BlackBerry as a private company: What wouldn’t change

Thorsten Heins has repeatedly asked for time, not space. It’s an important difference.

The rumours -- and they are only rumours -- that BlackBerry’s board is warming up to the idea of taking the Waterloo, Ont.-based smartphone maker private are built on the premise that away from all that shareholder scrutiny, without the endless criticisms from financial analysts, Heins and his team could more easily focus on what he has called “phase three” of BlackBerry’s turnaround.

As a refresher, phase one was restructuring and bringing down costs. A lot of that work has been done. Phase two was introducing BB10 and its associated devices, the Z10 and the Q10. That mission is still underway, but the recent disappointment about sell-through rates for the devices has suggested that, despite some good leadership, Heins is not succeeding. Becoming a private firm again could give him a more protected space in which to get device sales back on track in time to reach phase three, or growth and profitability.

The problem with that logic is that a deal to take BlackBerry private would have to go through a lot of hoops, not least a review by the Canadian government. Finding the right partner for a buyout would not be easy. And activist shareholders can be a wild card -- just look at what’s been happening between Carl Icahn and Dell, which has been trying to go private for months.

All of this adds up to about as much time as Heins will probably need to build up BB10’s sales (assuming he can do it), while simultaneously increasing its presence in the mobile device management (M2M) space. In fact, going private could put some of those strategies in limbo as a deal would prompt a lot more discussions about strategic direction.

At this point, going private is about as realistic an option for BlackBerry as spinning off parts of the firm into separate entities. Heins is asked the latter question on every single investor call I’ve listened in on, and the answer is uniformly the same: No one will rule out anything, but right now he’s sticking with Plan A.

Going private would also do little to address another pressing problem at BlackBerry: the talent exodus. Earlier this week three more senior executives reportedly left or are preparing to leave. They worked in major areas like corporate IT, manufacturing and service. Even if BlackBerry were no interested in being a public company, Heins needs to create an environment that will attract loyalty and passion from the people around him before anything else changes.

When BlackBerry’s stock jumped on these rumours, I interpreted it not necessarily as an endorsement for the idea of going private but a collective wish that the company could get some kind of break to put its house in order. It doesn’t work that way. Great companies need great leadership, whether traded on the stock market or not. If Thorsten Heins can’t deliver that, going private would be tantamount to admitting a very public failure.