John Chen started his career like a lot of young engineers do: working the dreaded “third shift.” Fresh out of college, Chen found himself on the floor of a mainframe computer assembly facility in southern California from 10 p.m. until 6 a.m., debugging machines and fixing manufacturing problems. In the dead of night, while the engineers and designers slept, “you were basically left alone with millions of lines of code, and schematics coming out everywhere,” he tells Report on Business magazine during a series of exclusive interviews in late January and February. “It forced me to go through it the brute force way. You learn everything line by line, wire by wire.”
Thirty-five years later, Chen is back on a third shift of a different sort, as the new chief executive officer of BlackBerry Ltd., following long-time co-CEOs Mike Lazaridis and Jim Balsillie and their short-lived successor, Thorsten Heins. Chen sees a lot of parallels between his first job and his latest. “This is like the third shift, sitting there, by myself…and trying to figure out where the problem is,” says Chen, who was swept in last November when Fairfax Financial Holdings Ltd. abandoned its takeover of the company and instead led a $1.25-billion refinancing (all currency in U.S. dollars). “It could be devastating—you could be wrong. You could be working on a problem in circles and looking at the wrong places. But it could be really cool too.”
When Chen joined BlackBerry, it was bleeding customers, employees, revenue, cash and share value. An all-in bet on a new operating system called BlackBerry 10 had failed, prompting BlackBerry to put itself up for sale. The company formerly known as Research In Motion, which had pioneered the $350-billion-plus smartphone industry, seemed destined to disappear.
Chen, by nature, is drawn to a puzzle few believed could be solved: finding a sustainable path forward for the iconic Canadian company as the BlackBerry smartphone—the signature product around which the whole company was built—continues to lose market share and sink further into irrelevance.
When Fairfax CEO Prem Watsa met with Chen early last October at a luxury resort in Napa Valley to discuss the opportunity, “John said, ‘I don’t need a job.’ But…he [also] said, ‘This is an icon in the business and it really needs to survive. It doesn’t need to die,’” says Watsa. “And that’s what intrigued him.”
Although short sellers, potential suitors and a myriad of naysayers had largely given the company up for dead, Chen saw overlooked potential—including an admired secure corporate network business that could thrive in an era of hacking and spying; a device business that still has a strong presence in many emerging markets; and a global market of millions of users who prefer to use an actual keyboard rather than a touchscreen version.
Investors soon learned Chen was a catch, albeit an expensive one: He began the job with $85-million worth of restricted stock (he also has the use of a company jet to fly him to and from California, where he will continue to live). Aside from Steve Jobs’s famous fix at Apple, Chen led arguably the most successful turnaround in Silicon Valley in the last 20 years: He right-sided flailing database software specialist Sybase Inc., steadily created shareholder value at the firm, and then sold it to SAP AG for $5.8 billion in 2010. Chen, one of the first Asian-Americans to head a major U.S. company, sits on the boards of the Walt Disney Co. and Wells Fargo & Co.; he’s also a key power broker in Sino-American economic relations.
Chen knows BlackBerry’s core market well—Sybase has supplied both the company and its rivals—and he has zeroed in on winning back its core “enterprise” (i.e., corporate and government) users. He has moved quickly and sure-footedly in his first 100 days, striking a manufacturing deal with Taiwan’s Foxconn Technology Group that off-loads much of the company’s financial risk and overhauling the senior management team, recruiting a group of experienced executives he knows and trusts. When Mark Wilson, a former Sybase marketing VP, e-mailed to congratulate him on the BlackBerry job, Chen immediately wrote back, asking if he was interested in working for him again. “I was a bit taken aback,” says Wilson, who was happily employed as chief marketing officer at Avaya Inc. “I get a lot of calls for jobs and always say no.” Two months later, he was senior vice-president of marketing at BlackBerry. “I think it’s a challenge, for sure,” Wilson says. “But I wouldn’t be here if I didn’t think we could do it.”