Biggest Business Mistakes You Can Learn from Major CompaniesBiggest Business Mistakes You Can Learn from Major Companies
Bigger isn’t always better. Although large companies can bring a lot more muscle to bear to face their problems, they’re not as adaptable as small ones. Worse, they can fall prey to the kind of thinking that sank those too-big-to-fail banks at the outset of the financial crisis: that they’re invincible, and don’t need to stay as vigilant or as vital as others.
As a smaller, leaner company, there are plenty of things you can learn from the lumbering mistakes of the big guys. Here are a few of the biggest teachable moments.
- Not being on the same page with your collaborators
Teamwork makes everything better – except when you don’t share information properly. NASA and Lockheed Martin – both organizations employing some of the most finely tuned minds in the world – infamously tanked a $125 million project when the Mars orbiter they were co-designing was lost. The reason? One of the teams used the metric system, the other imperial – and nobody converted them properly. It’s a good (and expensive) lesson in effective communication.
- Trying to downplay a problem to save face
During a crisis, big companies tend to show overconfidence by brushing off criticism and downplaying the significance of the problem. This has a disastrous effect on your reputation, since the public (and shareholders) lose faith in your credibility. BP found this out the hard way when, in the aftermath of their oil spill in the Gulf of Mexico, company spokespeople gave the wrong figure of how much oil was leaking into the ocean – 1,000 barrels a day when it was actually 5,000. And when they corrected, they did so disingenuously, saying it was ‘between 1,000 and 5,000.’ This cost them a great deal of public trust, and is an example of how important it is to be transparent during a crisis.
- Missing an opportunity
In the nineties, Google’s founders were looking for a buyout. They approached a successful competitor, Excite, and made an offer: $1 million for the whole company. In negotiation, they even brought the price tag down to $750,000. Excite turned them down. Twenty years later, Google is worth $340 billion, and no one’s ever heard of Excite. It’s an important lesson to strike while the iron’s hot. When an exciting opportunity comes along (pardon the pun), don’t hesitate. Game-changers don’t come along very often.