When a New Year begins, it’s always Interesting to think about what happened in the past year and what the world learned during those interesting times. From emission scandals, children data hacks, food mergers and technology demergers it’s been a year for of changes in business. Of course we’re going to see more (what appear to be) earth shattering business decisions this year but before they happen let’s take a look at what changed the face of companies as we knew them a year ago.
Volkswagen’s Emission Test Scandal
The scandal created by the German company knowingly installing faulty software to pass emission tests shook much of the world. Volkswagen known for being reliable, went through one of the biggest shake ups possible and from this, their stocked plummeted 30% in one single day. Of course Martin Winterkorn, the CEO at the time resigned but where does the company stand today?
As I see it, Volkswagen deployed a brilliant 2 pronged approach to recover from this staggering disaster: genius marketing and admirable vision. On their website they accepted their mistake and went on to explain to consumers just how they’d set things right. They also readjusted their future plans and committed to creating 20 new electric and hybrid cars by 2020, making them the biggest car makers by 2018. Will they succeed? Only time will tell.
I think there’s only one piece of information that people value more than their financial data and that’s the personal details of their kids. Right at the end of 2015, VTech, a global supplier of electronic learning products underwent a cyber attack which exposed personal information of kids and parents. Everything from children’s names, gender and birth dates to parent’s addresses, secret questions for password retrieval, IP address and much more had been stolen. It was a nightmare for both parents and the company.
VTech provided a FAQ on the hack on their websites with extremely detailed questions and useful answers. They have also suspended sites that were linked with the hack. But more than that, this has been a wake-up call. Once data goes online, it’s no longer a secret. Of course that’s not to say that you should go “off the grid” – that’s almost impossible now. But, there’s no limit to the amount of caution you can exercise to protect yourself or your family. As for VTech, they’ve got a lot of work to do before parents will put their trust back in the company.
Kraft and Heinz Merger
The merger of two food giants is an example of how businesses run their operations in the back-end, driven by finances and economies of scale while consumers are more or less oblivious of everything that goes on to bring their ketchup and cheese to the table. Obviously Kraft and Heinz (now known as Kraft Heinz Company) do so much more than provide basic food and the merger has shown us some genius management concepts that will take these two even further than could have been expected.
Take for example the leadership. The Chairman and Vice Chairmanship of Kraft Heinz Company will be the Chairman of Heinz and Kraft. Heinz global presence will be leveraged to bring Kraft products to the rest of the world. And the magic of mergers – economies of scale – are expected to bring the company a whopping $1.5 billion in annual cost savings. Wow. It will be interesting to see how the stocks do by the end of 2016.
It seems like the mass layoffs we saw during the financial crisis of 2008 had finally slowed down. Even though I don’t expect large corporations to stop laying people off, I didn’t expect to see the magnitude at which HP had to let people go. With the splitting of Hewlett Packard to Hewlett Packard Enterprise and HP Inc., people knew trouble was coming. They just didn’t think it would be so big. With numbers coming in between 30K to almost 50K, a lot of people lost their jobs.
HP is no stranger to controversy. From spying scandals to bribery they’ve had their hands full over the years. Even though there were a number of tough decisions for them to make, they most likely made the right move if they wanted to survive. With a narrower focus on what the individual companies need to achieve they may be able to overcome the challenges they’ve faced with the rise of cloud computing and smartphones. Another wait and see situation for 2016.
Like I said, it’s been an interesting year with many lessons learned – some good and some bad. Though most of us will probably not have to deal with the situations that these four companies encountered last year, they’re most definitely good lessons to learn. Hope you find some of them helpful for your organization.
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