Halloween is upon us once again – and with it, an excuse to concentrate on the spooky, the scary, and the downright unpleasant.
It’s been a difficult few years for businesses around the world. Thousands of small businesses have had to navigate difficult economic waters, and many have encountered a steep learning curve.
But on this most ghoulish of days, let’s take a few minutes to remember some of the most dramatic business disasters of recent years – including a fittingly terrifying new development for Halloween 2011.
Few products say ‘corporate hubris’ quite like Dasani did. The Coca-Cola manufactured still water was pitched as being the “pure” option – but it was soon discovered that it was, in fact, straight out of a tap in Sidcup.
To make matters worse, in 2004 an investigation found that the water contained bromate, which it is expected may cause cancer. The terrible publicity garnered by Dasani in the UK persuaded Coca-Cola to call off the water’s launch in France and Europe.
Back in more innocent, pre-Lehman days, banks weren’t in the habit of failing. Meanwhile ‘rogue trader’ wasn’t a phrase in common parlance – but that was all to change with the collapse of Barings.
The bank, which had been operating since 1762, fell apart in ignominy after it was revealed that trader Nick Leeson had run up debts of more than £800 million. The bank imploded in 1995. Leeson went to prison – and now advises companies on corporate responsibility.
Ratners could be considered the ultimate lesson in bad PR. Gerald Ratner, head of the jewellery giant, has become synonymous with business disasters – because he was personally responsible for bringing his firm to its knees.
In 1991, Ratner gave a speech to the Institute of Directors in which he described the business’s products as “tacky”, “total crap”, and likely to have a shorter shelf life “than a prawn sandwich from Marks & Spencer.”
Entirely predictably, the speech caused £500 million to be wiped off the company’s share value. Ratner resigned, and the firm had to be entirely rebranded.
A painful lesson in product design, Betamax remains a cautionary tale for those in the consumer electronics industry.
We all know and love (or hate) VHS – but there was a time, in the mid-‘70s, when the format was in a life-or-death fight. Sony’s Betamax had a year’s head-start on VHS, but it eventually fell by the wayside. Why? Well, one of the main reasons was that each Betamax tape only had a recording capacity of 60 minutes – significantly less than most films.
Finally, with remarkable timing Bloomberg is reporting that MF Global has filed for bankruptcy. The derivatives business has been struggling with exposure to the European debt crisis, and has seen clients withdrawing their money and looking for other brokers.
Just a few days ago, management told staff that everything was fine at the company. Today, news reports tell a rather different story.