I like collecting stories on really bad business decisions that shed light on how we got to where we are now. So, I’ve decided to start this series on Colossally Bad Business decisions so that I have a ready reference to turn to when putting together talks.

History is about how we got to where we are now. History has much to teach us, but we live in a time when history seems fairly disposable, or irrelevant. History just doesn’t seem to come up in conversation much and rarely, if ever, in business. We’re too busy to deal in abstractions and are immersed in the Cult of the Project Manager. We simply wants to know, what, when, how much, and next steps. Rarely why in any siginficant way, it seems.

Yet, I have been fortunate to meet a number of well educated and successful people in my career and the most interesting ones to me have been older people who had a sense of history and were able to use stories from history to make points about the present. I’m not sure if it’s simply because they’ve lived longer, or if they were educated in a system that had different values than those of my peers in business and younger.

The most accessible that come to mind are Paco Underhill and Neil Howe, both of whom I’ve interviewed. Maybe the comparison with everyone else is unfair because Howe is in fact a trained historian, but Underhill is not. His sense of history informs his work today. How much of contemporary, day to day business is informed by history? Probably little, as the word itself “busi-ness” is all about keeping busy, not about deeper thought.

So, it’s in talks that I’m able to strategize, envision, and inform. Let’s get to the first Colassally Bad Business Decision

How Chicago Became the Meat Packing Plant of the World

Our vision of the American Cowboy came from a time period of twenty years bracketed by the Civil war in the mid 1860′s and the completion of transcontintental railways around 1882.

Before the Civil War, cattle from Texas were driven to New Orleans where they were shipped North up the Mississippi river in paddle wheel boats. The Civil War blocked that, so cattlemen decide to drive their cattle North though Oklahoma. It seems odd now, but back then Texas Longhorns were hated by other cattlemen because Longhorns were hardy breeds that brought ticks to other breeds. Those ticks brought Spanish Fever, also known as Texas Fever, but the hardy Longhorns weren’t bothered by them.

The cattlemen needed to drive their cattle to a railhead so they could be easily shipped East, where the markets for meat lay. The cattlemen’s original goal was to drive their cattle North to Sedalia, MO.

Cattleman Joseph G. McCoy saw the significance of tens of thousands of heads of cattle being driven to a single location. Because of the hostility towards longhorns, he decided Junction City, KS, 221 miles away from Sedalia, MO, would be a better place to drive cattle. But before he did, he visited the President of the Missouri-Pacific railroad with the purpose of convincing him to build a spur out from St. Louis to Junction City. McCoy writes about that experience: Smoking a stogey, the president told him, “It occurs to me that you haven’t any cattle to ship and never did have any, and I, sir, have no evidence that you ever will have any, and I think you are talking about rates of freight for speculative purposes, therefore you get out of this office, and let me not be troubled with any more of your style.”

With that, the President of the Missouri-Pacific railroad made the Colosally Bad Business Decision to kick out the promoter that ultimately made Chicago the meat packing capital of the world, instead of St. Louis. McCoy ultimately settled on Abiline, KS and began shipping cattle to Chicago via the Hannibal and St. Joseph railroad. The rest is history.

A few years later, as business was booming, a salesperson from the MoPac Railroad approached McCoy in Abeline, soliciting his business to ship cattle on their railway to St. Louis. In a delicious turn of events, McCoy said, “It occured to him that he had not cattle for his road, never had had, and there was no evidence that he ever would have, and please say so to his President.”

Source: “Once in the Saddle: The Cowboy’s Frontier 1866 -1896,” by Laurence I. Seidman, 1973. Pp.24-28.