Business aren’t infallible. CEOs tend to make as many mistakes as any employee of a company. Some of these mistakes, though, can be rather costly. These errors in judgment may have cost companies millions–or even billions.
Years ago, Google was in trouble. They had, shockingly, arrived too late on the search engine scene, and they struggled with their competitors. So founders Sergey Brin and Larry Page began looking to sell Google to a company called Excite. And CEO George Bell, when offered Google for $750,000, said no.
Depending on how you look at it, this was a very good move for Google and a very bad move for Bell. In the following years, very, very few search engines can stand up to Google. Their name has even entered our lexicon as a synonym for “to look up.” And Excite is nowhere to be seen.
Monday Night Football
In 1970, NFL commissioner Pete Rozelle came up with a weekly TV program we now know as “Monday Night Football.” He offered the chance to air weekly football games to CBS and NBC, two of the three biggest networks. But both of them balked. They didn’t dare move their popular programs, like The Doris Day Show, off of Monday night! That would be a ridiculous move!
ABC, however, didn’t think so. They took a chance on the NFL. Now, over 10 million viewers tune in on Monday Night Football. Granted, it’s now on ESPN. But for a long time ABC couldn’t help but enjoy their wins while CBS and NBC made quite the fumble.
J. C. Penny is not Apple
Ron Johnson came to J. C. Penny in 2011, hoping to breathe new life into the company. Johnson had wild success with Apple stores, and hoped to use some of those same tricks on the big chain. He began by removing the coupons and sales under the claim that these were “fake prices,” trying to be more “real” with their customer base. This would work with Apple products. But, unfortunately, J. C. Penny is not Apple.
J. C. Penny customers liked the feeling of saving money. Buying from this store, unlike Apple, is not a status symbol. People who shop at J. C. Penny generally look for deals that fit in their budgets, rather than shiny trinkets. And the younger generation wasn’t having it, either. They were going to online businesses, like Amazon.
The board swiftly discharged Johnson. Johnson still believes this model would have worked had the company kept him on. However, this is not likely, as the company’s stock has fallen by 85% since then.
What can we learn from these companies? One, that no business is perfect. Every company will make mistakes. Second, it’s important to learn that sometimes, risks are worth a second look. You may want to take them. Or, in the case of trying to change your model drastically, perhaps you should avoid them.