile market, your revenue will come because you're gaining market share.
LC: : And it is so at such wise words, because you're encouraging people to look at the signs and not just make reactive decisions, think into the future, be sustainable so that your decisions may have investment in the short term. You may have a loss in the short term, yet your gain will be much more in the long term. Right? And it's like investing, you invest, you can't just pull it out or shouldn't just pull it out immediately. You see the longevity of the company and of the stock itself, and the decisions of great CEOs like you who understand sustainability and growth over a long period of time.
JC : Yeah. Sustainability is the most, because I could flip it another way. Let's say tomorrow I go to all my customer and say, you need to only pay me once, and you never need to pay me again, and I will surface you for the next 10 years. And then, so next year, my revenue will just shut up. And then it will, everybody will celebrate, wow, this is a great growth.
But then, you know, for the next nine year, nine more years, you got nothing [laugh]. And so, and the similar thing is people want to be very profitable. It's easy. I go outside and tell my troops and say, by the way, take a month off without pay. This quarter, I will be so profitable! You know, it's like, wow, you know, these guys generate a lot of cash. You know, there's all this stuff because I haven't paid people for a month.
Now, unfortunately, you can sustain that, could you? I mean, you can't just say, well never come back. And so, this is why a sensible plan will be one that is consistent and sustainable, and you're looking at the right metrics and you make, you know, you chipped away. You know, you kind of get to that journey. And anyway, so that's exactly what we just talked about.
LC : It's extraordinary. John, this has been great meeting you, learning from you. Today, you have so much to give and have been so generous with your wisdom today. Thank you so much for joining us.
JC : Oh, thank you. Having me. Thank you.
