How not to run a business

Top tips on how to lose money and alienate people

Team GB are doing us proud at the Olympics - which is more than can be said for outsourcing group G4S, who made such a hash of security the army had to be called in. It is just the latest in a long line of corporate cock-ups.

So, for all those high climbing executives who want to plummet from the summit, for all those businesses looking for their next blunder and for all those aspiring start-ups looking to crash and burn, here are some key pointers on how to lose money and alienate people…
 
Criticise your own product (also known as 'The Ratner Rule')
 
Gerald Ratner was the past master at this. When making a speech about his jewellery company, Ratners Group, in 1991, he admitted it sold 'total crap'  - going on to say that his business model was based around selling earrings that were 'cheaper than an M&S prawn sandwich, but probably won't last as long'. Ratner's shares lost half a billion pounds in value - that's the equivalent of a lot of earrings.
 
Not to be outdone, Barclays Bank chief executive, Matt Barrett, claimed, during a Commons Treasury Select Committee meeting investigating the high interest rates on credit cards, that he wouldn't personally use a Barclaycard because they are 'too expensive'.
 
Get involved in a scandal (preferably an illegal one)
 
GlaxoSmithKline recently had to pay $3bn (£1.9bn) in the largest healthcare fraud settlement in US history - pleading guilt to promoting two drugs for unapproved uses and failing to report safety data about a diabetes drug to the Food and Drug Administration. It was also found guilty of giving kick-backs to doctors.

Then, of course, there was Barclays, which recently adopted the interesting strategy of playing around with the banking industry’s interest rate. CEO Bob Diamond’s reign saw Barclays become the jewel in the crown of corporate calamities.

Not to be outdone, News Corporation’s phone hacking scandal hit the headlines around the world after hard-nosed journalists listened in to the conversations of hapless celebrities. It brought down a newspaper and could well end a family dynasty.
 
Look down on your customers
 
A decade after Gerald Ratner’s fantastic faux pas, Topman's brand director, David Shepherd, inferred that his customers were 'football hooligans or whatever'. He claimed they only wore suits when appearing in court, adding: "Fitted sleeveless T-shirts were not going to work for beer-swilling lads."
 
Meanwhile, former EMI executive Alain Levy offended practically everyone in Finland by suggesting that they lacked a certain musical talent. He quipped: "We discovered we had 49 artists in Finland. I don't think there are 49 Finns who can sing." Music to their ears, no doubt.
 
Ensure everything that can go wrong does goes wrong (then take a long time to fix it)

 
This particular event is dominated by our fine financial institutions.
 
The latest in a long line of banking woes was recently topped by a huge IT cock-up at NatWest and Royal Bank of Scotland that left millions unable to access their bank accounts. The bank has had to put £125m aside - mostly to cover the cost of compensating unhappy customers.
 
Over the years, the banks have provided some great examples of taking the 'service' out of customer service.
 
Unearth an embarrassing name
 
Scandinavian furniture giant Ikea’s popular child's bed 'Gutvik' caused a stir in Germany, due to its similarity to a German phrase meaning 'good f***’. Meanwhile, US car giant General Motors plumped for the name Buick LaCrosse for its sedan in Canada even though 'la crosse' means 'masturbation' in Quebec slang.
 
Ignore your customers
 

With breathtaking audacity, movie rental business Netflix tried to make a price hike appear like great news for customers with a poorly-judged announcement. Customers vented their anger everywhere and left in droves, while Netflix remained schtum.  Throw in a few IT glitches and an aborted rebranding and the business produced a textbook example of how to lose hundreds of thousands of customers.
 
Let customers know how much money you are making from them
 
E.On boss Mark Owen-Lloyd joked that rising fuel costs meant 'more money for us' - just what cash-strapped customers facing record heating bills wanted to hear.  The energy group was forced to apologise 'unreservedly' for his remarks.
 
Make your staff proud
 
A few years back John Pluthero, the outspoken chairman of Cable & Wireless UK, caused the company embarrassment when he sent a memo to staff, which said: 'Congratulations, we work for an underperforming business in a crappy industry and it's going to be hell for the next 12 months.'
 
Show a lack of taste
 
Broadcaster ITV served up a great example of how to generate some unwanted exposure by being fined by an Australian court for allowing a rat to be killed and eaten by contestants on reality TV show 'I'm a Celebrity Get Me Out of Here', after a furore by outraged animal rights activists.
 
So, come on bad businesses of Britain - you now know what you have to do to annoy and alienate your customers. Seriously though, the moral is avoid disaster by taking these salutary lessons others have suffered on board - learning from the mistakes of others can be priceless.
 
Andy Yates is an experienced entrepreneur, business mentor, advisor and angel investor and helps a portfolio of exciting growth businesses reach their potential, including Huddlebuy, Europe’s largest business deals website. Follow Andy on Twitter: @smallbizhelp. Follow Huddlebuy on Twitter: @huddlebuy