Cable companies are a good example. Not only is their customer service poor and their business practice generally sleazy, but they’re generally granted local monopolies by government, so they really can do a shitty job and stay in business – if you want to compete with Time Warner, you pretty much need to launch a satellite into fucking outer space just to get in the game.
I think Greyhound does a passable job considering, but it sure is an unpleasant experience riding with them, and I’ve seen more than a few bonehead moves from Greyhound employees.
I agree that AIG was pretty incompetent, maybe the worst. But I would like to nominate Tishman-Speyer, a large real estate company in NYC that just went bankrupt after paying 5.4 bevabucks for Stuyvesant Town/Peter Cooper Village in Manhattan. My daughter lived there until the sale, paying fairly expensive rent, but getting good service and maintenance. After the sale, the new company tried to raise her rent by about 50% and they said they were expecting to triple rents in five years. Well, four years later they cannot make the mortgage interest payments and are mailing the keys to the mortgage holders. See http://www.nytimes.com/2010/01/25/nyregion/25stuy.html?ref=nyregionsurprisingly. Even without the real estate slump (which has not affected NYC rents noticeably) their business model of tripling rents in five years was insane.
But that happens so much in the corporate world it’s a industry flaw not one particular thing.
Look at Madonna her “Like a Prayer” video for Pepsi (I think). It aired once and she got all those millions
Or Mariah Carey is another one. She made one horrible album and her label dropped her after a huge payout for nothing and she then went on to be just as big as she was before.
ABC did this in the 70s, with Redd Foxx, Damon Wilson, Nancy Walker, Jimmy Walker, offering them huge sums to walk away from their shows or to get them not to try hard to get their contracts at NBC and CBS renewed. Then all their shows got axed quickly
Look at all the CEOs that get million dollar severence packages. You can find a CEO of a company that goes bankrupt and he gets hired by another company for the same salary.
Salaries in corporate world aren’t really based on accomplishments but on what you expect from others.
I’d say the tobacco companies. They managed to develop a product that hooks its user for life (a GREAT business plan), but then kills the user (bad follow-up.)
I think too many people are confusing poor customer service with corporate incompetence. If you can get away with it and remain in business, that’s not incompetence. Incompetence means going out of business. To me, the epitome of incompetence is a company like Blockbuster. They’ll likely close up shop this year. A core competency of corporate management is to have a sustainable growing business. This means looking at your competition and into the future to insure that you have a viable business model. Blockbuster was way ahead of everyone in video rentals. They dropped the ball in letting Netflix jump ahead of them in the on-line rental business. They compounded the problem with stupid promotions to try to beat Netflix. They blew the VOD business. Total incompetence.
Having had a peripheral relation to Corporate GM over the years, I nominate GM.
While Toyota and Honda were giving the world the hybrid car, GM was spending millions to develop…the Aztek.
Of course in 2000, GM also made one of its finest moves ever. They acquired a 20% stake in an unprofitable Italian carmaker AND gave the Italians and option to force GM to buy the whole company. It wasn’t enough to have a lousy US car business, they needed to add a lousy Italian car business as well. That cost GM a couple billion in ransom money to get out of the put option with Fiat.
As consumer confidence faded in the wake of 9/11, GM had the brilliant idea of offering cars at the employee price. That ended soon afterwards that selling cars at the cost to build them was not a viable business model.
A friend of mine had to spend a few days in Detroit where everyone in the office was wearing buttons with something like “30 in 03” or something like that. The meaning of the phrase was that GM wanted 30 percent market share in 03. They didn’t want to build a profitable car or a good car, they just wanted to sell lots of them.
By the time the suits in Detroit figured out that hybrid cars were popular with the public, GM did what they always did…They half-assed it. GM had a pickup truck with a “mild hybrid” that saved all of 10% on fuel.
After spending billions of shareholder and taxpayer dollars, GM truly succeeded in replicating a Soviet company here in the United States. They had a company that built something that no one wanted to buy. And unlike Chrysler which had its flirtations with Daimler-Benz, GM did this all by itself.
Nitpick: Tishman Speyer didn’t go bankrupt. The partnership they set up to buy that apartment complex voluntarily gave up control. Tishman Speyer did lose money, but it’s limited to $112 million. (Now, that would be a lot for you or me, but to them, it’s really not a lot.)
Yep, they were able to con lots of other groups including CalPERS and the Church of England into investing in it. It may be evil, but in terms of spreading the risk around, they were quite competent.
I’ll nominate Bethlehem Steel, having worked (in a peripheral sense) for that outfit in the 1970s. Top-heavy with disengaged managers? Check. Treat its own employees as the enemy? Check. Profligate spending with no return to show for it? Check (for just one example, they blew something like $68 million on a new electric furnace at the Johnstown, PA plant, then abandoned the whole project weeks before completion). Went from one the largest employers in the country to bankrupt and all assets abandoned or liquidated in a decade? Check.
I recognize the pressures of foreign competition and restrictive union work rules (that the company nevertheless agreed to), but c’mon. It’s not like no one uses steel any more.
An old story of corporate incompetence I thought I’d share.
Wargaming is a small niche hobby. Sort of like model trains or stamp collecting. Back in the seventies was its highpoint. The biggest company at that time was called SPI (Simulations Publications, Inc). Among its other products, SPI published a magazine called Strategy & Tactics, which was sort of a flagship magazine for the hobby.
Now TSR (Tactical Studies Rules) was another gaming company (they’re the guys that did Dungeons & Dragons) but they were a role-playing game company and SPI was a board gaming company. Obviously the two businesses are related but the two customer bases are fairly distinct. To use the analogy I made above, think stamp collectors and coin collectors or model train fans and RC plane fans.
So TSR saw there was this big market, that was very similar to their own market, and decided it would be a good move to expand into that market. But rather than develop their own board gaming department, they thought it would be a lot better to acquire an existing board gaming company. And SPI was available - the company had some bad business decisions and was deep in dept. TSR did some slightly shady maneuvering and ended up owning SPI and all its assets.
But now TSR did something really stupid. It looked over the financial status of its new assets. And one of the things it noticed was that all of the money people had paid to subscribe to Strategy & Tactics had been paid to SPI but now TSR was supposed to deliver the magazines. They decided to save some money - they announced that SPI’s Strategy & Tactics was essentially a different magazine from TSR’s Strategy & Tactics. The subscribers had paid for SPI’s magazine which had now ceased publication (no refunds were offered because that was a dept swallowed up in SPI’s bankrupcy).
So having started out with a bang by hosing all of the Strategy & Tactics subscribers, TSR set out to study their new market. And they found out something that unsettled them. As I said, wargaming is a small niche hobby. The vast majority of people buy no wargames ever. The entire hobby is supported by a few thousand people who essentially buy all the wargames that are sold.
And 75% of all wargamers had been subscribers to Strategy & Tactics.
Six Flags. They were in the business of fun. And as such, their job was to make things enjoyable as possible.
Yet everything about them tried to suck all the fun out of being in their parks. They overcharged for everything, refused to allow anyone to bring any food into the park (I know of a case where a student who was performing there with his school choir was told to toss out his lunch, despite the fact he didn’t have any money with him to buy anything), and generally made sure that any visit was as annoying as possible.
I saw this first hand when they took over the Great Escape, turning a nice amusement park into a chore. No more free parking. Fewer deals. No more picnics (the park prided itself on allowing people to bring coolers in).
Then there was their marketing. A few years ago, Six Flags realized that they appealed mostly to teenagers, which put them at a disadvantage compared to parks like Disney, which appealed to all ages. They vowed to make themselves over as a family-oriented park.
So what did they do? Stressed the roller coasters – which appeal primarily to teens. Had a bunch of cryptic and “edgy” ads – that appealed primarily to teens (did they really think parents would let their younger kids go a place whose ads featured a creepy old man?).
Six Flags declared bankruptcy last year. The economy didn’t hurt, but considering they burned through whatever good will they had and aimed their ads at the group they didn’t want to appeal to, it’s clear that their own incompetence was a major factor.
Six Flags also has the dubious distinction of being one of the best=financied and worst-run amusement park companies anywhere. Amusement parks usually don’t last that long. They maybe stick around for 50 years (Disney being the most prominent exception, because of its commitment to innovation, rebuilding, and development). After that much time, rides are old and often completely out of date, the facilities are messed up, and it’s no longer in anything like a good location.
Six Flags loved to buy these up, slap a new coat of paint an maybe a couple new rides, and then expect the parks to succeed. They didn’t.
Dell also failed on a whole 'nother level than what was previously posted. It’s not just their quality. They staked their entire business model on screwing their suppliers (so that they pissed off the entire industry supplier base) and having rapid response. They then got caught with their pants down as the slowing technical development and dropping costs basically put computers into the same category of stuff as TV’s: a cheap, nearly-standard commodity.
No, and even when they took over successful parks, they screwed it up. I saw the Great Escape – which was in pretty good condition when they took it over – get turned into a place that was actively unpleasant to its customers.
Basically, no one ever left a Six Flags park thinking, “Gee, the people here were so nice to us.” Everyone leaves Disney thinking that.
If you include universities, I’d go with Penn State. Yes, I know it’s a good university with much to recommend it. But their overemphasis on sports in general and football in particular tends to have a polarizing effect: Either you love Penn State and watch all their games and your car is festooned with blue and white paw-print magnets and you named your oldest daughter Nittany, or you wish you lived somewhere else and would sooner die than go to State College.
But the reason I bring them up is because of their takeover of the Dickinson School of Law, which happened several years ago. Penn State decided it needed a law school, so instead of developing their own and using the Penn State name to attract donor dollars and talent, they bought out Dickinson. Then Graham Spanier had a brain fart and decided that Dickinson needed to be in State College, which pissed off the alumni, of whom there are many. Spanier eventually announced that some classes would be in State College and others would remain at the original Carlisle campus, which alienated potential students who didn’t want to go between Carlisle and State College when they could live in Pittsburgh or Philadelphia year-round. It also cost some real money when some alumni stopped giving. As far as I know, Dickinson will remain in Carlisle, but I don’t know if any decision has been made as to offering courses in State College.