BlackBerry Outage – What Really Happened

This story was amusing.  BlackBerry had a pretty severe service outage, lasting 3 days.

I wonder if that has anything to do with this?

Research In Motion will shed around 2,000 employees this week, in yet another indicator of the company’s battered state.

In July 2011, RIMM fires 2000 people.  (RIMM is the corporation that owns BlackBerry.)  In October, their servers stop working.  Is it a coincidence?

It’s pretty obvious what happened.  RIMM fired 2000 people.  Did they fire the 2000 least qualified workers?  Did they fire the people who actually knew how to keep the servers running?

Suppose you’re a middle manager at RIMM, and you’re ordered to fire a subordinate.  Do you fire your friend?  Do you fire the guy who actually gets the work done?  Obviously, you fire the competent guy before your fire your friend.

If the middle management is able to distinguish between competent workers and dead weight, then firing people can boost profits.  When middle management is insane, the most skilled workers are the ones who seem like dead weight.

In a large corporation, the incentive is for a middle manager to do what’s best for himself, instead of what’s best for the whole organization.  Therefore, middle managers will fire competent workers before their friends, if they’re ordered to fire someone.

There is an important difference, between computers and the rest of the economy.  For other areas, you can coast off past success and get complacent.  For example, Coca-Cola would have to really make a huge mistake, to lose their market position.  Even if Coca-Cola’s management is unqualified fools, they get to keep their market share.  For computers and software, you have to keep improving or you lose customers.  There are many fewer barriers to entry in software, than in other areas of the economy.

BlackBerry’s management is content to coast off their past success.  They’re losing market share to the iPhone and Android.  BlackBerry’s management is acting like they have a monopoly, while they’re in a very competitive market.

That’s the problem with the economy.  If you fire a lot of people, you boost short-term profits.  However, you wind up firing the people who actually know how to make things work.  The incentive is to boost short-term profits, while destroying long-term value.

3 Responses to BlackBerry Outage – What Really Happened

  1. “Suppose you’re a middle manager at RIMM, and you’re ordered to fire a subordinate. Do you fire your friend? Do you fire the guy who actually gets the work done? Obviously, you fire the competent guy before your fire your friend.”

    Why would this be different in an Agorist society? I read an article where you said we shouldn’t go back to the Constitution, because it’s breed the current environment. Why should we go back to a society without a government, considering it breed the current society? What would prevent middle managers from being inefficient and firing good workers as opposed to their good friends?

    • There are several reasons that would not happen in an agorist/free society.

      First, large mega-corporations are only possible in collusion with government. In the present, a highly skilled manager can’t easily start his own business. In a really free market, the skilled manager would be managing his own business.

      It would be hard to organize a business bigger than the leader’s “monkey number” (200 workers), without support from the State. It would split into smaller businesses working together.

      Second, suppose that in business A, management only hires their friends, but in business B, management hires the best workers. Obviously, business B will rapidly bankrupt business A. In the present, State restriction of the market prevents a group of skilled workers from getting together and starting business B.

      In a really free market, corruption is punished by the market. In the present, corrupt middle managers don’t matter, because the corporation has a State-backed monopoly.

      Of course, if all your friends are awesome skilled workers, it’ll work out well if you only hire them. You’re severely restricting your worker pool, if you only hire friends.

  2. >Therefore, middle managers will fire competent workers before their friends, if >they’re
    >ordered to fire someone.

    I’ve seen this happen in a few different companies.

    Additionally the workers doing the most work may get fired first.

    I once worked for a famous tech company. About 10 of us were moved from one division to another. There was a huge scramble for everybody to get onto long term projects or easy jobs. A few people just had to add 1 line of code to every URL handler so a manager could compile statistics of which were the most popular pages. A far more through implementation of this was already available on a whole company level, rather than just for our group. The managers either ignored this or didn’t care.

    Of the transferred people I was the only one that got stuck doing “hard” front-line work. Whereas some people only did 1 project over the space of 1 year, I did about 6 different projects and had fix old bugs in the code or bugs caused by other people and groups. For months at a time I had to work weekends and evenings.

    It is very easy to get imaginary “dirt” on someone if they are doing loads of important work. It is difficult to get dirt on someone that hardly does anything or who only does work managed by friends or people in on the same game.

    The “dirt” they got on me was simply because a manager and his reporting employee wanted to get credit for a project they weren’t entitled to.

    Because I did so much work in so many different areas, the chances of encountering bad people were much higher. The fact that I had done 5 projects perfectly well before encountering these clowns was discarded. The fact that I had done 4 projects perfectly well after encountering these clowns was discarded.

    Do nothing ===> No dirt can be found on you

    Do lots and work hard ==> People want credit for your work or are worried that you have done work they should have done

    This explains why a couple of do-little people were left behind but three very competent workers were fired.

    Just to make things worse two fired, incompetent workers managed to get other jobs in the same company 1 – 2 years later!

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