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August 29, 2021

It’s the job of a business leader to take tough decisions, whether that means approving a new marketing campaign, giving the go-ahead to a new product line or employing a new manager. But occasionally a boardroom decision changes the course of business (and human) history, even if that outcome seems far from obvious at the time. Here are some brilliant business decisions that changed the world.


Ford offers a pay rise

In 1914 Henry Ford announced that his company would pay auto workers $5 a day, doubling their wages overnight. One executive feared the decision would bankrupt the company.

In fact, it did the opposite. It’s often said that Ford doubled wages so that his workers could afford to buy Ford cars. That may have been a happy side-effect, but the real reason he thought $5 a day necessary was to stop so many of them quitting for an easier life.

For Ford’s continuous-motion production line to work efficiently, it needed experienced operatives. New staff had to be trained, creating delays. The Ford production line was a demanding place, and there were easier jobs elsewhere that paid similar wages. Ford’s $5 decision ensured that his best staff stayed put, and that his production line turned out cars at prices average Americans could afford. Henry Ford’s $5 decision kick-started the golden age of the automobile.


Apple buys a software company

In 1996 Apple was rotten. That year the company lost $816 million. It looked all but finished.

As a last gasp measure, CEO Gil Amelio persuaded the board that Apple needed to buy a software company, and the purchase of a business called NeXT was agreed. It was an inspired choice. NeXT software didn’t save Apple, but its founder - Steve Jobs - did.

Jobs was well known to Apple, of course. He had co-founded that company too, back in 1976, before being forced out in 1985. By acquiring NeXT Apple brought Jobs back into the fold, along with his passion and entrepreneurial genius. Jobs soon became interim boss and later took on the role permanently, while Apple went on to revolutionise personal computing and mobile technology - and break records as the most valuable public company in history.


Intel gets inside

With his high school comedy American Graffiti making big bucks at the box office, young director George Lucas started pitching his next movie idea to studio bosses.

It didn’t go well. Executives didn’t really get the idea of a western set in space, and several turned him down. But Lucas was hot property and 20th Century Fox eventually agreed to make the movie. They offered him a fee of $500,000, three times more than the sum he’d earned for American Graffiti.

And in one of the best decisions in Hollywood business history, Lucas turned down the pay rise. Instead, he asked to retain licensing and merchandising rights to the film. In the 1970s movie merchandise was as rare as successful film sequels, so Fox readily agreed.

The film, of course, was Star Wars, which went on to become one of the most successful movies of all time and spawn a series that today appears immortal. At the same time, it ushered in a new age of movie tie-ins and merchandising. Lucas turned down $500,000, and is now reportedly worth nearly $5.5 billion.


Boeing drops a bombshell

In the post-war years Boeing was a profitable manufacturer of jet engined bombers for the US military. It really didn’t need to bet the farm on a hunch, but that’s what chief Bill Allen decided to do anyway. Boeing invested $185 million in the win-or-bust development of a civilian airliner called the Boeing 707.

Allen’s genius was to believe that consumers would pay for fast global air travel. He had the courage to bet the future of his company on that belief. The Boeing 707 would become an iconic aircraft, with over a thousand built for civilian use. Boeing, of course, remains one of the world’s largest civilian aircraft manufacturers.