David V. Goliath

Seven great decisions . . . and one of the worst

What a difference a decision can make. Excerpts The 75 Greatest Management Decisions Ever Made . . . 21 of the Worst (Amacom) by Stuart Crainer:

Matsushita

In the 1920s, Matsushita was struggling. Its latest product, a bicycle light, was unsuccessful. Then Konosuke Matsushita ordered his salespeople to leave a light in each store they visited. Sales took off, and so did the company.

Lesson: Seeing is believing.

Mattel

In 1961 the world's best-selling toy got a playmate. Ken became Barbie's partner for life and Mattel has been extending the brand ever since.

Lesson: Brand extensions allow companies to get more mileage out of ideas and keep products fresh.

Coca-Cola

The New Coke fiasco of 1985 was one of the worst decisions on record. So, wherein lies the greatness? The decision to go back to the original recipe was brave and (relatively) speedy. We all screw up. The brave thing to do is to hold your hands up and admit it.

Lesson: Learn, don't blame.

The Grateful Dead

The Grateful Dead established immense customer loyalty in the1980s when they decided to allow fans to tape their concerts. The result? In 1996, merchandise sales were around $50 million.

Lesson: Give respect where it's due. Loyalty is cheap; its dividends are enormous.

Johnson & Johnson

In 1982, Johnson & Johnson pulled Tylenol from the shelves, putting customer safety before corporate profit--and Johnson & Johnson CEO Jim Burke provided a lesson in openness with the media.

Lesson: React coolly and positively to crises. Don't play them down.

Dell

Michael Dell decided to sell PCs direct to consumers and built to order. Now everybody in the industry is trying to imitate Dell's strategy--too late.

Lesson: Get close to customers. Cut out the intermediaries.

Hoover

William Hoover placed an ad offering a free 10-day trial of his new sweeper. Rather than send the sweeper direct, Hoover sent the sweeper to a store near the requester's home. Hoover included a note, asking the store to deliver it and telling the store to keep the commission if a sale was made. This not only secured direct sales--it helped Hoover quickly establish a network of dealers.

Lesson: Get retailers on your side.

Intel:

One Bad Decision

"In the mid-1970s, someone came to me with an idea for what was basically the PC," Gordon Moore of Intel admits. "I personally didn't see anything useful in it, so we never gave it another thought."

Contact Sources

This article was originally published in the November 1999 print edition of Entrepreneur with the headline: David V. Goliath.