When your wrong in business - admit it and turn the ship before it hits the iceberg

I am sure most of us have had the chance to watch Mr Bates vs The Post Office. If you haven’t take the time – it’s an amazing watch!

How could the Post Office not realise they were in the wrong? You have no issues and suddenly you have 500 postmasters on the take?? The truth is – they knew. They might not have known at first but there is no way on earth as the numbers started to mount up they didn't know. The problem was nobody wanted to admit it. They wanted to save face and refused to admit their millions of pounds spent on Fujitsu software wasn’t a mistake. Surely this would never happen in a major corporate. Somebody would be held accountable and they would change direction and admit the error of their ways – wouldn’t they?

How many businesses have tried to save face and eventually led to it costing them billions or even the companies future? Not admitting they have perhaps taken a wrong turn and rather than admit it and put their hands up ended up the creek without a paddle? Let's think of a few…….

Kodak – a little known fact is Kodak had the first digital camera back in the 70’s. At that time they had a choice as what would be the future; digital or not. Even in the 90’s and early 00’s they had a chance to redirect the business but ‘had made their choice’. They believed people would always want ‘photo albums’ and couldn’t see how digital pictures being printed directly would ever catch on. They decided smart technology along with digital cameras would never become the ‘norm’ to mainstream consumer and decided the future was actually the past. Also they would have to be willing to admit their fast moving consumer goods division of disposable cameras had a short shelf life left. Unfortunately for them not choosing to change their direction led to an inevitable outcome.

Nokia – Held over 40% market share of ALL MOBILE PHONES GLOBALLY. Read that again- over 40%.......40%!! Nokia however thought the ‘smart phone’ would never really ‘take off’ as an idea. Whilst Apple, Google, Samsung and Microsoft where beavering away Nokia stood fast and as recently as 2007 was likely the most ‘must have’ consumer product on the planet. Eventually they realised the error of their ways however by then the horse had already bolted. All attempts so far haven’t really endeared themselves to the consumer and for their 3% market share, they generally now have to rely on nostalgic consumers as opposed to being an innovator or market leader.

Toys’R’Us – Now don’t get me wrong – I still love the advert. In the way many listened to the Coca Cola advert to know ‘Christmas had begun’ my youth was hearing “There’s a magical place we’re on our way there. With toys in the millions…..” (and yes I can literally recite the whole song as my very annoyed colleagues will testify to). That being said this is a case of gross incompetence and mis-management. Very early in the new millennium Toys’R’Us made a mistake that would cost them dearly. They partnered with Amazon…….well surely that was a good idea- right? Well their partnership came at a cost. They paid Amazon a huge annual fee to be the sole distributor of toys and baby products for 10 years with them along with a small percentage of profits. Technically a great move; however part of the contract was that Toys’R’Us could have no online operations themselves…..think you can see where this is going. By 2010 they were basically a massive footprint with huge inventory and high costs with no established online market share. Similar to Argos; however they were happy to admit they had to be agile and change their business model – Toys’R’Us unfortunately didn’t. Although recently Toys R Us have opened an online presence as a recent investor is trying to create an online brand following their closure in 2020 – I don’t think the magic will ever be the same and Geoffrey would be turning in his grave to think how far they fell.

Blockbusters – This one sits at the top of the tree for absolute moronic pig-headed stubbornness in the face of changing times. Its hard to believe we spent Saturday nights following our parents around Blockbusters begging for Popcorn with the movie of our choice. I tried explaining Blockbusters to my 10 year old daughter and she literally laughed; however for many years this was a great business model. That being said they very much adhered to the idea of ‘if it isn’t broke, don’t fix it’. Which for the previous 70 years might have worked but post 2000 everyone could see we were in a time of quick moving innovation (well except the Blockbusters directors that is). They had a chance to buy out or partner with Netflix and supposedly ‘laughed Netflix out of the building with their propositions’ – I guess quite a few board members regret that one. Anyway they stood by their decision even when it became obvious they had missed the boat and ran a once billion dollar empire into extinction.

Now there are quite a few more examples I could name and all of them are billion dollar empires, untouchable by us mere mortals and all had one thing in common with the Post Office fiasco – rather than admit they were wrong they doubled down. Now I am not judging them making a mistake; I am judging them for realising they were wrong and rather than changing direction they chose to save face. Sometimes the hardest decision in business isn’t making the hard choices – it's realising the hard choices you made were wrong and admitting so.

Whilst we all watch Mr Bates vs The Post Office let’s just remember that yes it is horrendous. Yes they should all be held to account and dragged over the coals for what they did to those postmasters. But also this is not just a ‘public sector’ problem – many private sector businesses have picked their ‘hill to die on’ too. Often a small lie or a stupid decision has been doubled down on and snowballed out of control.

All you can do to learn anything from this show is be far more willing to admit when you were wrong. Be agile in this face of changing times. Treat your internal customers like your peers and above all else remember – if you have to ask internally more than twice whether you are in the wrong – then the likelihood is you already know the answer.