Blackberry – Ryerson Review of Journalism :: The Ryerson School of Journalism http://rrj.ca Canada's Watchdog on the watchdogs Sat, 30 Apr 2016 14:26:17 +0000 en-US hourly 1 How BlackBerry execs bullied journalists and why nobody fought back http://rrj.ca/how-blackberry-execs-bullied-journalists-and-why-nobody-fought-back/ http://rrj.ca/how-blackberry-execs-bullied-journalists-and-why-nobody-fought-back/#respond Wed, 16 Apr 2014 17:28:39 +0000 http://rrj.journalism.ryerson.ca/?p=276 How BlackBerry execs bullied journalists and why nobody fought back By Christina Pellegrini  When John Stackhouse first met Jim Balsillie at a business social almost a decade ago, the co-CEO of Research In Motion didn’t mince words. Once Balsillie figured out who Stackhouse was—the freshly appointed editor of The Globe and Mail’s Report on Business section—he pointed a finger at him and launched into an attack [...]]]> How BlackBerry execs bullied journalists and why nobody fought back

By Christina Pellegrini 

When John Stackhouse first met Jim Balsillie at a business social almost a decade ago, the co-CEO of Research In Motion didn’t mince words. Once Balsillie figured out who Stackhouse was—the freshly appointed editor of The Globe and Mail’s Report on Business section—he pointed a finger at him and launched into an attack on what he saw as the paper’s negative coverage of RIM. “I have this very clear memory of him, not quite shouting, but speaking in a very aggressive manner,” says Stackhouse, now the Globe’s editor-in-chief. “I don’t recall being challenged that publicly by a CEO.”

Relations with RIM had been bad for at least two years. In fact, the company’s executives were hardly speaking to the paper at all—no advance warnings of news or press events, no interviews and no responses from the press relations department. Things got so bad that Balsillie banned copies of the Globe from RIM’s Waterloo, Ontario, headquarters. “It was astonishingly vindictive and petty,” Stackhouse says.

The tensions developed after a December 2002 article that questioned the true value of a much-heralded donation RIM’s other CEO, Mike Lazaridis, made to his Perimeter Institute for Theoretical Physics in Waterloo. Both CEOs were furious, and time didn’t change that. Stackhouse, who was foreign editor in 2002, says Balsillie “was still pissed off” two years later. For the Globe and most other Canadian papers, stories that didn’t celebrate the firm, its leaders or its products threatened future access.

By 2004, 75 percent of RIM’s revenue came from the U.S., so journalists north of the border were likely nothing more than a nuisance for Balsillie. “He liked to say he didn’t need the Canadian media,” recalls Stackhouse.

And when Balsillie did relent and speak to the Globe, he kept the pressure on. Around the end of 2006, Simon Avery, then the paper’s technology reporter, found himself on the phone with Balsillie as the executive angrily aired his historic grievances about the paper. He concluded his diatribe with a warning. “I remember his words exactly,” Avery says: “‘Your editors are watching you like a hawk. I’ve spoken to them.’”

***

The Globe’s experiences with RIM, now known as BlackBerry, were typical. As it became a globe-spanning firm, it gained a reputation as a notoriously difficult company to cover. Like other technology giants, it could be reticent about disclosing information and fickle about whom it was willing to disclose it to. But the company’s press relations were especially dismissive and inaccessible—and run to an unusual extent by Balsillie, who wasn’t afraid to make his influence felt.

This imperious nature was an open secret among the journalists who encountered it, but details of the tempestuous relations between news outlets and the company—the blacklisting, the phone and email tag, the unanswered queries, the run-ins with Balsillie—were never shared. Heidi Davidson, currently senior vice president of corporate communications at BlackBerry, had no knowledge of the company’s rocky past with the press. “I’ve not heard any of those stories,” she said. “I’m surprised.” Lazaridis did not respond to interview requests for this story, and Balsillie’s spokeswoman declined on his behalf.

While American publications relished describing the frustrations of dealing with secretive Apple and the late, mercurial Steve Jobs, Canadian journalists barely made a peep about dealings with their homegrown superstar. They had their reasons for keeping it all to themselves—the main one being the need to maintain relationships with their sources. Besides, RIM was ascendent, and its performance in the marketplace made the nature of its dealings with the press seem inconsequential. Of course, its success wouldn’t last forever. The company eventually foundered in a fit of what Iain Marlow, another Globe reporter, calls “institutional arrogance”: a string of missed opportunities, bad decisions and delayed, then botched, product launches.

The rocky press relations in the early to mid-2000s were symptomatic of problems that were brewing inside the company. Given what we now know about how far and how fast BlackBerry has fallen, it’s hard not to ask whether, by not reporting their experiences with the company, journalists missed an ominous clue about the years to come.

***

Reporters had struggled to get timely access to official RIM sources for years. Many found that they either attracted the attention of Balsillie or didn’t get any access at all.

Chatting with senior management isn’t just for quotes. Time with an executive gets reporters into the minds behind a company’s decisions and helps quash speculation, which is especially rampant in the tech world. It allows journalists to get ahead of the market, as opposed to following the movements of stock prices to see how a company is doing. And it gets them scoops.

Since the company was founded in 1984, RIM’s relationship with the press described a long arc, from a young company that needed Canadian journalists, to a global giant that didn’t, to an embattled company that needed them again. In the early days, RIM’s press relations pitched the budding start-up to Ian Austen, who was then writing forCanadian Business. Once, Balsillie talked shop and hockey with then-technology reporter Mark Evans over coffee in the Globe’s cafeteria.

But RIM severed such established relationships in the years after it outsourced its media relations to the New York City office of PR firm Brodeur Partners in 1997. “It became a lot harder to talk to senior executives. They were well insulated,” says Evans, now a start-up marketing consultant. With Brodeur, the rules of engagement changed: RIM became selective about whom it talked to, and many responses came only via email. (BlackBerry’s Davidson denies this, saying that many queries of the era were indeed answered by phone and in person. Marisa Conway, who managed the RIM account at Brodeur for nearly a decade, until 2013, declined to comment.) Reporters and editors started to mock the answers they received. “There used to be jokes about Balsillie using those emails as a pseudonym,” says Stackhouse, “because [Conway] didn’t communicate by voice.”

Reporters received terse boilerplate statements that were either not helpful or were delivered post-deadline. So they began to offer confidentiality in exchange for information, resulting in stories that cited “high-level sources close to the company,” and which, Davidson says, often contained inaccuracies.

“It was basically impossible to write a good-news story about them,” says Marlow, who started reporting on RIM in 2010 and became the Globe’s first reporter dedicated to covering the company. “They wouldn’t really co-operate with you.” When he wanted to write about the smartphone’s latest operating system, BlackBerry 10, requests to interview the engineers who built it were declined, ignored or left in limbo. The company would say it would try to arrange an interview—but nothing materialized, Marlow says. “That happened so many times I lost count.”

The Globe wasn’t the only paper that ran into trouble with RIM. Before the company went public in 1997, it co-operated with Waterloo region’s The Record, but that soon changed. “What appeared in The Record wasn’t so important,” says business editor Ron DeRuyter. “It was more important for them to be in larger newspapers around the world.”

Still, that didn’t stop RIM executives from bearing down on The Record when they didn’t like what they saw in the paper. Balsillie’s 2006 bid to purchase the NHL’s Pittsburgh Penguins—after flat-out denying to The Record having any interest in doing so—sparked a behind-the-scenes clash between RIM and the paper. “There was a huge falling-out over that particular issue,” says DeRuyter. “For a while, it was almost like they shut us out.”

In 2007, the company cut ties with The Record’s then-business reporter Matt Walcoff because it felt his coverage of the Penguins deal was too negative. The tensions led DeRuyter to a series of phone, email and in-person exchanges with RIM’s vice president of corporate marketing at the time, Mark Guibert. DeRuyter told him that Walcoff would stay on the beat, but promised to edit all copy about RIM himself. (Walcoff died in 2012.) Guibert still wasn’t satisfied, says DeRuyter, so Balsillie went up the chain and met with The Record’s editor-in-chief and publisher.

RIM became increasingly aloof as it excelled. “The more successful they got, the more arrogant they became,” says Evans. “They just became the people that thought of themselves as the smartest people in the room.” Larger outlets struggled as well—even the international papers that RIM prized. “In terms of the accessibility scale of corporations, they were at the Stephen Harper end of things,” says Austen, now the Canadian correspondent for The New York Times. “They weren’t highly co-operative.”

Barrie McKenna, the Globe’s Washington correspondent until 2010, had a front-row seat to RIM’s antics and arrogance when he covered its bitter five-year patent infringement dispute against NTP in Richmond, Virginia. “Quite frankly, their treatment of the media back then was exactly the way they treated people suing them,” recalls McKenna, now the Globe’s Ottawa-based national business correspondent and columnist. “It was with total disdain, like they didn’t need to talk with you.”

If Canadian reporters wanted to chat with product engineers or senior managers other than Balsillie, they often had to go to RIM’s biannual developers conferences in the U.S. “They were local in Waterloo, but you couldn’t get in to see much. You had to go to these road shows out of town,” says former Record reporter Chuck Howitt. “That was one of the ironies of the company.”

Not everyone had trouble with RIM, though; Kevin Restivo seemed to enjoy better relations than most. A National Post technology reporter in the mid-2000s who now works as a financial analyst covering mobility companies including BlackBerry, Restivo says Balsillie was “always very professional” and hands-on—it wasn’t uncommon for him to return emails directly or chat by phone during his travels. “He read everything we wrote; I’m sure of that,” he says, adding that Balsillie was quick to point out when he felt the Post’s reporting failed to grasp the company’s potential or appreciate its dominant position in the market. And Restivo contends that Balsillie, at times, was right.

***

RIM’s overbearing demeanour created turbulence within newsrooms. Through 2005 and 2006, Stackhouse, sensing the Globe’s coverage was suffering, quietly pursued a way to restore access. He would cross paths with Balsillie at a handful of business socials. “I would go out of my way to talk to him,” Stackhouse says. But it always ended the same way: “He refused to talk to the Globe.”

So Stackhouse and then-editor-in-chief Edward Greenspon drove to Waterloo to meet with Balsillie. It was the first time Stackhouse would see the buildings where RIM executives worked and the last time he would go out of his way to build ties with the company. As he expected, nothing but more ranting ensued. “Another earful,” he recalls.

Avery told him about Balsillie’s “watching you like a hawk” warning. “I was offended,” Stackhouse recalls, but since the Globe had no access, Balsillie had little leverage; it was only bluster. “It was ironic in that there was nothing to threaten us with.”

But not everyone was convinced that Stackhouse’s efforts to reach out to RIM executives wouldn’t be seen as caving in. Mathew Ingram, then a business columnist, had been critical of the company, contending that its shares were overvalued, even as they continued to rise. According to an email exchange obtained from Ingram, now a senior writer at technology blog Gigaom, Stackhouse told him it was time to write a “bold, confessional-style column” to own up to his mistakes.

While it’s not uncommon for investment columnists to acknowledge their hits and misses publicly, the timing of Stackhouse’s request—January 10, 2006—troubled Ingram. “I kind of get the feeling that I’m the only one who has to write a mea culpa mainly because Jim Balsillie has been shouting the loudest,” he wrote in his reply to Stackhouse. (For his part, Stackhouse rejects the notion that his meeting with Balsillie prompted his request to Ingram, calling it a “curious assertion.” He says it was reader feedback, and not Balsillie, that brought about his suggestion.)

Stackhouse thought the Globe’s coverage of RIM was overly focused on the technology behind its smartphones, rather than what was really going on inside the company. “We had really fine technology writers. We didn’t have really strong corporate reporting,” Stackhouse says. The paper’s limited access meant its writers just scratched the surface of RIM’s narrative, paving the way for in-depth investigations soon to come.

***

RIM’s corporate culture, in which its co-CEOs played no small part, is one of the accepted reasons why the firm stalled and plummetted. It failed to respond to consumer-friendly iPhones and Androids, and swiftly lost its status as America’s smartphone of choice.

Post-mortems of RIM’s glory days, written with the benefit of hindsight, describe a company where complacency replaced boldness. Internally, it wasn’t a friendly or creative place. The company was swift to litigate. A 2012 report in The Verge described a culture that punished failure with firings, leading to an environment where risk was something to be avoided.

Simon Avery says he learned a lot about RIM through his interactions with its people. “The communications department was a window into the rest of the company,” he says. “And I really felt that it showed weak management, and it was a harbinger of troubles to come across the company.”

In the early to mid-2000s, journalists depicted Balsillie as brash, but intense and competitive. But when the company began underperforming in the late 2000s, arrogance and hubris became the descriptors of choice. Except, of course, they could have been applied long before RIM faltered, as early exchanges with reporters and editors made clear.

Kevin Restivo sees it differently. Difficult people have run successful tech companies before: Apple’s Steve Jobs, Oracle’s Larry Ellison and Microsoft’s Steve Ballmer, to name a few. “Drawing a line from his temper to shareholder returns is tenuous at best,” the financial analyst says. “I don’t see it.”

But the things that journalists left out about RIM’s press relations seem more relevant because they show a pattern that would reappear as the company stumbled. And although it was something journalists were intimately familiar with, they never shared it with readers. Outsiders were unaware of Balsillie’s high-handed temperament.

In 2009, a court deposition by Craig Leipold, the former owner of the Nashville Predators, an NHL team Balsillie once tried to buy, painted him in a startlingly negative light: “He operates by threats, by innuendos, by phone calls to people. Quiet phone calls, and you can connect the dots.”

Maclean’s quoted the deposition in “Why Balsillie went ballistic,” an October 2009 cover story. But Nadir Mohamed, then CEO and president of Rogers Communications, which publishes Maclean’s, later criticized the article in a letter to the editor, claiming the piece “fails to tell the whole story about Jim Balsillie.” A Richard Ivey School of Business case study written by a former reporter at Canadian Business (another Rogers publication) concluded, “According to Maclean’s employees, the message was loud and clear: ‘Don’t mess with Balsillie.’”

A new side of the esteemed business leader, and the type of company he and Lazaridis ran, was slowly coming into focus. “Up to that point, I’d called [RIM’s co-CEOs] stealth executives,” Queen’s University business professor John Pliniussen told Maclean’s in 2012. “We didn’t get any insight into their personalities, so most of us assumed they were sort of staid. When Balsillie got into the sports arena, we got a glimpse of personality and the reaction was, ‘Omigosh, he’s a fiend!’”

Balsillie’s relentless pursuit of an NHL franchise wasn’t shocking; after all, his passion for hockey was well documented. But his approach—as in his dealings with journalists—was ruthless.

It’s the same way both he and Lazaridis publicly dismissed Apple’s iPhone and its prospects (in 2007, for example, Balsillie said: “In terms of a sort of sea-change for BlackBerry, I would think that’s overstating it”). They underestimated the mobile consumer applications market (in 2010, Balsillie said: “You don’t need to make the web an app. I don’t need a YouTube app to go to YouTube”). And they remained silent for the first two days of a three-day worldwide BlackBerry service outage in 2011. The chief executives appeared to have no fear or any notion that, one day, their company would be jolted off its perch.

For all the bad blood, Canadian journalists kept their troubles with RIM to themselves. Writers and editors say calling the company out on its abysmal press relations would have been unprofessional, unfair, self-serving, inconsequential and irrelevant. They were reluctant to become the story. “I could never write about myself,” says Ian Austen. Simon Avery, who left the Globe for a not-for-profit last year, wouldn’t write about himself when he was a reporter either. “I can talk about it now as my personal opinion,” he says, “but it’s very hard to write a story like that at the time.”

Some did offer hints, though. Avery’s approach, for example, was to write that Balsillie repeatedly turned down interview requests from the paper. While true, the disclosure understated the extent of the tensions between RIM and the Globe. In fact, few people knew the paper was even on a blacklist.

And then there was the hometown-hero factor. RIM was Canada’s high-tech champion—a sorely needed success story in a country whose last tech titan, Nortel, had imploded in scandal. Among the product evangelists, or “fanboys,” who cheer for the company as they would a sports team and heckle bearish technology-beat reporters, the BlackBerry maker is still held in high regard.

The co-CEOs were heroes, too. Engineering whiz Lazaridis helped pave the way for Waterloo to become a thriving start-up tech ecosystem. Some journalists branded Balsillie as the ultimate salesman: smart, humble, charming, persuasive. One 2009 Globe sports piece glowingly referred to him as “Captain Canada.” Both CEOs were philanthropists, donating millions to local causes, especially education. They were celebrated for their success: Time included the pair in the Time 100 in 2005; together they were Canada’s Outstanding CEO of the Year in 2006; and the Canadian Journalism Foundation honoured them in 2010 for the way the BlackBerry revolutionized news reporting.

At its peak, the company seemed like the subject of a modern-day corporate fairy tale. A great many Canadians—including telecom executives, investment bankers, lawyers, government personnel, institutional investors and traders—had a financial stake in RIM’s success.

Journalists often quoted those people in their news articles, especially since most reporters heard from the co-CEOs only once every three months, during quarterly earnings conference calls. And even then, as with other public companies, journalists could dial in and listen, but they couldn’t ask questions. (They still can’t.)

Infrequent access to RIM executives left journalists looking elsewhere for insight. Many reporters depended on financial analysts to make sense of news and look ahead. These experts play a key role in business news, but at times, an astute reporter can know just as much as they do. Still, analysts interviewed for this story say Canadian journalists were too bullish on RIM for too long. “When it came time to actually take an objective look at BlackBerry’s prospects,” says Neeraj Monga, executive vice president and head of research at Veritas Investment Research, “nobody did that in the media.”

***

In July 2011, the Globe got the break it needed: layoffs created roughly 2,000 former employees, many of whom were willing to chat—confidentially, for the most part. By mid-November, Stackhouse, by then editor-in-chief, and Derek DeCloet, managing editor of ROB, assigned reporter Iain Marlow to cover the company from the paper’s “Waterloo bureau,” where he’d spend three days a week for the next year and a half.

As the company’s fortunes waned, its press relations improved. Months after Thorsten Heins succeeded Balsillie and Lazaridis as CEO in January 2012, RIM brought the bulk of its press relations in-house and, slowly, became more open. (Turnaround specialist John Chen replaced Heins in November 2013.) Journalists such as The Record’s Howitt noticed an improvement; once, he even swapped story ideas with a BlackBerry staffer at a local coffee shop. “It was very unusual,” he says. “That would have never happened in the past.”

The company shifted its communication strategy to “developing relationships.” After Davidson joined RIM in 2011, one of her first meetings was with Stackhouse. The company’s new openness was evident when Marlow travelled to Lagos, Nigeria, in September 2012 to see and write about BlackBerry’s successes and challenges in the developing world. “It’s a good example of a story that can come out because of a collaboration between media relations people and journalists,” says Marlow, who rode around Lagos, observed press conferences and attended ribbon-cutting events with company executives. “Years ago, they’d have never granted that sort of access.”

***

Not all reporters have been so lucky. It took The Canadian Press’s David Friend 15 months to get a face-to-face interview with Heins. And the only time Joe Castaldo ofCanadian Business chatted with the new CEO was shortly after Heins took the job. “I, personally, didn’t notice too big a change,” Castaldo says. “I didn’t think the company got drastically more accessible.”

My own experiences with BlackBerry weren’t so far removed from the difficulties many of these journalists describe. When I attempted to reach the company’s media relations department for comment, my emails and phone calls went unanswered for three months—even though BlackBerry says it aims to respond to media requests within 30 minutes. It was only after I emailed every former member of the company’s PR team I could find on LinkedIn that I got a response from an official source.

That’s not the type of department Davidson strives to run. “You can be a company that just lobs statements or press releases,” she said when she finally spoke to me in January. “We want to have relationships where it’s a give-and-take, always.”

Business reporters will be watching to see if that’s the relationship they get. Readers, if they’re lucky, will find out either way.

]]>
http://rrj.ca/how-blackberry-execs-bullied-journalists-and-why-nobody-fought-back/feed/ 0