So Aviva, the global insurance giants, managed to send an email sacking 1,300 staff in error (1). Not a clever thing to do and certainly got great publicity but, at the end of the day, human error on the part of one person for which the corporation as a whole canâ€™t really be blamed. Whatever your opinion on this it was still pretty funny provided you werenâ€™t one of the people who got the email presumably! But it got me thinking about some of the best corporate blunders over the years, and there have been many.
Back in the 1990â€™s Quaker Oat Company was proving pretty successful in their chosen market of dry foodstuffs. This led to them deciding to branch out and buy the Gatorade sports drink franchise. When this went well for them they got confident and bought the trendy bottled tea maker Snapple for $1.7 billion. And it was at that point was when Quaker discovered to their horror that unlike all their other products Snapple beverages required refrigeration. And Quaker had a massive fleet of exactly zero refrigerated vehicles with which to distribute Snapple. Distribution companies, being no fools, learned this and priced accordingly meaning that the marketing and R&D budgets were exhausted in the wrong place. Quaker eventually sold Snapple for $300 million. (2)
For their 2002 Martin Luther King Day celebration, the Lauderville, FL Chamber of Commerce invited actor James Earl Jones to appear as a featured speaker. As thanks, they commissioned a plaque featuring African Americans from the US Black Heritage postage stamp series. They went to local promotions company AdPro Specialties, who subcontracted the job to Texas-based Merit Industries. Merit faxed AdPro a list of 15 African American stamps to choose from, and promised to handle all the details. Four days before the celebration, AdPro received the Black Heritage plaque, and were stunned to see that the plaque thanked not James Earl Jones, but James Earl Ray, Martin Luther Kingâ€™s assassin. Merit blamed its near-illiterate employees for bungling a rush job, while AdPro repaired the plaque locally. (3)
When faced with striking workers at their Chicago factory, the brains behind Schwinn Bicycle decided to outsource their manufacturing to Taiwan, choosing the Giant Bicycle Company as the ideal suppliers. And why not? Since bicycles are a technologically very simple, labour is the highest cost, and Giantâ€™s workers were the cheapest anywhere. For Schwinn, the Giant deal worked so well that when the strike ended, they continued outsourcing to them. What a shame that no one at Schwinn thought about getting any sort of â€śnon-competeâ€ť clause into the contract. Because Giant learned everything about Schwinn bikes and then sent sales reps to every Schwinn dealer in the US telling them that they made Schwinn bikes and could provide them for 30% less. Unsurprisingly, the dealers went to Giant. Schwinn tried to rescue something from the wreckage proposing a joint Schwinn-Giant brand but they had nothing to offer Giant who were already selling 300,000 bikes a year under its own name. Schwinn declared bankruptcy in 1991 and today the brand is a shell of what it once was. Giant continues its uncontested reign as the largest bicycle manufacturer in the world. (4)
At a National Amusements cinema in Holtsville, N.Y., an audience settled in to watch the family film â€śThe Last Mimzyâ€ť. What they got instead was the opening scene from â€śThe Hills Have Eyes 2,â€ť in which a chained woman gives birth to a cannibalistic mutant. Having seen â€śThe Last Mimzyâ€ť I wouldâ€™ve considered this an improvement but the watching parents didnâ€™t. (5)
The oldest tale, though I canâ€™t quote any reliable source on this one, is that in 1876, Western Union had a monopoly on the telegraph; at the time the worldâ€™s most advanced communications technology. This made it one of Americaâ€™s richest and most powerful companies. So when Gardiner Greene Hubbard, a wealthy Bostonian, approached them with an offer to sell the patent for a new invention he had helped to fund, this was treated as a joke. Hubbard was asking for $100,000! Hubbard was bypassed and a response was sent directly to the inventor; Alexander Graham Bell. â€śMr. Bell,â€ť they wrote, â€śafter careful consideration of your invention, while it is a very interesting novelty, we have come to the conclusion that it has no commercial possibilitiesâ€¦ What use could this company make of an electrical toy?â€ť This was, of course, the telephone.
Corporate mistakes are nothing new but in these days of fast, global communication you really canâ€™t afford to make many of them.
(2) â€śTriarc to buy Failing Snapple Business from Quaker Oats for $300Mâ€ť, Oklahoma Journal Record, April 3, 1997 AND â€śThe Dumbest Moments in Business History: Useless Products, Ruinous Deals, Clueless Bosses, and Other Signs of Unintelligent Life in the Workplaceâ€ť by Adam Horowitz
(3) â€śJames Earl Gaffe has a plaque maker for Lauderville in Retreatâ€ť, The Miami Herald, Jan 17 2002 AND â€śMix-up has plaque honouring accused MLK killer instead of black actorâ€ť, South Florida Sun-Sentinel, Jan 15 2002
(4) â€śNo Hands, The Rise and Fall of the Schwinn Bicycle Company, An American Institutionâ€ť, by Judith Crown and Glenn Coleman, 1996
Article by Rob James
Category: Light Relief