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From billion-dollar blunders to market meltdowns, these executive decisions changed history for all the wrong reasons! Join us as we examine catastrophic corporate missteps that tanked companies, destroyed reputations, and in one case, nearly collapsed the global economy. Which CEO disaster do you think had the biggest impact?
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00:00A once-dominant video rental chain has filed for bankruptcy,
00:03and some movie renters say it could mark the end of an era.
00:07Welcome to WatchMojo, and today we're counting down our picks
00:09for the most catastrophically bad business decisions ever made by CEOs.
00:14That is symptomatic of an organization that was built on innovation.
00:19Number 10. Roberto Goyzuita introduces new Coke.
00:23Well, the real thing is in for a real change these days.
00:26Coca-Cola is altering its 99-year-old secret recipe.
00:30But if things have been going better with Coke all along, why tamper with success?
00:34In 1985, Coca-Cola CEO Roberto Goyzuita decided to reformulate the world's most beloved soft drink.
00:40Yeah, this is a great idea and totally won't tank the company, they said.
00:43The result was new Coke.
00:45It was supposed to modernize the brand, but it only made everyone turn against it.
00:48And all of us were excited to try the free samples at the television station that day.
00:52The shock? It wasn't so good.
00:55And after just 79 days, Coke pulled it from stores.
00:59New Coke has been a punchline ever since.
01:02Outraged consumers flooded hotlines, hoarded old cans, and organized protests to vocalize
01:06their hatred of the new formula.
01:08The backlash became so intense that Coca-Cola said,
01:10OK, OK, and brought back the original formula after just 79 days.
01:14While the fiasco ultimately boosted sales of classic Coke,
01:17it showed how ignoring brand loyalty in favor of market research can backfire spectacularly.
01:22Goyzuita's decision remains one of the most infamous marketing missteps ever.
01:26Sweeter. Bolder. Better.
01:31You're insane.
01:32Number 9. Adam Neumann implodes WeWork.
01:34It's almost out of legend right now how recklessly WeWork spent its money on things from a company
01:39that makes wave pools to a company that makes superfoods led by a guy that Adam met while he was surfing.
01:46Adam Neumann sold himself as a visionary while touting WeWork,
01:50turning office rentals into co-working and virtual shared spaces.
01:53Investors bought the hype and then some, pushing the company's valuation up to $47 billion by 2019.
01:58But Neumann's reckless spending, erratic leadership, and self-dealing quickly surfaced,
02:02and it spelled disaster for his startup.
02:04And there was a small line, just a couple lines, about how Adam Neumann, the CEO,
02:09he had personally purchased the trademark to the word WE,
02:13and had sold that back to his own company for $5.9 million.
02:18And I looked at that and I thought, that's kind of weird.
02:20Neumann famously leased his own properties back to WeWork and trademarked the word WE,
02:24selling it to his own company for millions.
02:26When WeWork attempted an IPO, its financials collapsed under scrutiny,
02:30and Neumann was ousted from the company.
02:31Its valuation cratered and WeWork quickly became a legendary symbol of failed startup excess.
02:37Hey, I'm the guy from WeWork.
02:39My foremost goal is to facilitate an experiential bandwidth of synergy.
02:44Hammock desks, scooter desks, and the world's first desk desk.
02:48The only desk that functions as a working desk.
02:51I have been the WeWork lunatic.
02:53Please don't Google me.
02:54Number eight, Meg Whitman's Quibi disaster.
02:56The short-form streaming service Quibi, the startup is shutting down
03:00after just six months in operation.
03:03TJ Holmes is here with more on what went wrong for the platform that attracted some big celebrity names
03:08and nearly $2 billion in investments, TJ.
03:11With $1.75 billion in funding and big Hollywood names attached,
03:15Quibi was supposed to revolutionize short-form entertainment.
03:19Founded by Jeffrey Katzenberg and led by Whitman as CEO,
03:22Quibi launched in 2020 as a mobile-only streaming service,
03:25offering quick bites of video content for people on the go.
03:28It was the streaming service meant to change entertainment.
03:31Quibi, hoping to hook mobile users by offering five to ten-minute quick bites of content.
03:36Unfortunately, the COVID-19 pandemic hit and suddenly no one was going anywhere.
03:41To be fair, Quibi was probably doomed from the start.
03:43It had some insanely confusing marketing, zero breakout shows, and no ability to share clips online.
03:48The very concept was mocked by many, and Quibi's fate was quickly sealed.
03:51It shut down after just eight months, and Whitman and Katzenberg's overconfidence
03:55proved that even billions can't save a product that nobody wants.
03:59Why are we doing our Christmas shopping at the Strip Mall?
04:01Because we ran out of gas out front.
04:03You gotta get that gas gauge fixed.
04:06Look, Chris, did you want the gas gauge fixed, or did you want a year of Quibi?
04:09The gas gauge.
04:11Number seven, Jerry Yang refuses Microsoft's order.
04:14It's the end of an era for Yahoo.
04:16What an era, right?
04:17The Silicon Valley pioneer will cease to exist after two decades,
04:22as Verizon buys the company for $4.8 billion.
04:25In 2008, Yahoo co-founder Jerry Yang had what is probably the goldenest of golden opportunities.
04:32You see, Microsoft offered to buy his company for $44.6 billion, or roughly $31 per share.
04:38Yang turned it down, believing that Yahoo could thrive independently and was worth more than that.
04:42That decision proved disastrous.
04:44When was the last time you used Yahoo?
04:46Over the next decade, the company steadily declined as the likes of Google and Facebook
04:50dominated the online market.
04:51Yahoo basically had zero mobile business.
04:53Now they have a decent mobile business.
04:55It's still far behind Facebook and Google and Snapchat.
04:59In 2017, Verizon bought Yahoo's core internet assets for less than $5 billion,
05:04a fraction of what Microsoft offered less than a decade earlier.
05:07Yang's refusal became a cautionary tale about hubris and missed opportunities,
05:11a moment when overconfidence cost shareholders tens of billions of dollars.
05:15But to your point earlier, yes, Jerry Yang made a huge mistake not taking the Microsoft bid in 2008 for $45 billion.
05:24Number six, John Antioco laughs off Netflix.
05:26Why did Blockbuster Video go out of business?
05:29Was it Netflix?
05:31Netflix was really the nail in the coffin.
05:34For sure, Netflix.
05:35Netflix.
05:36Netflix.
05:37Netflix.
05:38Netflix, or streaming, or...
05:40Yeah, so look, most people think Blockbuster went out of business because of Netflix, but that's not the truth.
05:46At the turn of the millennium, Blockbuster reigned supreme in the home entertainment market.
05:50Along came Netflix, a then-fledgling DVD-by-male startup that had a fraction of Blockbuster's cultural prowess.
05:56They proposed a partnership that would combine Netflix's online model with Blockbuster's retail presence.
06:00But CEO John Antioco famously laughed them out of the room.
06:04John had an opportunity to acquire Netflix.
06:07Was that possible?
06:08Yes.
06:09In 2000...
06:10Well, I don't...
06:11It's, um...
06:12Back in those days, yeah, it was possible.
06:14His words is they laughed him out of the room.
06:17Years later, Netflix revolutionized the industry with streaming,
06:20while Blockbuster clung to late fees and dying physical media.
06:23Netflix became the media king of the 2010s,
06:26while the once-mighty rental chain filed for bankruptcy.
06:28Antioco's infamously dismissive attitude toward innovation
06:31turned into one of business history's biggest what-ifs.
06:34Today, Blockbuster lives on, but only in our nostalgic memories.
06:38And Bend, Oregon.
06:39The piano scene, it's a classic, and Tom Hanks, Penny Marshall,
06:44you can't beat it.
06:45Big.
06:47So we're gonna take this one.
06:48Number five.
06:49George Fisher downplays digital photography.
06:51But the world was moving fast.
06:53A technological revolution was sweeping across the globe
06:57and altering everything it touched.
07:00We were changing.
07:01Out with the analog.
07:03In with the digital.
07:04CEO of Kodak in the 1990s, George Fisher,
07:07presided over the company that literally invented the digital camera
07:10back in 1975.
07:11But instead of embracing it,
07:13Fisher and his Kodak team were reluctant to promote or prioritize it,
07:16fearing that it would cannibalize their profitable film business.
07:18Digital was gaining a rapid foothold everywhere.
07:22But the view inside Kodak hadn't changed,
07:25and it led to a difficult decision for him.
07:28I actually lost sleep over the lack of support
07:31and also the negativity around people that did not understand
07:37and actively tried to sabotage digital photography.
07:40Well, we all know how that went.
07:42As digital photography advanced,
07:43competitors like Canon, Sony, and eventually smartphone makers seized the market,
07:47while film photography was left in the dust.
07:49Kodak tried to pivot, but it was way too late,
07:51and the company filed for bankruptcy in 2012.
07:54Fisher's short-sighted decision is now a textbook example of corporate denial
07:57and how fear of disrupting your own success can let others do it for you.
08:01Got it.
08:01Now what I'm gonna do is simply tweet that out now.
08:04Why?
08:05Why not?
08:06It's fun.
08:06And this is why Kodak probably is filed for Chapter 11 bankruptcy.
08:12Oh, you're saying because people take it with their phones.
08:14We really don't need them anymore.
08:16Number four, Martin Winterkorn's Dieselgate.
08:18The world's biggest car manufacturer,
08:21and maybe the biggest ever corporate scandal.
08:24If you're a VW shareholder or employee today,
08:28the letters stand for very worried.
08:31Under Martin Winterkorn,
08:32Volkswagen became one of the leading names in the automotive industry.
08:35Until 2015, when the Dieselgate scandal exposed massive deception.
08:39The company had secretly installed defeat devices
08:41in millions of diesel vehicles to cheat emissions tests,
08:44making them appear cleaner than they actually were.
08:46And Volkswagen took a decision to fit technology and software to their vehicle,
08:51knowing that their cars would produce much more,
08:54in the case of the U.S.,
08:5540 times more pollution on the road than they were allowed to.
08:59When regulators uncovered the fraud, Volkswagen's stock plummeted.
09:02Winterkorn resigned and the company faced over $30 billion in fines and settlements.
09:07Beyond the financial blow,
09:08the scandal shattered public trust
09:10and severely damaged Germany's reputation for engineering integrity.
09:14As for Winterkorn,
09:15he was indicted on charges of fraud
09:16and remains a fugitive from the United States,
09:18wanted by the Environmental Protection Agency
09:20on multiple charges of conspiracy.
09:22And in the 90s, they made it even more difficult,
09:24and people loved it.
09:25They talked about fartfegnugen,
09:27so driving enjoyment, right?
09:29So Americans who could say kindergarten and beer
09:32all of a sudden can say fartfegnugen, you know?
09:35Now they probably say fraudfegnugen.
09:37Number three,
09:38Tony Hayward's response to the Deepwater Horizon disaster.
09:41At first, BP's strategy was to say,
09:44while it would pay for the cleanup,
09:46other companies were also responsible for the well.
09:48But the White House and lawmakers zeroed in,
09:52especially on Hayward,
09:53saying BP was not doing enough.
09:56In 2010, BP CEO Tony Hayward became infamous
09:58for his mishandling of the Deepwater Horizon explosion,
10:02a disaster that killed 11 workers
10:03and spilled millions of barrels of oil into the Gulf of Mexico.
10:06The human, environmental, and economic damage was catastrophic,
10:09but Hayward's tone-deaf response made things even worse.
10:12His now-notorious comment of,
10:14I want my life back,
10:15infuriated the public
10:16and underscored BP's lack of accountability.
10:18We're sorry for the massive disruption
10:21it's caused to their lives.
10:23And, you know, we're,
10:24there's no one who wants this thing over more than I do.
10:26You know, I'd like my life back.
10:28Again, 11 people died.
10:30Their lives are never coming back.
10:32And the fact that the CEO said that
10:34was just mind-bogglingly numb.
10:36The company eventually paid over $60 billion
10:38in fines and settlements,
10:39and Hayward was forced to resign.
10:40No surprise there.
10:41BP has embarked on an image rehabilitation campaign,
10:45one that seeks to show a little more empathy
10:47and concern after CEO Tony Hayward
10:50was quoted earlier this week saying,
10:52quote,
10:52I'd like my life back.
10:54In a new commercial,
10:55he sounds a different note.
10:56Number two,
10:57Dennis Mullenberg introduces MCAS.
10:59Three hundred and forty-six lives
11:02and the reputation of Boeing,
11:04the world's largest aircraft company,
11:07lay scattered in the waters of Indonesia
11:09and in the soil of Ethiopia.
11:12Boeing faced a PR nightmare in the late 2010s
11:15when their 737 MAX planes kept crashing.
11:17Three hundred and forty-six lives were lost,
11:20exposing how greedy cost-cutting
11:21and corporate pressure can compromise consumer safety.
11:24Under CEO Dennis Mullenberg,
11:25Boeing rushed production to compete with its rival Airbus,
11:28introducing the flawed MCAS flight control system
11:30without even fully informing its pilots of the change.
11:33Boeing's error in not telling pilots
11:35about the existence of the MCAS system
11:38would soon have catastrophic consequences.
11:41After the crashes,
11:42Mullenberg downplayed the severity
11:44and resisted grounding his planes,
11:46prioritizing investors over human lives.
11:48But the entire MAX fleet
11:49was eventually grounded for nearly two years,
11:51costing Boeing tens of billions
11:53and destroying its reputation
11:55for engineering excellence.
11:56Mullenberg was fired in 2019
11:58and the scandal's shadow
11:59still looms large over Boeing today.
12:01Whatever Boeing does,
12:03the fact remains that 346 lives were lost.
12:07For grieving families and industry experts,
12:12it's going to take a long time
12:14to understand how this could have happened.
12:17Before we continue,
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12:311. Richard Fold destroys Lehman Brothers
12:36and the world economy
12:37This story is about the longest, biggest,
12:41and probably most lucrative bankruptcy in history.
12:45Back in 2008,
12:46Lehman Brothers CEO Richard Fold
12:47ignored warning after warning
12:49about the firm's exposure to toxic
12:50and horribly implemented mortgage-backed securities.
12:53And as the American housing market
12:55crumbled around then,
12:56Fold was unable to save the company.
12:58Lehman Brothers filed for bankruptcy that September,
13:00resulting in the largest bankruptcy in American history.
13:02And, oh yeah,
13:03the fallout triggered a global financial crisis,
13:06wiping out trillions of dollars in wealth.
13:08A's.
13:09Zero.
13:10B's, zero.
13:11Double B's.
13:12Zero.
13:13Triple B's.
13:14Zero.
13:17And then that happens.
13:19What is that?
13:22That's America's housing market.
13:24Fold's stubbornness and denial
13:25turned a bad situation into an economic catastrophe
13:27that some argue we still haven't recovered from.
13:30Though he walked away with hundreds of millions,
13:32his legacy remains synonymous with greed,
13:34the collapse of Wall Street confidence,
13:36and the tarnishing of the world economy.
13:38It's got $600 billion in assets.
13:41Nothing like that had ever gone bust before.
13:43Nothing really like that has ever gone bust since.
13:46What would you have done in their shoes?
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