400 Part 3: Strategic Actions: Strategy Implementation
All the Ways You Can Fail!
NBC News experienced several major problems in 2014. Likely,
the biggest problem was the suspension of popular nightly
news anchor, Brian Williams, for embellishing his role in several
past news stories. When this came to light, concerns about
his credibility and thus NBC News credibility caused the top
executives to take action. In addition, NBC’s former top morn-
ing show, the Today Show, fell in the ratings. Because of this,
Jamie Horowitz was hired from ESPN to make major changes.
However, Horowitz and the staff on the show had major
differences of opinion, especially with the manner in which
Horowitz dealt with staff. These high profile clashes led top
executives to let Horowitz go. As a result, Andrew Lack, former
president of NBC News, was hired to replace Patricia Fili-Krushel
as chair of the NBC Universal News Group. Time will tell if Lack
can restore stability, credibility, and high ratings to NBC.
Nokia is an almost textbook case on how to fail. In 2009,
Nokia was the market leader in the global smartphone mar-
ket, but by 2014 it was not listed as a rival in the market. The
Nokia brand had disappeared. Before the launch of the Apple
iPhone, Nokia had access to the touch screen technology, and
Nokia technology specialists recommended integrating it into
its smartphones. But, the top leadership at Nokia rejected this
idea because Nokia was doing well and using this technology
entailed risk. Of course, rivals Samsung and Apple imple-
mented the technology, and those two firms along with others
took the smartphone market from Nokia. Nokia’s leaders made
absolutely horrible decisions and failed because of it.
The Standard Charter bank’s profits declined in 2014 by
37 percent relative to the profit achieved in 2013. Most people
attribute the bank’s performance problems to its weak capital
position and its major exposures to risk in Asian markets. The
CEO, Peter Sands, was asked to resign. Investors and others had
lost confidence in his ability to manage the bank effectively.
Essentially, he made minor changes (e.g., reducing costs) but
avoided large changes likely needed to turn around the perfor-
mance of the bank. To replace Sands as CEO, the bank chose
William T. Winters, a former head of JPMorgan Chase’s invest-
ment bank. Standard Charter has experienced many problems
in recent years. For example, it has experienced losses on bad
loans in increasing amounts. In 2012, it paid fines of $667
million because of charges that it had transferred billions of
dollars to Iran and other such countries in violation of the OFAC
sanctions. In 2014, it paid $300 million to settle claims that its
computer system failed to identify suspicious transactions with
high-risk clients. Winters is said to be a very savvy manager
of risk. Investors at Standard Charter should hope it is true, as
they now need that expertise and a leader who makes good
decisions.
The problems experienced by each of the firms were due
to poor executive decisions. In the case of NBC, top managers
failed to provide appropriate oversight to ensure the credi-
bility of its news. Also, poor personnel decisions were made.
In the case of Nokia, substantial conservatism led to a very
poor product decision. In that case, the company fell from
market leader to no longer being in existence. Finally, Standard
Charter leaders made poor decisions, failing to manage its risks.
Additionally, it made perhaps unethical decisions for which the
firm was fined. Finally, inadequate technologies led to addi-
tional failures.Sources: J. Bean, 2014, Bye Nokia—A failure of management over leadership,
Jonobean, jonobean.com, November 12: P. J. Davies, 2015, How to give Standard
Chartered breathing room it needs, Wall Street Journal, http://www.wsj.com, February 26;
J. Anderson & C. Bray, 2015, Standard Charter overhauls leadership, New York Times,
http://www.nytimes.com, February 26; J. Flint, 2015, NBC News bringing in new leader-
ship, after high-profile stumbles, Wall Street Journal, http://www.wsj.com, March 3; C. Bray,
2015, Standard Charter profit fell 37% in 2014, New York Times,
http://www.nytimes.com, March 4.Bobby Bank/Getty Images
Andrew Lack hired to become the chair
of the NBC Universal News Group.Strategic Focus