Dumbest Moments In Business 2005
Grand Prize Winner, Dumbest Moment of 2005
Bubble Trouble "If you grew up in Danvers, and you remember it as the spooky place on the hill, it might not be the right place to live."
William McLaughlin, an executive with AvalonBay Communities, which is converting boarded-up Massachusetts mental institution Danvers State Hospital into a 497-unit complex of high-end apartments and condos.
That sound you hear? Not the ghosts of mental patients, but loud hissing from the wildly inflated housing bubble.
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Winner, Dumbest Moment, Digital Rights Management
The furor dies down, but only after Sony says that the real intent was to prevent the spread of the malicious Celine Dion virus.
Sony BMG installs software on its CDs "to prevent unlimited copying and unauthorized redistribution," but the software makes customers' PCs vulnerable to hackers and viruses. Software maker Internet Security Systems labels Sony's program malicious. Ultimately, Sony offers uninstall software and has to recall millions of albums, including On Ne Change Pas (One Does Not Change), by Celine Dion.
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Winner, Dumbest Moment, Investor Relations
We find your lack of faith disturbing.
Over the course of 2005, Overstock.com CEO Patrick Byrne issues increasingly shrill pronouncements about nefarious short-sellers driving the company's stock into the ground. After listening to an Overstock conference call with investors in August, Dallas Mavericks owner Mark Cuban posts to his blog a list of the topics Byrne covered: "Miscreants; an unnamed Sith Lord he hopes the feds will bury under a prison; gay bath houses; whether he is gay, does cocaine, both, or neither; phone taps; phone lines misdirected to Mexico; arrested reporters; payoffs; conspiracies; crooks; egomaniacs; fools; paranoia; which newspapers are shills and for who; money laundering; his Irish temper; false identities; threats; intimidation; and private investigators. All in 61 minutes." Cuban then short-sells 10,000 shares of Overstock.
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Winner, Dumbest Moment, PR blunders
Public Relations men, on the other hand, have a charming self-destructive quality.
Speaking at an ad industry event in Toronto, WPP Group's worldwide creative director, Neil French, says there aren't more female creative directors "because they're crap" and they eventually "wimp out" and "go off and suckle something." French speaks from a stage decorated as a hunting lodge while being served drinks by a woman in a skimpy maid's outfit, of whom he asks, "Could you lean over a bit more?" Two weeks later WPP accepts French's resignation.
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Winner, Dumbest Moment, Advertising Bummer.
But we're still going ahead with the "Schindler's Shopping List" campaign, right?
Fighting a proposal that would limit superstores in Flagstaff, Ariz., Wal-Mart signs off on an ad in the Arizona Daily Sun that asks, "Should we let government tell us what we can read? Of course not ... So why should we allow local government to limit where we shop?" The ad is illustrated with a vintage photo of Nazi supporters throwing books into a bonfire. Wal-Mart later apologizes, saying it had not appreciated the photo's "historical context."
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Winner, Dumbest Moment, Security May I see my ID?
In February, ChoicePoint -- the self-proclaimed "leading provider of identification and credential verification services" -- admits that it sold the personal data of 145,000 people to a number of unauthorized recipients, including an identity-theft ring in Los Angeles. ChoicePoint thoughtfully offers the victims a free credit report -- but still makes them pay to see the detailed information that was provided to the criminals. The incident kicks up an identity-theft furor serious enough to draw congressional hearings; the company later reports the incident cost it $21 million.
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Winner, Dumbest Moment, Outsourcing
Told you we shouldn't have rented that list from the Department of Homeland Security.
Blaming a mailing-list vendor for providing bad information, JPMorgan Chase apologizes for sending a form letter about its credit card services to an Arab American man in California addressed to "Palestinian Bomber."
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Winner, Dumbest Moment, Accounting
The irony is rich. Shareholders, alas, are not.
In June, H&R Block announces a review of its recent financial statements, estimating it will find discrepancies in its favor of about $19 million. Two months later it reveals that the review found $77 million in errors -- in the other direction. The company explains that it had "insufficient resources" to identify and report complex transactions in its corporate tax accounting.
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Winner, Dumbest Moment, Travel & Entertainment
Let's see, that's 752 rum-and-Cokes, 363 orders of buffalo wings, 2,000 lap dances ...
In October, American Express sues Savvis CEO Robert McCormick for $241,000 in charges he racked up on a visit to New York strip club Scores. Savvis places McCormick on unpaid leave after he admits to the visit but claims that he charged less than $20,000. He later resigns, accepting more than $600,000 in severance but forfeiting almost $3 million in preferred stock.
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Winner, Dumbest Moment, Marketing
No joke here. Just suffice it to say that the literal translation of the Spanish word cajeta is "little box."
With the help of Latin pop sensation Thalia Sodi, Hershey introduces Cajeta Elegancita, a new candy bar for the Hispanic market. Though the wrapper features a picture of Sodi, apparently she neglects to fill her Yanqui partners in on a subtlety of Spanish: In Mexico, "cajeta" can be used to mean "nougat."
Elsewhere in the Spanish-speaking world, however, it's slang for female anatomy.
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See all 101 Moments at Business 2.0.
Jim on 01.26.06 @ 04:37 PM PST [link]
