Weak links and the $1.26 billion mistake

One of my favorite print ads of all time is an old Xerox advertisement.  It showed a large photo copier along side a crusty green eye-shade type with rolled up shirt sleeves manually stapling towering stacks of multi-page documents.  The headline said something like “This deluxe model copier makes umpteen copies per minute, but Higgins here can only staple 28 sets per hour." 

The marketing campaign, as you might have guessed by now, was introducing a new all in one copier that could collate and staple.  Did I mention the ad was old? 

But seriously, it's message is timeless: you’re only as productive as your weakest link.  It’s a message that has stuck with me for decades because it is transferable to business in so many ways.

I was reminded of it recently when I read about the $1.26 billion default judgment against PepsiCo.  The case was brought by two Wisconsin men who claimed the soft drink giant stole their idea to bottle and sell purified water.  They base their claim on the alleged misappropriation of trade secrets disclosed in discussions with distributors who they then claim passed the information to PepsiCo who in turn allegedly used it to develop and sell Aquafina brand bottled water.

The huge, $1.26 billion default judgment happened because PepsiCo didn’t show up in court.  Sounds pretty amazing, but that’s exactly where “Higgins” comes in.

The plaintiff reportedly served the lawsuit on PepsiCo’s registered agent in North Carolina in June.  But PepsiCo says they didn’t get the case from their North Carolina agent until September and the papers were put aside by a secretary (aka "Higgins") who didn’t bother to tell anyone at the time because she was “so busy preparing for a board meeting.”   As a result the company didn’t “know” about the suit until nearly a week after the default judgment was entered. 

Dumb things can and do happen.  They can also be darn expensive.  It just goes to show you that even a large sophisticated company can have a weak link. 

Fortunately PepsiCo Inc. was reportedly able to persuade a judge to vacate the default judgment and have an opportunity to defend the case on the merits, not get dinged on a procedural technicality.  That’s the good news.

The bad news is that getting the court to vacate the default judgment took time and money that could have been better spent on other things.   I bet PepsiCo won’t let that mistake happen again.

There's nothing like training and mindfulness to keep things on track.