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What Were They Thinking? 8 Bad Business Decisions.

Posted by on May 23, 2012

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Bad Business DecisionsIn business, there are times when leaders and committees—armed with incomplete information or a poor decision-making process—simply make the wrong decision. In hindsight, of course, the mistakes seem obvious. Let’s take a look at 8 bad business decisions (in no particular order):

1. Turning Down the Beatles

In 1962, Mike Smith and Dick Rowe of London’s Decca Records decided not to sign the Beatles because, “…we don’t like your boys’ sound.” EMI Records eventually signed the group, which became the most popular band of all time. Ironically, later Decca ended up partnering with EMI because demand for Beatles records was so high they couldn’t keep up with it.

2. Rejecting the Telephone

In 1876, William Orton of Western Union decided not to buy the patent for the telephone, invented by Alexander Graham Bell. The patent was offered at $100,000 by Gardiner Greene Hubbard, a wealthy Bostonian who had helped fund the invention. However, Mr. Orton decided to respond directly to Mr. Bell saying, “…after careful consideration of your invention, while it is a very interesting novelty…it has no commercial possibilities.”

3. Lowballing Microsoft

In 1979, Ross Perot offered to buy Microsoft from Bill Gates for between $6 million and $15 million. Mr. Gates wanted between $40 million and $60 million. The two couldn’t come to a deal, so Mr. Perot walked away. Of course, today Microsoft is worth hundreds of billions of dollars.

4. Passing up The Cosby Show

In 1984, Bill Cosby gave ABC-TV first shot at buying The Cosby Show. ABC turned him down saying, “…viewers won’t watch an unrealistic portrayal of blacks as wealthy, well-educated professionals.” NBC swooped in, and over 8 wildly successful years—including 4 straight years at #1—The Cosby Show became the most profitable series ever broadcast to that point.

5. Failing to Improve the Model T

In 1908, Henry Ford launched the Model T: the very first model to come off the line at Ford Motor Company. It was so successful that Mr. Ford decided improvements weren’t needed—for 19 years! By the time the popular Model A was marketed in 1927, Ford’s market share had already been lost to companies such as Dodge and General Motors as consumers satisfied their hunger for something new and exciting.

6. Counting on Viral Marketing

In 2006, General Motors, in conjunction with the TV show The Apprentice, launched an internet-based viral video marketing campaign to promote their new Chevy Tahoe SUV. Unfortunately, consumers weren’t impressed. Hundreds of people used the campaign to air their grievances with the vehicle and the GM brand in general, accusing it of contributing to global warming, the war in Iraq, or simply disparaging the Tahoe’s quality.

7. Recycling Credit Card Info

Also in 2006 (a bad year?), as part of a paper recycling program, the New York Times Company inadvertently tops copies of The Boston Globe and the Worcester Telegram & Gazette with printouts showing the credit card information of 227,000 of their readers. Immediately sending employees door-to-door in a retraction campaign, they were only able to retrieve a small percentage of the recycled toppers.

8. Becoming Big Brother

In 2009, retail giant Amazon deletes George Orwell’s 1984 and Animal Farm from users’ Kindle devices after the publisher decides to pull the e-books “off the shelf.” Although refunds were issued, the deletion seemed to violate Amazon’s own Terms of Service. The move invites critics and consumers alike to compare Amazon with the “Big Brother” described by Orwell in the very same 1984.

Sources: CNET News, CNN Money, The Wall Street Journal, Time