Management fails are common. Manager Betty sometimes gets short-tempered with her colleagues when deadlines are tight. Team lead Bobby sometimes forgets to file an invoice.
Being a manager is hard work and slip-ups are inevitable.
But some management failures are so colossal, they get the whole world talking, costing millions of dollars in losses and lost opportunities and/or causing irreparable damage to a company’s reputation. The latter may even be worse, as a World Economic Forum study estimated that reputation accounts for more than 25% of a company’s market value.
From the OpenAI leadership debacle to a conference organizer faking diversity by fabricating profiles of non-existing speakers – grab some popcorn, as we take a look at some of the loudest management fails of this year to learn from others’ mistakes, or, at the very least, get a little bit of schadenfreude out of it.
Next time you’re brooding over a small mistake, remember – it could be worse.
In no particular order, here are our top 5 biggest management fails of 2023.
1. Follow the leader – OpenAI fires and rehires CEO Sam Altman
OpenAI, the company behind ChatGPT, is one of the most talked about companies in the world – and its CEO, Sam Altman, has become the face of artificial intelligence.
So imagine everyone’s surprise, when one day in November, seemingly out of the blue, the announcement came that OpenAI’s CEO has been fired for no immediately apparent reason.
Soonafter, the company was on the brink of collapse. In response to Altman’s firing, OpenAI’s co-founder Greg Brockman announced his resignation, and as did three other senior AI researchers at the company. A few days later, more than 700 of the company’s 770 employees (including a co-founder who initiated the firing!) signed a letter threatening to leave, unless Altman returns.
Then, less than a week since the antics started, news came out that Altman’s returning as CEO.
It appears that there was a clash of vision and personality between Altman and the board, specifically as it relates to the development of Artificial General Intelligence (in layman’s terms – the type that may be smarter than humans). Perhaps the board saw the firing as pulling emergency brakes on a project that scared them, however, the real reason hasn’t been revealed in its entirety.
But, in the end, everybody lost (maybe except Microsoft) and it’s a prime example of management failures. Altman had a multi-billion fundraising campaign interrupted. The board got reworked and Altman is still in charge. And everybody else is left wondering what is really going on at OpenAI – the company shaping all of our futures.
2. Bonuses for me, not for thee – MillerKnoll CEO’s pity city rant
Between geopolitical turbulence, rising prices, and sky-high inflation, 2023 saw an acute cost of living crisis that, understandably, left many people worried about their finances. Many companies stepped up, offering assistance, reviewing outdated benefit packages, and providing direct financial assistance to their employees.
Other companies weren’t so forthcoming and MillerKnoll became the poster child of insensitivity when, during an online town hall meeting, the CEO Andi Owen went on a rant in response to people inquiring about bonuses.
“Don’t ask about ‘what are we going to do if we don’t get a bonus?’ Get the damn $26 million,” she said, likely referring to an internal company goal. “Spend your time and your effort thinking about the $26 million we need and not thinking about what you’re going to do if we don’t get a bonus. All right? Can I get some commitment for that? […] I had an old boss who said to me one time, ‘you can visit pity city but you can’t live there.’ So people: Leave pity city. Let’s get it done.”
What may have sounded like an inspirational speech in her mind came out as an out of touch rant, and quickly went viral, as people began to point out how Owen took home an additional $3.9 million in various bonuses on top of her $1.1 million salary in 2022.
She did apologize afterward.
“I feel terrible that my rallying cry seemed insensitive. What I’d hoped would energize the team to meet a challenge we’ve met many times before landed in a way that I did not intend and for that I am sorry.”
This raised some eyebrows, too, as rather than tackle the underlying issue of compensation in any meaningful way, the apology simply boils down to “I’m sorry you didn’t get what I said”.
3. Don’t get high on your own supply – Zoom calls workers back into the office & scares its users with AI T&Cs
August saw peak irony as Zoom announced it wants its employees back into the office. The company whose name has become synonymous with video conferencing, and has solidified phrases such as “Zoom fatigue” in today’s discourse asked employees within a 50 miles radius of an office to come in at least a couple of days a week.
Is it a management mistake, though? Other than making the company the butt of every work-from-home and return-to-office joke, no, not really. The jury’s still out on whether this has caused any reputational damage, but even if it has, the fallout will likely be minimal.
The real question is – was the Zoom RTO escapade a distraction from a more sinister issue? Also in August, a report came out that Zoom had previously changed their terms of service, saying that the company has “perpetual, worldwide, non-exclusive, royalty-free, sublicensable, and transferable license” to use the data (e.g. your calls on the platform) any way it wants, including for training AI models.
Strong criticism followed, which caused Zoom to first update their terms to say that this will only happen with user consent, and soon after the company scrapped the AI-training terms entirely, now stating that “Zoom does not use any of your audio, video, chat, screen sharing, attachments or other communications-like Customer Content (such as poll results, whiteboard and reactions) to train Zoom or third-party artificial intelligence models.”
This drama undermined a lot of people’s trust in Zoom, and even though the company has promised not to train AI models with your information and data, one cannot but wonder whether it’s using it in other nefarious ways.
4. “Go F%&# yourself” – Musk’s ongoing Twitter drama
X, the platform formerly known (and still mostly referred to) as Twitter, has been in the headlines throughout the year. Always appearing in tandem with its controversial owner Elon Musk, the platform has seen a rollercoaster of polarizing tech decisions, high-level drama, and strange managerial choices.
After a scandalous acquisition process that saw Musk buy Twitter for $44 billion just over a year ago, he’s now himself reported to say that the platform may have lost as much as 90% of its value.
So, how do you lose $30+ billion in the span of just over a year? Erratic decision-making, alienating your user base, and giving the finger to one of your main sources of revenue seems to be Musk’s strategy of choice for a sure-fire downward spiral.
He has told his advertisers to go f%$# themselves. He has positioned himself as a free speech absolutist and then selectively banned critic accounts or filtered information he doesn’t like. He has drawn and redrawn the value line in the sand several times.
Bending X to his whims has had a deleterious effect on the platform, and it’s not entirely due the nature of Musk’s whims themselves, but rather the uncertainty and unpredictability of the environment he has created, which is unappealing to anyone trying to conduct business.
Perhaps, there’s a master plan that’s slowly coming together and X will rise again. But until then, Musk and X have earned a spot on the list of top management fails.
5. Fake it ’til you make it? – Conference organizer publishes fake women speaker profiles to fake diversity
In late November, Eduards Sizovs, organizer of Devternity and JDKon conferences, came under fire for creating fake women speakers at his events to feign diversity.
After an engineer took a closer look at the event line-ups, he identified several speakers from high-profile companies that turned out to have no online presence outside their conference profile.
Eduards attempted to rectify the situation, admitting that one of the profiles was indeed fake and had been in use as a placeholder, while completing the line-up – a somewhat understandable practice with plausible deniability. However, the question remained about a handful of other women participants, and an answer was never provided.
Moreover, one of the women speakers that Eduards claims to have dropped out appears to be… Eduards himself. Julia Kristina, who also goes by Coding Unicorn on Instagram, had been listed on several previous Devternity events but never delivered any talks and a report from 404 Media revealed that Julia is most likely a fake profile run by Eduards.
It would appear that populating his conferences with fake profiles wasn’t a once-off slip-up, but rather a systematic practice that finally caught up to Eduards.
What happened after the revelation? Bad press, multiple speakers pulled out, and, now, both events are canceled – both figuratively and literally.
Management fails are inevitable – cheers to an even more ridiculous 2024
Looking back at the top management failures of 2023, many of them could have been avoided by the decision-makers being more empathetic, honest, and level-headed. Unfortunately, those don’t seem to be the most important traits for building and leading big, multi-billion businesses.
So, expect 2024 to bring new drama, missteps, blunders, scandals, and disasters. I’ll bring the popcorn.
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