Business | Money | Self
CEO Blows $4 Billion With Three Bad Jokes
It would seem obvious.
If you are a CEO, say good things about your product. Most CEOs do this to a fault. Faulty cars fly off the road, catching on fire, and wrapping around trees.
Then, the incredible leader, Mr. Scamalot says, “We are committed to safety. You will still enjoy our all leather temperature-controlled seats!”
While refusing to apologize to the victims.
This was not the case for Gerald Ratner. He had no crisis or major malfunctions. If this were tennis, his would be an unforced error, which brought a years-long rise to success to an abrupt end.
You can learn a lot from a foolish CEO.
It started in a happy place
Gerald was the CEO of his family’s jewelry business, The Ratner Group.
His father had passed him the reigns in 1984. The company was losing tens of millions at the time.
Through Gerald’s own innovation, cost-cutting, and rebranding, the company righted its ship into an era of rapid expansion and prosperity.
They were a low-price competitor, selling affordable jewelry and gadgets to the working class. They ran more than a thousand stores throughout Europe and the United States.
Their high-volume, low-margin strategy bared many fruits, bringing Ratner great fame and fortune. His free time was spent on yachts, private jets, and extravagant vacations with his family.
However — Ratners was far from being known as a luxury store. It developed a reputation for cheap, flimsy goods. They were the IKEA of their day, with people joking that their earrings were only good as Christmas tree ornaments.
Gerald had the last laugh. The company took 50% of the UK market and put several competitors out of business.