“What has been the best corporate Darwin Award? A decision made by a company that basically killed the business.”
George Lucas wanted X salary to direct Star Wars. The studio thought it was too much. Of course they thought the movie might make money, but they didn’t really think it would become the powerful franchise we know it today. So George said “I’ll take a pay cut of $20K, if you give me all the merchandising rights”. Those rights were part of the $4 billion that Disney just paid him for Lucasfilms. Fox lost billions over several decades, in order to save $20K back in the 70’s.
[AS: My comments– sure Fox lost money, but it is still in business]
Eddie Lampert, the CEO of Sears is one of the best contenders for the Corporate Darwin Award. He’s an Ayn Rand-loving, free-market ideologist who attempted to take his non-reality-based style of life out of the lobbyist/Congress rigged world of hedge funds and into retail. He laid off, cut, and trimmed back everything he could and forced departments, managers, and employees to fight against each other for resources and pay under the delusion that the company would benefit from a survival of the fittest atmosphere. Since that time, Sears has lost half its value in five years and has closed more than half of its stores, not to mention just about destroyed one of the oldest and most trusted brands in the history of the United States.
[AS: He hasn’t ruined the company yet though].
Enron for paying their executives “idea bonuses” before the ideas turned a profit. They paid one guy millions for inventing an online movie downloading service about ten years before that was feasible. Ironically, the documentary is available on Netflix.
[AS: Actually, idea bonuses are not a bad idea. The real problem with Enron was the fraud].
Hat tip to Chris Blattman.