BlackBerry Blues

The Canadian Press ~ OBJ
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BlackBerry Blues — Photo by the Associated Press

BlackBerry services returned to normal Thursday after four days of global outages, but the maker of the popular smartphone faces a new set of challenges as it tries to clean up a public relations headache.

Research In Motion’s two co-CEOs — Mike Lazaridis and Jim Balsillie — emerged from more than three days of silence to answer questions and apologize again about the biggest outage in the Canadian company’s history.

As the troubles wore on this week, RIM offered only a few updates on what was happening while a growing number of BlackBerry users turned to their Facebook and Twitter accounts to express their frustrations.

The Waterloo, Ont.-based company has about 70 million BlackBerry subscribers around the world, and while the technical glitches did not affect everyone, the word of discontent spread fast.

RIM has now stepped into territory where many other major companies have tread in recent years, commonly known as “crisis management” in the public relations industry. It’s caused by an event, or series of events, that could potentially prove disastrous to the organization, if fumbled.

Co-CEO Balsillie defended RIM’s decision to wait until the problems were nearly fixed before coming out publicly in a bigger way. He said the company will now turn its attention to addressing BlackBerry users.

“It’s a priority, but I do want to say our priority right up until this moment was making sure the system was up and running and operating globally,” Balsillie said on a conference call with Lazaridis, a relatively rare appearance of both executives together.

That attitude may have worked in the past, but with the rise of social media in recent years, the urgency of major companies addressing their customer’s concerns has reached a new level, say some observers.

“It’s important for brands to be perceived as being responsible and perceived as if they care very much about the brand community,” said Sidneyeve Matrix, a professor of media and mass communications at Queen’s University in Kingston, Ont.

“The damage that can be done to the brand is something worth worrying about.”

RIM rival Apple has become the world’s second most valuable company in part because of its excellent technology, masterful global marketing and strong brand awareness that makes its products a must buy to millions of consumers.

Apple’s success and mounting competition in the consumer tech market has put intense pressure on RIM’s business and led to calls from some shareholders of the Canadian technology icon to sell the company or split it up.

In Thursday’s conference call, RIM explained that the widespread outage was caused by a technical failure and a backup-system failure in Europe, which caused a massive backlog of emails and texts around the world.

The outages then spread to the Middle East, Africa and hit Canada on Wednesday. Parts of South America, as well as Asian markets including Hong Kong, Japan, Singapore and India, were also affected.

Lazaridis said on Thursday that he wanted to apologize to BlackBerry customers.

“All the services are back up globally,” he said.

See ‘GOING,’ page D2

‘Going silent’ not helpful

“We are and will take every action feasible to address this quickly, efficiently and to minimize the risk of something of this magnitude happening again. We’re committed to restoring the trust that we’ve worked so hard to earn over the years.”

Kalene Morgan, who teaches public relations and worked in the industry for 20 years, said “going silent” doesn’t help companies in difficult times.

RIM should have been sending out regular updates, ideally every six hours even if there’s not a lot of new information to keep people informed, said Morgan, professor and co-ordinator of the public relations graduate certificate program at Toronto’s Humber College.

“It sounds like they were so focused on the engineering that they forgot about the communications,” Morgan said. “What I don’t understand is how they got caught unaware about the communication issue.”

Technology analyst Alkesh Shah said RIM has a “PR challenge” on its hands and doesn’t seem to understand consumer marketing.

“As soon as you know there’s a problem, come out and say, ’We have a problem and we’re working on it and it will be fixed soon,”’ said Shah of New York-based Evercore Partners.

“You let the consumers know you are completely focused on this and they’re the most important thing in the world.”

Instead, RIM appeared to want to fix the problem first and then tell consumers it was repaired, Shah said.

Whether the approach used by RIM will ultimately hurt the company’s brand remains to be seen, but major crises have enveloped many major companies, with mixed results.

In recent years, perhaps the most prominent incident was Toyota’s global recall of millions of vehicles for problems tied to gas pedals. The company was criticized for being slow to respond, and the incident  tarnished its reputation.

Sony received a mixed reaction earlier this year when it responded to hackers compromising the security of its PlayStation Network and stealing personal information from its subscribers. The company’s near 70 million users lost full access to their accounts for weeks, but Sony tried to make amends by giving customers free games and other services to compensate.

Maple Leaf Foods is widely considered a textbook example of successful public relations for the way it handled Canada’s largest food recall ever due to a deadly outbreak of Listeria at one of its meat plants in August 2008.

The company’s chief executive Michael McCain quickly responded to the recall by holding a press conference, as well as recording a YouTube video detailing the steps Maple Leaf was taking to resolve the problems. The company also bought advertisements in newspapers and on television to inform customers further.

Pat McHugh, senior portfolio manger at Manulife Asset Management, said RIM’s CEOs should have been out front from Day One.

“We should have seen the co-CEO’s right at the very beginning talking, instead of some head of technology — whoever that guy was.”

RIM sent out its chief technology officer David Yach to explain the problem on Wednesday, the third day when the outages went global. It wasn’t until the outage was basically resolved on Thursday when Lazaradis went on YouTube to give an update.

The scripted video, in which Lazaridis spoke directly to the camera while wearing a black polo shirt emblazoned with the BlackBerry logo, was the first instance in which one of the company’s co-CEOs appeared publicly to address the outage.

The two executives then quickly scheduled a conference call that was accessible to both the media and the public through the company’s website.

Balsillie assured that the outage had nothing to do with the company scaling back its workforce. RIM recently cut more than 2,000 jobs.

The length of the problems has bruised Research In Motion’s reputation for reliability and could give consumers and businesses another reason to switch to Apple or Android devices.

RIM had initially told customers that its systems were back to normal after an outage affected Europe on Monday, but instead the problems spread to other countries, and eventually most of the world.

RIM has long been criticized for keeping customers in the dark over the status of its technical problems, but the dual video and conference call marked a significant change in the way it operates.

“We know that you want to hear more from us and we’re working to update you more frequently through our websites and social media channels as we gather more information,” Lazaridis told users in the YouTube video.

Shares in Research In Motion closed down 15 cents to $24.12 Thursday on the Toronto Stock Exchange.

Organizations: Humber College, Research In Motion, Apple University in Kingston Evercore Partners Toyota Maple Leaf Foods Manulife Asset Management Day One Toronto Stock Exchange

Geographic location: Waterloo, Europe, Canada Queen Middle East Africa South America Hong Kong Japan Singapore India Toronto Maple Leaf

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