Service of Bad Business Decisions

June 2nd, 2010

Categories: Business Decisions, Timing

bigbusiness

When a small business owner hears that a bigger business has made an obviously bad decision, it doesn’t feel good, but it helps put things in perspective when aggravating little glitches occur.

bigvssmallbusinessBig business or little, quarterbacking after the fact is the easiest thing to do – like in the BP oil leak fiasco – even so it does seem inconceivable that a company, as huge, as experienced and as reputable as BP, had no viable contingency plan to address potential disaster in something as fraught with risk as deep sea oil drilling, yet still went ahead and drilled.

But then who am I to talk? I lost a bundle when I didn’t sell my AIG stock when rumors spread about its possible insolvency. A respected advisor told me, “It has a tremendous franchise, and is too big and diverse to fail.” So this small business owner made a big mistake, but only her family suffered-nobody else’s.

thingsgowrongThe only good that is likely to come out of these bad mistakes is that they should serve to remind us to be on our guard. Let’s face it things do go wrong!

Not all business decisions are as bad as BPs [or mine about AIG], but some show incredible short sightedness and are so obviously unnecessary. Some board members met after work at a hotel bar in midtown Manhattan a few months ago. The quiet space is on the second floor of a place that’s far from a household name either for New Yorkers or most tourists. It offers no skyline view and there’s nothing spectacular about it other than it is comfortable, centrally located and mostly empty. The cash register must have rung happily that night between drink and snack orders for 20. We were told when we made a reservation for a second gathering that it would cost us $500 on top of the price of what we ordered. This is NYC, folks, with zillions of bars that welcome our business. Our reaction: “Fahgedaboudit” as native New Yorkers would say.

And who, at a company with a stellar reputation like Johnson & Johnson, would approve substandard manufacturing practices for infant and children’s meds leading to a recall and Federal investigation? The plant is in the US, in case you aren’t following the story.

My last example relates to museum security. Perhaps you saw the piece in The Wall Street Journal by Ulrich Boser, “This is No Thomas Crown Affair.” The inspiration was the recent robbery of five paintings at the Musée d’Art Moderne in Paris. Boser wrote, “The museum had been about as secure as a woodshed. The alarm system had been malfunctioning for almost two months, and replacement parts had not yet arrived,” and he noted “…many museums have not done enough to protect their collections, and art crime has become one of the world’s largest criminal enterprises.”

It’s a shame that some people feel that what’s mine is mine and what’s yours is mine, but we know that they do, so if you are in the museum business, one of your responsibilities is to protect the art as a bank protects the safety deposit boxes and cash in house and adults protect the children in their care. So who made the decision to buy another artifact or picture when the budget should have gone to keep all the works out of the hands of thieves?

What are some blatantly bad business decisions that you’ve noticed or read about and what is your reaction?

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10 Responses to “Service of Bad Business Decisions”

  1. Linda Said:

    On Mother’s Day this year my Mom received a rather dead flowering plant from my brother. I am sure he didn’t order a dead plant from 1-800 Flowers and would be embarrassed to know that my Mom’s gift was not perfect. I suggested to my Mom to call 1-800 Flowers, as I was sure they would correct the problem.

    When she called they said they were out of stock on the plant (sure they were all dead) so they could not replace it, but instead would issue my brother a full credit. That seemed ok and reasonable enough. So, my Mom was forced to tell my brother his gift was dead on arrival, and he should be expecting a credit.

    When no credit arrived on his credit card statement, my Mom called 1-800 Flowers again, and they said that they would instead give my brother 15% off on his next order. His NEXT order? How ridiculous to think he would order from them again when the last order was not filled properly!

    So, in that STUPID bad service business move, they lost my family as customers and hopefully many more by my posting this.

  2. Jeanne Byington Said:

    Linda,

    So sad, a semi-good business decision–like you, I didn’t love that they made your Mom the ham in the sandwich by having her report a problem with her gift to her son–replaced by a bad one that was far too small, in any case, as well as in the “heads we win, tails you lose” style of business.

    This is a terrific example, though I am sorry it happened.

  3. Anonymous Said:

    I tried to order a fruit and cheese basket from a nationally-known company that specialized in fruit. Although I had a basket chosen from their catalog they tried to sell me a different, particularly festive item with a plastic, smiling, hat-wearing turkey in it. I explained that the basket was a sympathy basket–it was for a family grieving the loss of a wife/mother. The order taker sounded perplexed so I had to explain why festive and cute wouldn’t do and explain why I wasn’t sending flowers (the deceased was a gardener and cut flowers would make the family sad especially once the plants started to die. Add to that that there were religious customs which would have made flowers inappropriate.)

    After much conversation, the order taker said that the order would take a week to deliver and that they were adding a “rush” fee. It wasn’t a big fee–it was more than $5 and less than $20–but I thought it was nervy. I told them I wasn’t going to pay for a “rush” fee when the USPS could deliver it quicker. They went on to say that because I was ordering on a Thursday they wouldn’t be able to get the order out until the next week. So I’m supposed to pay a rush fee because they can’t rush the order out the door? And what does Thursday have to do with anything?

    I said, “No thanks” and called my local florist. She wired the order to a fruit company 20 miles away–near where it was to be delivered on Saturday–no rush fee, no waiting a week, no festive/offensive/tacky basket. That was 10 years ago and I haven’t placed an order with the nationally-known company since, although they had the nerve to put me on their mailing list.

  4. Jeanne Byington Said:

    Oh, my, speak about not listening to the customer, creating hurdles for no reason and missing the opportunity to keep a generous, lifelong customer.

    Some of my best clients have been giant corporations so that size doesn’t affect the quality of a decision. If a local florist could easily fulfill your simple request—and you are obviously articulate–I would think a large company might do so in a snap. It appears that the company wanted to make money not from what they were allegedly selling but from add-ons. Grrrrr.

    Thanks for the excellent example.

  5. Lucrezia Said:

    If I knew the first thing about making good business decisions I would not be living in Mount Kisco. But then, there are those much worse off out there. One sees them living on street corners, hat in hand.

    I am not qualified to discuss corporations such as BP or 800 Flowers, but observing a general bad hat attitude and contempt for the public, it seems clear that these and many other such entities are sorely in need of better management, starting from the top.

  6. Jeanne Byington Said:

    Lucrezia,

    One of the points asked management, according to articles about the lack of care taken in manufacturing infant and children’s meds at the Johnson & Johnson division responsible, was whether cutbacks and the economy might have caused the lack of oversight. “No” was the resounding response. There were questions about metal in the pills as well as pill strength and other serious issues.

    I have never run a big business so I, too, am hardly qualified to pontificate [though that doesn’t seem to stop me]. But I feel that as soon as management loses sight of the focus and purpose of the company it runs, whether that is to make safe, clean drugs for infants and children, produce attractive and fresh fruit baskets shipped in a timely manner for a range of occasions or ship vigorous plants that will please the recipient and make the giver feel they chose well, they should toss in the towel.

  7. Lucrezia Said:

    No one tosses in the towel since there are too many sheep waiting to be fleeced, and it pays. Forgot to mention I got stung by the 800 Flowers light years ago, when sending a get well gift. I was too busy to grouse, but have not used them again.

    The sheep line up, and they continue to flourish. The only way to make any of these large companies sit up and listen is to sue and win, but for that one had better have the clout of a Buffet, Gates or Trump. It’s also possible to win via ability to get the media to start whining on ones behalf, but that’s opening a totally different can of worms.

  8. Jeanne Byington Said:

    Lucrezia,

    Social media helps spread the word when customers are disgruntled, a tool that can be more effective than a law suit which is time consuming, expensive, energy-leaching and the last recourse rather than the first, the first being what you did, which was to never use them again.

  9. Jeremiah Said:

    We have had ghastly service from the telephone company ever since the courts broke up the old AT&T several decades ago. Most recently the phone was down for a week after being down for another week or more just a couple of months ago. Talk about bad business decisions! That judge who made the original ruling ought to have been tarred and feathered, and run out of town on a rail.

    Between bouts of anger, frustration and self-pity, I suddenly thought about what it must be like to have to run a telephone company in today’s world. What a horrible job it must be! With technology run amuck, you sell a service that uses obsolete delivery systems, wires; has a rapidly declining and enraged customer base due to competing communications systems, like cable and satellite, not to mention computer companies; an entrenched work force due to the political clout of unions; can’t raise prices, again for political reasons, and will be a forgotten memory in just a few years. I feel sorry for the poor man!

    I also feel sorry for mankind, what a horrible world it will be when the only people capable of communicating with one other will be those few who are technological geniuses. The rest of us will be silent, perhaps, if we are lucky, put out in a field each morning to graze on ferns and acorns and taken back to our stalls in a barn at night. And if we are incapable of producing milk, we’ll no doubt be shunted off to the glue factory.

  10. Jeanne Byington Said:

    Oh, my, Jeremiah–what a gloomy world you envision.

    What happens during revolutions, which we are in where technology is concerned, is a feeling of uncertainty and confusion. I don’t know about you, but I don’t want to buy many of the gizmos out there because I fear that the second I do, the one I select will be on the cutting room floor and just as I’ve gotten the hang of it–or finished paying for the thing–it will be obsolete, or not the gizmo of choice of millions so dropped by the manufacturer and no longer of use to download books, say, or updated maps or any applications I’d be interested in.

    I clearly remember how things worked when AT&T was IT. They did–work that is. And if they didn’t, they’d be fixed in a flash. Or is my shared frustration such that I also see red with developments in getting phones repaired today and my memory is painting life with AT&T in rose?

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