The world of business is rife with risk. No one would doubt that. We all know that in order to make a profit, you’ve got to take a chance. Sometimes, the business world can deliver a devastating blow seemingly from nowhere. In reality many times businesses bring it upon themselves, other times they are merely victims of circumstance.
Here then, are a few examples of some all-time OMG moments in the business world:
The Tylenol scare
There’s a very good reason why much of our medicine today comes in tamper proof bottles. Back in 1982 seven people died after taking pain-relief medicine capsules that had been poisoned.
These poisonings involved Extra-Strength Tylenol capsules, manufactured by McNeil Consumer Healthcare, which had been laced with potassium cyanide. The incidents created a nationwide panic and eventually led to reforms in the packaging of over-the-counter substances and to federal anti-tampering laws. Amazingly, the case remains unsolved and no suspects have been charged.
Stock market crash – 1929
A massive drop in value of the stock market helped trigger the Great Depression which lasted until 1939 when the increased economic activity created by the second world war got the U.S. economy back up on its’ feet. The Great Depression had devastating effects in virtually every country, rich and poor. Unemployment in the United States rose to 25% and in some countries rose as high as 33%. As if a financial calamity wasn’t bad enough, The United States had to endure the Dust Bowl years from 1930-1936. During this period a million acres of farmland across the Plains become worthless due to severe drought and over farming.
If it ain’t broke
For some unknown reason in 1985 The Coca-Cola Company sought to replace its flagship soft drink, Coca-Cola with a new formula called New Coke. It was rolled out with much pomp and publicity but to the chagrin of Coca-Cola executives, the new drink was a dud. Public reaction to the change was devastating, and the entire campaign quickly entered the hall of fame for major marketing flops. I mean you would have thought that all of this was over something much more important than a soft drink. Go figure.
Bringing down one of the ‘Big 5’
The Enron scandal turned into the indictment and criminal conviction of one of the Big Five auditor firms, Arthur Andersen on June 15, 2002. Subsequently, the firm ceased performing audits and began unwinding its business operations. The Enron scandal was defined as being one of the biggest in U.S. history. Arthur Andersen was found guilty of obstruction of justice for destroying many of the emails and documents that were related to auditing Enron. From this incident alone almost 100,000 employees lost their jobs. In one fell swoop Arthur Andersen ruined it’s credibility in an industry where trust is critical. With its’ image damaged beyond repair, it was never able to come back to its original operating capacity.
Cleaning more than carpets
While still in high school, Barry Jay Minkow founded ZZZZ Best (pronounced Zee Best), which for all the world appeared to be an immensely successful carpet-cleaning and restoration company. I remember reading about this guy while I was in high school. I thought how brilliant he must be and I wondered if I could ever be as successful as he.
The truth is that it was actually a front to attract investment for a massive Ponzi scheme. It all came to a head in 1987, costing investors and lenders $100 million.
After being released from jail, Minkow became a preacher and a fraud investigator. He even spoke at schools regarding business ethics. This too came to an end in 2011, when he admitted to helping deliberately drive down the stock price of homebuilder Lennar and was ordered back to prison. What’s that old saying about a leopard changing his spots?
Can you think of some other all-time 'OMG' moments in business history?