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Out with the Old (but Really Great Business Stories), in with the New

Geplaatst op dec 27, 2013 in News

Patch Woes

The Story Behind Why AOL CEO Tim Armstrong Fired an Employee in Front Of 1,000 Coworkers

Business Insider

For a few days last August, it was one of the most talked-about business stories in America: Tim Armstrong, the CEO of AOL, fired someone abruptly during a meeting. A recording of the incident went viral. What made the typically affable Armstrong snap? In this massive piece, Nicholas Carlson analyzes Armstrong’s rise from his days as the owner of a strawberry business, uncovering a leadership trajectory that culminated in a proxy war with an activist investor and a final realization that his baby — local-news and listings provider Patch — needed to be trimmed, or else.

Armstrong told his board he could make Patch profitable within a year, but it didn’t happen. Last August, feeling awful, he knew he had to face the consequences and make unpopular choices. “For so long, it was a price he had never had to pay,” writes Carlson, and offers ample evidence that the exec was more comfortable in the role of the golden boy than of the guy who had to make tough decisions. Eventually, Armstrong became so emotional about doing the latter that it didn’t take much to provoke him. And we all know what happened next. (October 2013)

The Dark Side of Generic Drugs

Dirty Medicine


Generic drugs can be inexpensive and effective alternatives to their branded counterparts. But according to this devastating Fortune investigation, they can also be useless on a good day and deadly on a bad one — that is, if they were manufactured by Ranbaxy, an Indian drug maker. In this epic piece, Katherine Eban uncovers downright fraud in how generics were tested (or, rather, weren’t) and exposes a corporate culture so steeped in greed and dysfunction that fistfights were known to break out during executive meetings. Although concerned employees tried to alert the FDA and other regulatory agencies to the company’s behavior, progress in stopping the distribution of potentially dangerous medications crawled along at a turtle’s pace. Sure, the company was eventually both punished and sold (it’s now one of the fastest-growing pharmaceutical businesses in the U.S.). But when FDA inspectors were asked whether they would be comfortable taking a Ranbaxy-made drug, such as a generic cholesterol medication, “like eight out of eight” said no. (May 2013)

Lunchables Are All About Power

The Extraordinary Science of Addictive Junk Food

New York Times Magazine

The success of Lunchables derives from a combo of a high-fat food and a message that is “about kids being able to put together what they want to eat, anytime, anywhere.” Oh, and: the optimal crunching pressure of a potato chip for is four pounds per square inch. This New York Times Magazine piece by Michael Moss is packed with such details, which I found just as addictive as a bag of Lays. In it, he traces the intersection of science and marketing that’s made junk food so delicious, so profitable, and so very bad for you. The story starts at a secret meeting among the CEOs of America’s largest food companies in 1999, at which some execs tried to veer the industry along a healthier path (using the dreaded comparison of Big Tobacco), only to be shut down by the head of General Mills. What comes next is a detailed look at how brands like Dr Pepper, Oscar Mayer, and Frito-Lay hired sought-after experts to make their food taste just so, combining the taste perfection with psychologically effective marketing. (February 2013)

By the People, Not For the People

Maximizing Shareholder Value: The Goal That Changed Corporate America

The Washington Post

In 1963, IBM CEO Thomas J. Watson published A Business and Its Beliefs: The Ideas That Helped Build IBM. The text listed the company’s values in the following order: respect for the employee; a commitment to customer service; and achieving excellence. By 1994, when Louis V. Gerstner Jr. headed the company, he orchestrated an epic turnaround, putting shareholder value and customer satisfaction at the top of the list. Employees and community were at the bottom. The most recent two CEOs placed investor returns at the top of their priority lists.

So how did the company go from extolling and supporting employees to slashing jobs in order to make money for its shareholders? Jia Lynn Yang explores this trajectory, focusing on the 1970s explosion of free-market scholarly thought that has become the baseline for running a company in the twenty-first century. This, of course, has led to the implicit notion that CEOs work for the short-term benefit of their investors, not their employees, and will be rewarded with piles of cash and stock options in the process. But is it actually working? Many people, it seems, are concerned that we’ve adopted a mantra as fact without considering its long-term consequences for the health of the American workforce. (August 2013)

When a Website Literally Crashes

The Strava Files

Bicycling Magazine

What responsibility does the maker of a fitness social network have for the safety of its users — and the general public? This lengthy investigation by David Darlington takes a close look at Strava, one of biking’s most successful sites and apps, which does exactly what a good social tool should: It allows you to track your athletic progress and compare it with others’, all the while tapping into curiosity, self-interest, and social competition — three of the brain’s chief dopamine drivers. But after two people died in connection with the site — a cyclist was killed while attempting to reclaim what’s known as King of the Mountain [KOM] status as the fastest rider for a given route, and a pedestrian was struck and killed by a speeding biker two years later — the cycling, start-up, and legal communities were forced to take a close look at whether Strava was creating and reinforcing competition at society’s peril. I won’t give away the end of the piece, which involves a potential legal nightmare for any company that asks users to hit an “Agree” button after reading terms and conditions. But the Strava case is prescient as we continue to develop digital technologies that influence the emotions and impulses that make us so darned human. (October 2013)

Nice Try, Though

You Didn’t Make the Harlem Shake Go Viral — Corporations Did


Remember the Harlem Shake? It doesn’t have much to do with Harlem, according to real people who actually live there, and it doesn’t have much to do with the power of crowdsourced virality either. In this smart takedown of the meme, Kevin Ashton recreates the timeline of the dance’s popularity to reveal exactly how, in the wake of Oreo’s Super Bowl “win,” corporations pounced on the video’s potential to make money. The Harlem Shake itself, writes Ashton, “originated with a drunken man named Albert Boyce dancing at Harlem’s Rucker Park basketball court in 1981.” It then inspired an unsuccessful song, until a student named George Miller used it in a video. A few people copied him, and a version found its way onto Reddit, which prompted someone at Maker Studios to recognize its “pre-viral” potential. So began its “rapid replication,” which “was driven by media and marketing professionals, led and orchestrated by three companies: Maker Studios, Mad Decent, and IAC.” And as more people clicked, money flowed from Google’s ad structure, “where more searches and more views mean more dollars.” (March 2013)

You’ll Never Buy Anything the Same Way Again

The Secrets of Bezos: How Amazon Became the Everything Store


Ever wondered what it’s like to work at Amazon? Or to be one of its competitors or potential acquisitions? Or even to be related to founder Jeff Bezos? Look no further than this lengthy piece by Brad Stone. On my first question, Bezos isn’t a particularly nice boss. Amazon’s culture is “notoriously confrontational,” with Bezos regularly embarking on what employees call “nutters,” which largely consist of him shooting off phrases like “Are you lazy or incompetent?” “I’m sorry, did I take my stupid pills today?” and “If I hear that idea again, I’m gonna have to kill myself.” And yet many people who work there thrive in this environment and generally find that Bezos is right on target when he flippantly dismisses an idea or prioritizes a customer complaint over being civil to his underlings. As for my second and third questions, you’re going to have to read the article. In particular, what happens when Stone tracks down Bezos’s biological father is astonishing. (October 2013)


Don’t Fret! Here are Some Brand New Stories, Too

The Corporate “Free Speech” Racket (Washington Monthly)
Jesse Willms, the Dark Lord of the Internet (The Atlantic)
The Shape of Things to Come (Foreign Affairs)

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