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Tech's 4 Dumbest CEO Moves of 2016

By Daniel B. Kline – Nov 19, 2016 at 12:23PM

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Sometimes good bosses do dumb things, other times, maybe the wrong guy was in charge.

Becoming the CEO of a major technology company takes an incredible amount of skill, hard work, and a bit of luck. You don't get to the big chair without doing a lot of things right. Still, even the best and smartest chief executives sometimes make mistakes.

Steve Jobs had the Newton, Steve Ballmer had the Zune, and Steve Case thought the whole AOL/Time Warner merger was a great idea. Sometimes these errors amount to a forgivable oops -- like the Newton, which you can argue led eventually to the iPad and iPhone. At other times, one big blunder can end a career.

A number of technology CEOs made dumb moves in 2016. Some will survive them -- and have a good story to tell -- while others will lose their job.

Perhaps don't threaten to assassinate anyone

PacketSled, a cybersecurity start-up based in San Diego, may not be the biggest or best-known technology company, but its now-former CEO Matt Harrigan did something so dumb, it had to lead this list. Harrigan made comments on social media calling for the assassination of President-elect Donald Trump. He quickly deleted the remarks, but the damage was done as his post was copied to a variety of social media sites. The company responded quickly, posting on its website:

PacketSled takes recent comments made by our CEO seriously. Once we were made aware of these comments, we immediately reported this information to the Secret Service and will cooperate fully with any inquiries.

Harrigan was originally placed on administrative leave, but he quickly offered his resignation, which the company accepted.

Samsung Electronics CEO was slow in dealing with his company's exploding phone problems. Image source: Kārlis Dambrāns, Flickr.

Samsung waited on the Galaxy 7 note

Samsung (NASDAQOTH: SSNLF) Electronics Chief Executive Kwon Oh-hyun may not have been responsible for the Galaxy Note 7's propensity to blow up, but he carries some of the responsibility for how the company responded to it. In early September, when the company admitted that it was aware of 35 cases of exploding phones, it did not immediately initiate a total recall. That proved to be a disastrous choice for the brand, but even a month later, when the company halted sales and exchanges of the device, it did not issue a full recall.

The complete recall was not issued until Oct. 13, more than a month after the problem became evident, but Oh-hyun appears to be getting a pass on mishandling the matter. Perhaps it's because Samsung has significant goodwill built up, or maybe it's because Oh-hyun is not a public figure in the United States. It's harder for the public and shareholders to call for the head of someone they don't know.

For his part, the CEO seemed confident in his company's ability to move past the crisis. He called on his employees to take steps to avoid any future problems, Fortune reported.

"We have a long history of overcoming crises," Kwon said. "Let us use this crisis as a chance to make another leap by reexamining and thoroughly improving how we work, how we think about innovation and our perspective of our customers."

Follow the rules

Zenefits, a technology company trying to shake up the health insurance brokerage industry, saw its founder and CEO Parker Conrad forced to resign after it was discovered that the company was cutting corners to deliver its stunning growth. A series of stories by BuzzFeed News revealed that the company employed unlicensed brokers to sell insurance to customers -- revelations that resulted in scrutiny from regulators and the undoing of many of its sales.

"The fact is that many of our internal processes, controls and actions around compliance have been inadequate, and some decisions have just been plain wrong," new CEO and former COO David Sacks wrote in a memo published by The New York Times. "As a result, Parker has resigned."

Basically, Conrad's mistake was allowing his company to break the rules to hit the numbers that fuel its "incredible growth" narrative. That approach not only cost him his job (and maybe his reputation), it hurts the company going forward, perhaps to a point it can't recover from.

This mistake may have changed history

During the run-up to the 2016 United States election, Facebook (META -1.54%) was filled with fake news. CEO Mark Zuckerberg has been clear that he does not believe this is a big deal, calling it "a pretty crazy idea" that "fake news on Facebook, which is a very small amount of content, influenced the election in any way," The New York Times reported.

Facebook employees, at least some of them, do not agree with their boss. A group of them have formed an unofficial task force to examine the role their company played in promoting fake news during the election cycle, BuzzFeed News reported.

"It's not a crazy idea," an unnamed Facebook employee told BuzzFeed News. "What's crazy is for him to come out and dismiss it like that, when he knows, and those of us at the company know, that fake news ran wild on our platform during the entire campaign season."

Zuckerberg's decision to ignore this before the election (and dismissing it afterward) won't cost him his job, nor will it really have any personal consequences for him, beyond upsetting some of his employees. It's possible, however, that ignoring this issue changed the course of the election, American history, and perhaps all of our futures. That's a whoopsie at least as bad as the Newton, and maybe one that in retrospect will look worse (or better) in years to come than it does now. 

Daniel Kline owns shares of Facebook. He owned a Newton, but not a Zune. The Motley Fool owns shares of and recommends Facebook. The Motley Fool recommends Time Warner. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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