What are some greatest business decisions of all time?
Throughout history, there have been business decisions that seemed incredibly risky or nonsensical at the time but ended up completely transforming industries and companies.
These bold choices went against conventional wisdom and challenged the status quo. Many faced doubts or criticism initially. Yet, with sharp vision and willingness to take the road less traveled, business leaders made choices that paid off big time.
Let’s explore some of the most brilliant, impactful, and greatest business decisions ever made.
Purchasing the Patent for x-Ray Technology – GE
Back in the 1890s, x-rays were a groundbreaking new discovery by Wilhelm Röntgen. The ability to see inside the human body was mind-blowing at the time. When an x-ray of his wife’s hand first revealed her bones and wedding ring, Röntgen exclaimed “I have seen my death!” He knew the implications were huge.
Yet, Röntgen did not move to patent or profit from his Nobel Prize-winning discovery. Here was the opening of the century for General Electric (GE) to step in. GE purchased the patents and rights for x-ray technology for $50,000. This gave them exclusivity over manufacturing and selling X-ray machines.
For GE, this stupendous business decision provided massive growth. Owning the patent on a scientific marvel that would revolutionize medicine proved hugely lucrative. Today, x-rays remain a common medical diagnostic tool. GE’s early stranglehold on the technology helped cement their leadership in the medical devices space.
Switching to Making Toy Cars – Matchbox
Lesney Products was a die-casting company struggling to stay afloat in post-WWII London. Founded by Leslie Smith and Rodney Smith in 1947, their industrial die casts weren’t pulling in enough money.
In 1953, an inspired idea struck the Smiths. After seeing how much his daughter enjoyed playing with toy cars, Rodney created a simple but well-crafted model of a road roller. It was an instant hit with kids.
Seizing upon this success, the Smiths decided to transition Lesney to focus exclusively on miniature vehicles. First selling under the name “Matchbox” in 1956, their die-cast cars were an immediate success. By 1960, Matchbox was exporting worldwide.
The Smiths’ gamble to change direction proved phenomenally successful. It turned Lesney into a beloved global toy brand that brought joy to children worldwide. Matchbox cars became a classic toy, passing through generations. Reveling in their new niche, Lesney trademarked the phrase – “The Toy of the Century.”
Using Customer Data to Create the First Business Computer – IBM
In the early 20th century, data processing was tedious manual work. Clerks wrote down transactions by hand, and calculated totals with adding machines and typewriters. The laborious nature meant businesses could only process limited information.
Seeing an opportunity, IBM pioneered the use of punch card tabulating machines for data processing in the 1920s. Still, tabulating machines had limitations in storage and processing ability.
In the 1940s, IBM leadership made the pivotal decision to leverage expertise with punch cards into a powerful new invention – the computer. Engineers designed the first computer optimized for business uses – the IBM SSEC.
Unveiled in 1948, the SSEC boasted numerous groundbreaking capabilities. It could store more data than ever before – 7 million characters. Calculations were far faster than humanly possible. The SSEC was programmed using punch cards, so IBM’s existing machines and data processing skills were easily integrated. Customers gained the ability to tackle tasks with sophistication and speed like never before.
The creation of the first commercial computer revolutionized business practices and catapulted IBM to technology leadership. Their strategic move based on existing strengths provided a foundational building block of the modern computer industry.
Paying Employees Generous Wages – Henry Ford
When Henry Ford founded Ford Motor Company in 1903, factory working conditions were poor. Long hours, low pay, and absolutely no power plagued the typical laborer. From 1914-1915, factory worker turnover hit an astronomical 370% annually.
To address this issue, Ford made the unprecedented decision to double worker pay to $5 a day in 1914. It was a shocking move that rattled the industry. At the time, factory workers earned an average of $2.50 to $2.75 for a grueling 60-hour week.
Ford’s generous wage hike had resounding effects. By offering vastly higher pay, he achieved far greater staff retention. A stable, dedicated workforce was hugely beneficial for productivity and quality. The rate of Model T cars produced increased significantly.
Additionally, Ford raised loyalty and morale. Turnover plunged to just 16%. Employees could afford more comfortable lives, making harsh factory conditions more bearable. Workers could even afford the products they produced, growing Ford’s customer base.
Ford’s decision proved enlightened self-interest and capitalism need not be at odds with fair labor practices. His revolutionary step paved the way for livable wages and the middle class.
Launching the Sony Walkman – Sony
The year 1979 marked the debut of a disruptive new product – the Sony Walkman. For the first time, music lovers could listen to cassettes on the go with a compact, affordable, and portable device.
Yet Sony leadership was initially reluctant about the concept. Would people want to listen to music cut off from the world? Why not just buy stationary stereos for in-home listening?
However, young product developer Nobutoshi Kihara believed passionately in the Walkman’s potential. He specially ordered samples and pushed for its production against all odds.
Backing Kihara’s vision, Sony chairman Akio Morita approved the Walkman’s release in 1979 despite skepticism. The launch choice proved fantastically prescient. The Walkman’s revolutionary portable, personalized music experience caught fire globally. By 1986, six years after its release, Sony had sold over 50 million Walkmans.
The Walkman made Sony the market leader in portable audio and changed how the world enjoyed music forever. It ranks among the most transformative and successful consumer technology products worldwide. Not bad for a product Sony leadership originally dismissed.
Streaming TV over the Internet – Netflix
Once upon a time, if you wanted to watch a TV show or movie at home, you had limited options – catch it live, rent a physical copy, or buy a DVD. But in 2007, Netflix had a vision to deliver video entertainment in a whole new way – over the internet.
At the time, industry experts scoffed at the idea. Could internet speeds and infrastructure reliably support streaming high-quality video content? Why watch shows on a tiny computer screen? Yet, against the tide of skepticism, Netflix trusted its instincts and offered subscribers the option to watch movies and shows online.
The impact was jaw-dropping. Netflix’s streaming service skyrocketed to over 200 million subscribers globally. Countless competitors scrambled to create similar offerings. Watching content online whenever you want quickly became the new normal.
By plunging headfirst into uncharted waters, Netflix reshaped the entertainment landscape forever. Their courage to think outside the box changed how we enjoy movies and shows today. Reed Hastings’ maverick decision ranks among the most forward-thinking and successful tech bets in history.
Adopting a Franchise Model – McDonald’s
When Ray Kroc joined the McDonald brothers as a franchise agent in 1955, he saw untapped potential. At the time, McDonald’s was a small chain of barbecue restaurants in California. Kroc had a vision to expand its reach across America using franchising.
The McDonald brothers were skeptical, and reluctant to relinquish control. But Kroc eventually bought them out and executed his franchise model vision with gusto. By letting entrepreneurs open their own locations, McDonald’s could grow rapidly with limited risk.
The franchise model proved a smash hit, skyrocketing McDonald’s expansion. Only 15 restaurants existed in 1955. Within 8 years, there were 500. Today, McDonald’s boasts over 38,000 locations worldwide. The franchise model laid the foundations for McDonald’s to become the world’s most ubiquitous restaurant chain.
Kroc’s decision to adopt franchising allowed McDonald’s to scale up far faster and wider than the McDonald brothers ever imagined. It was a textbook example of a business decision’s incredible downstream potential despite initial doubts.
Online Bookselling – Amazon
When Jeff Bezos founded Amazon in 1994, he chose to make it an exclusively online business. This was long before buying things online was commonplace. Critics felt Bezos was absurd to only sell books through this newfangled internet thing. Wouldn’t opening physical stores be the smart expansion move?
Yet Bezos staunchly believed the internet would be the future of commerce. He decided from day one that Amazon would live or die through online bookselling.
That early strategic choice to keep Amazon internet-only – despite pressure to diversify – proved visionary. By laser-focusing on improving its e-commerce experience, Amazon honed world-class competencies in online transactions, security, convenience, and customer experience.
When internet shopping boomed in the 2000s, Amazon was perfectly poised to dominate. Their expertise gave them an unbeatable edge over traditional retailers struggling to adapt. Bezos’ controversial early internet-only strategy quickly made Amazon the “everything store” and undisputed e-commerce leader.
Buying Pixar Animation Studios – Disney
Throughout most of the 1980s and 90s, Disney Animation was in a funk. Their films were underwhelming, losing the magic that made earlier classics like Snow White timeless. At the same time, a little company named Pixar was revolutionizing animation with movies like Toy Story.
Disney CEO Bob Iger made the incredibly wise decision to acquire Pixar in 2006. Bringing Pixar’s creative talent under Disney unlocked a new renaissance. Together, they produced massive hits like Frozen, Zootopia, and Moana that enchanted audiences worldwide.
Disney had lost its way, while Pixar was ascendant. Iger’s insight to acquire Pixar rather than foolishly try to compete revived Disney’s animation leadership. It ensured beloved characters and stories would continue delighting generations young and old.
Paying Employees to Quit – Zappos
Happy employees create happy customers. Zappos CEO Tony Hsieh lives by that motto. Since 2004, Zappos has offered new hires $2000 to quit after their first week of training.
On the surface, it seems counterintuitive. Why pay employees to leave? But Hsieh understood unengaged workers can poison customer experience and company culture. By making it easy to opt out, only motivated team members remained. The “Pay to Quit” program ensured 100% employee commitment.
Though unconventional, Hsieh’s outside-the-box decision perfectly aligned with Zappos’ priority on happiness. It created a highly unified team providing exceptional service. Customer loyalty skyrocketed, revenue grew exponentially, and Zappos became a beloved retail brand.
Hsieh proved that sometimes, empowering people to leave is actually the best retention strategy. For Zappos, “Pay to Quit” paid dividends through an incredibly engaged workforce and satisfied customers.
Refusing Buyout Offers – WhatsApp
Jan Koum and Brian Acton founded WhatsApp in 2009. Despite miniscule revenue, their revolutionary messaging app gained meteoric user growth. Soon, Facebook came courting with a juicy acquisition offer in the billions.
However, Koum and Acton spurned the lucrative buyout attempt. They felt staying independent was better for user privacy and product simplicity. The partners made the bold decision to continue growing WhatsApp on their own terms.
Within a few short years, WhatsApp became the world’s most popular messaging app with over 1.5 billion users. Only then, on their own terms, did Koum and Acton agree to a $19 billion Facebook purchase in 2014.
Koum and Acton’s patience and conviction in WhatsApp allowed them to scale the company enormously before selling. By refusing early buyout sums, they maximized value 4 years later with an exponentially bigger deal. Their disciplined persistence cemented WhatsApp as a legendary startup success story.
Switching to Customer-Focused Marketing – Domino’s
In 2009, Domino’s Pizza was in crisis. Consumers and critics blasted their product quality. A Consumer Reports survey even ranked Domino’s dead last for pizza taste.
Domino’s could have tried unsuccessful product tweaks. Instead, CEO Patrick Doyle made the shrewd decision to be totally honest through a revolutionary marketing campaign. Domino’s launched ads directly owning up to their bad pizza and pledging metamorphosis.
Openly addressing shortcomings – almost unheard of for a major company – earned Domino’s admiration. It made customers eager to give their pizza another try. By 2015, Domino’s became the second-largest pizza chain worldwide.
Doyle’s willingness to transparently engage with customer gripes, rather than ignore them, completely rehabilitated Domino’s image. His customer-centric marketing ushered in a new era of growth, perfectly timed as online ordering boomed.
Shifting Focus to Mobile Games – Rovio
For years, Rovio Entertainment created games for PCs and consoles. But the advent of smartphones convinced Rovio’s leadership to radically change direction. In 2009, engineers built a new game tailored for touchscreens called Angry Birds.
The mobile-first approach proved monumental. Casual gaming took off, and Angry Birds became a cultural phenomenon. By 2012, there were 2 billion downloads. Rovio’s profits soared over 900% by 2015.
Many downplayed mobile games as a passing fad. But Rovio’s strategic recognition of smartphones’ disruptive impact perfectly positioned them to dominate as mobile gaming surged. Their willingness to jeopardize desktop gaming paid off big time.
Rovio’s mobile focus was akin to a movie studio betting everything on “talkies” at the dawn of sound films. It transformed Rovio into a gaming juggernaut and household name.
Taking Mini Test Drives to Customers’ Homes – BMW
Deciding on a luxury vehicle purchase is tough without extended test drives. But most customers balk at visiting dealerships far from home just for a test experience.
That’s why BMW made the ingenious move in 2009 to bring test drives right to nearby areas a customer specifies. For a few days, a customer can check out a model on their own terms – on local roads, for errands, with family, and more.
The process makes evaluating a purchase remarkably convenient. Test drives meet customers’ schedules and circumstances. Allowing unrushed hands-on experiences from the comfort of home or work lowers barriers to purchasing.
BMW understood that letting prospective buyers really immerse themselves in a test vehicle would make an indelible impression. Their creative test drive delivery service is stuck in customers’ minds, translating to sky-high satisfaction and sales.
Committing to Same-Day Delivery – Shopify
Amazon Prime’s popularity made ultra-fast delivery the new baseline buyer expectation. For smaller merchants, it seemed impossible to match those shipment speeds. But Shopify envisioned a solution.
In 2019, Shopify acquired 6 River Systems for $450 million to strengthen its fulfillment network. Then, Shopify unveiled an initiative enabling member merchants to provide same or next-day delivery.
Shopify’s logistics investments empowered small businesses to match speeds once limited to retail giants. Customers could enjoy the convenience of quick shipping without defaulting to Amazon. Merchants gained a powerful competitive edge against e-commerce juggernauts.
Shopify recognized that super-quick delivery was the next retail battlefront. Their moves to arm members with distribution capabilities pulled even with Amazon let small sellers flourish. Shopify’s prescient delivery investments bore fruit through happier merchants and patrons.
Advocating for Sustainability – Patagonia
Outdoor apparel maker Patagonia always baked environmental stewardship into operations. But in 2011, founder Yvon Chouinard decided to formally enshrine “benefitting the planet” into Patagonia’s mission statement.
This declaration cemented Patagonia’s commitment to issues like renewable energy, ethical factories, and sustainably sourced materials. It guided innovations like fleece jackets made from recycled bottles and wetsuits crafted from plant materials.
The decision differentiated Patagonia strongly from competitors. Consumers quickly took notice, flocking to support a company focused on more than profits. Revenues tripled within 5 years.
Patagonia proved environmentalism and business success need not be at odds. Chouinard found eye-catching ways for Patagonia to limit impacts while keeping quality high. His sustainability manifesto elevated Patagonia into a leading lifestyle brand.
Implementing Digital Transformation – Microsoft
Steve Ballmer led Microsoft with an iron fist for 14 years. But Satya Nadella brought a radically different approach after becoming CEO in 2014. Nadella made the monumental decision to pivot Microsoft towards services and digital transformation.
No longer insisting that Windows and hardware must rule, Nadella adopted an open-minded philosophy. He injected fresh thinking into aging Microsoft products and diversified into enterprise solutions. Under Nadella’s leadership, Microsoft revitalized, realigned with a new tech landscape, and even partnered with old rivals like Linux.
Ballmer clung to an outdated mindset that almost sank Microsoft. Nadella’s reimagining restored Microsoft to the vanguard, tripling its valuation. He proved even a legendary company can make seismic shifts when the market demands it. Microsoft’s reinvention remains an inspiring case study of tech business transformation.
As this sampling of historic decisions illustrates, some of the greatest triumphs arise from moments of courage, imagination, and conviction. When visionary leaders make bold moves that redefine industries, the ripples can change history.
So for today’s decision makers, take note. Of course, not every risk or innovation will pay off. There will always be naysayers. But tuning out the skeptics and making inspiring choices can lead to the stuff of legend. The companies that shape the future know when to recognize opportunities where others only see obstacles.
