Have you ever made a $100Bn mistake?
|This is what I look like when I make a mistake|
I'm talking about things like sending an email to the wrong person or missing a typo when proofing a document.
If you were to allocate a monetary amount to the 'cost' of these mistakes I doubt they'd ever amount to much. For example, me sending an email to someone that was meant for someone else has seldom had dire repercussions.
So spare a thought for a poor worker bee at a Korean brokerage this week who made a pretty big 'simple' mistake.
Apparently an employee of brokerage Samsung Securities caused chaos in Korea last week when he accidentally made a monster of a typo. He typed 'shares' instead of 'won'.
Why is this a problem? Well, this little typo ended up issuing 2.8bn shares to staff of Samsung Securities which has a total cost of around $100Bn (USD).
Not bad for a typo, right?
Won is the South Korean currency and the employee had intended to pay dividends to staff worth 2.8Bn Won. Instead, he issued 2.8Bn SHARES.
According to The Economist:
It took the brokerage half an hour to spot the slip, during which time 16 members of staff took advantage of their windfall and sold their wrongly allocated stock.
The problem has continued for Samsung Securities though with the Financial Times reporting that a further $300m has been wiped off its share value this past week.
According to the Australian Financial Review:
The fiasco has been dubbed the "ghost stock" incident by major local news media. Regulators are reviewing Samsung Securities' internal controls. The brokerage says it will sternly punish staff who sold the shares, and repay shareholders who lost money when the stock tanked.
"We are going to compensate investors who suffered losses in the widest possible way," Koo Sung-hoon, the chief executive officer of Samsung Securities, was quoted as saying in a company statement.
I guess this demonstrates the significant value of having proper checks and balances in place. How on earth could something like this happen??
|Samsung Securities - they've seen better days|
There's a massive communications challenge ahead of Samsung Securities here. Trust in their key deliverables appear to be massively shaken with the country’s National Pension Service, the world’s fourth-largest pension fund, saying it would cut ties with Samsung Securities due to “concerns of poor safety measures following the financial accident”.
What advice would you give Samsung Securities' CEO? Surely they have to come out with a strong action plan on how something like this will never happen again and the raft of checks and balances they intend to implement.
The reality is, this is where a strong crisis communications strategy needed to be rolled out. Which also means... well.... you should already have a crisis communications strategy.
When trouble strikes it's too late to plan for trouble. Rather, you should be seeking to brainstorm the potential crises your organisation may be hit with and seeking to create strategies to tackle them should they, unfortunately, arise.
So - how ready are you for the $1 or $100Bn dollar typo?