4 of the Most Costly Business Blunders from all of History

June 2, 2017 Trends

It’s no well-kept secret that proper training is the only way to minimize the risk for mistakes at work to occur. When training isn’t done right, the results are immediately obvious. Misinformation is created, miscommunications can happen, an employee might do something wrong since they were never explicitly told not to—the list goes on.

Here are four examples throughout history that are the result of simple mistakes that have really cost companies.

4. Assumptions Cause Misunderstandings

It’s not every day we hear about Coca-Cola messing up in their PR and/or marketing, but even the greats slip up from time-to-time.

Coca-Cola’s water bottle brand, Dasani, is pretty well-known in the US and quite successful. Naturally, they tried to maximize that success by bringing the brand across the pond to try out the UK market.

The tagline they chose to serve Dasani to the UK public was, “can’t live without spunk” and the entire campaign referred to the product as “bottled spunk.” In the UK, the word spunk has a very different meaning than what Coca-Cola intended, and consumers don’t want to think about it as they’re trying to hydrate. Obviously, nobody on the Marketing team remembered to do their local market research before the product’s launch.

If that tagline wasn’t off-putting enough, Dasani was actually found to be contaminated with trace amounts bromate shortly after the product release. Just like that, Dasani’s chances of ever making it into the European market were recalled faster than the product itself.

COST OF MISTAKE: $9 million

 

3. Not Knowing Protocol Causes Riots

It’s not specifically a business blunder, but it is a great example of how important it is to make sure all relevant personnel are in-the-know.

A pretty famous happening in New York City back in the 70s was a power outage that took out the whole East Coast. In 1977, lightning struck the NYC Con Edison electric company 3 times. This alone should have crippled the facility, but the Great Blackout of 1977 could have been avoided with the right people knowing the right knowledge.

In order to prevent a city-wide blackout, the system operator at the time would’ve had to pull a series of levels quickly and in a specific order. However, the operator on duty didn’t know the levels had to be pulled in a specific order: so the first switch he pulled out of place plunged the city into 25 hours of electricity-free mayhem.

1000 fires were reported, 1600 stores were damaged in looting and rioting, and 3700 people were arrested.

COST OF MISTAKE: Estimated at over $300 million

2. Miscommunication can Invade Privacy

Now let’s travel in time again, ahead to 2006. Justin Timberlake was bringing sexy back after it left for a while apparently, and Pluto was about to be demoted and kicked out of our solar system. AOL was the fourth most-used search engine, and accidentally betrayed the privacy of more than 650,000 of their users.

For several months,  the popular search engine AOL compiled detailed search logs from a large number of their users. Supposedly, the log was intended for research purposes, however, one of AOL’s researcher’s published this log online. Publicly.

At the very least, the log had replaced their AOL usernames with random ID numbers, however, the log contained their search history, and search terms. Some of which contained terms specific to their location, medical history, there was even some evidence of serious crimes going on.

The worst part of it all was that this accident happened on a Friday. All this information was online for the entire weekend—giving the public more than enough time to copy the information for themselves, and were even able to identify some of the users based on their search results.

AOL immediately admitted their mistake, apologizing and firing the researcher responsible as well as his superior. Their reputation was ruined, they were served with a class-action lawsuit, and were forced to pay up to $5000 in for every person whose search data was exposed.

COST OF MISTAKE: $3.25 Billion

1. Breaking Protocol Causes Train Derailments

We’re ending this article with one of the most tragic results of insufficiently trained employees. In Lac-Megantic, Canada, 2013, a train carrying 2 million gallons of crude oil derailed and barreled right into the heart of the city at 65 mph. This train wasn’t even supposed to be running when this accident occurred. It was due to just one, seemingly small mistake that the train derailed.

Let’s start with what should have happened that night.

According to protocol, the train should be able to hold in place for as long as needed with only the handbrakes in place. After utilizing the handbrakes, the train’s crew perform tests to confirm that the handbrakes are functional and strong enough to do so. Once the tests are completed, the crew leaves the train to rest up for the night.

Now, here’s what actually happened.

The handbrakes were utilized that night, just like protocol dictates, however, the engineer also left the air brakes on. In other words, the train was held in place by both air brakes and hand brakes. This also meant that when the crew checked the brakes, they were unaware of the fact that the air brakes were also in place.

In the middle of the night, the air pressure in the train decreased to dangerous levels which caused the train’s brakes to give out totally. The result of the train crash was 47 people dead, 2000 people evacuated, and a city which will never be the same.

The organization responsible for operating the train (MM&A) was ultimately served with 47 charges of criminal negligence causing death.

COST OF MISTAKE: At least $15.3 million and a forever damaged reputation.

 

While these mistakes are some of the most costly throughout history, less impactful mistakes still happen all the time. Is your learning solution strong enough to stop misinformation and make sure your entire organization is in-the-know?

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