Blackberry’s (reputation) crumble

By Maita Soukup, Account Manager, ReputationInc.

Despite the ill will on Twitter, the demands for compensation, and the business media’s early epitaphs to Research in Motion, this week’s Blackberry crisis was fundamentally a case of bad timing.  Had the business not already been facing serious doubts about its leadership and innovation capability, the global service interruption would have made one day of front page headlines – not three.

While the loss of service was an annoyance to customers, what makes this technology disruption so different from the lacklustre broadband service we’ve come to expect, or the multitude of glitches consumers found immediately after laying out hundreds of pounds for a shiny new iPhone?

In other words, what transformed a technical failure into a global reputation crisis?

First, when the spotty service began on Tuesday, RIM was already operating against a backdrop of falling sales, and diminishing faith in its ability to compete against the other smart phone makers on the block.  The global technical failure was a conveniently placed nail for disaffected investors to hammer into the company’s coffin.

Secondly, the server meltdown coinciding exactly when enthusiasm about Blackberry’s main competitor, Apple, took on a quasi-religious dimension following Steve Job’s death earlier this month.  Never as sexy as the iPhone, until this week Blackberry at least had reliability on its side.  At the first sign of weakness, Apple evangelists and technophiles took to social media with a distinct hint of schadenfreude in their criticism of RIM.

However, none of these forces would have had quite such a devastating effect on RIM’s reputation had the business managed its response to the crisis faster, and more proactively. 

The apology video from BB’s founder Mike Lazaridis was faultless in content: he showed true remorse; admitted failings; and provided new information. However, it was too late.  There was simply no way to reverse the tidal wave of negative sentiment that took a life of its own during the first 48 hours of the crisis.

Essentially, RIM lost control of the story during the critical first 12 hours of disruption.  The floodgates were left wide open for both traditional and social media channels to speculate, voice frustration, and begin demanding rebates for the service failure.

Responding to a crisis successfully is all about preparation and anticipation.  Had RIM been more proactive in managing its investors’ eroding confidence over the past six months, the negative sentiment picked up by media would not have been nearly as deep.  Similarly, had the company responded earlier and more definitively to the initial service disruption, it would have retained more control over the emerging story – rather than being on the back foot as new updates and criticism ran rampant throughout social media.

I may be in the minority, but I am confident that RIM can recover its reputation as a reliable innovator over time.  However, it will require the company’s leaders to share a clear vision for the businesses’ future (sharpish!) and then re-align its approach to innovation and operations to deliver on that ambition.