The film Project Hail Mary, based on a novel by SF (science fiction) writer Andy Weir, is about a protagonist who bets everything on a space mission with slim odds after the sun begins to lose its light due to an unknown space microorganism, putting humanity on the brink of extinction. Originally, the term Hail Mary refers to the fervent Catholic prayer offered to the Virgin Mary, the "Ave Maria (Hail Mary)," but in sports it is used as an idiom meaning "a last-ditch gamble."
In 1975, Dallas Cowboys quarterback Roger Staubach of the National Football League (NFL) threw a 50-yard long pass with 32 seconds left in a playoff game against Minnesota. Wide receiver Drew Pearson caught the pass for a miraculous come-from-behind win, and after the game Staubach said in an interview, "I cleared my mind and threw while praying the Hail Mary," making the term "Hail Mary pass" famous.
Corporations in crisis also have times when they must throw a Hail Mary pass. In sports, it is an attempt where "if it works in a game you are going to lose anyway, it is a miracle and there is nothing to lose," but a corporation's last-ditch gamble can lead to far more serious consequences. What choice should a leader make in such a roll-of-the-dice situation? Consider two corporations that changed their fate with bold decisions.
Marvel bets everything to protect its asset
Marvel, now a global content empire, filed for bankruptcy protection in court in 1996. As the comics market collapsed, the company was driven to the brink. At the time, Marvel had a relatively safe path: survive by selling off the film rights to popular characters one by one to major Hollywood studios, such as Spider-Man, X-Men, and Fantastic Four. Then Marvel realized a chilling truth. Cutting off and selling characters might give them breathing room for the moment, but it was merely a "slow death" that would gradually carve out the corporation's heart.
In 2005, Marvel took a bold gamble. It declared that it would produce films itself by borrowing $525 million (about 796 billion won) from Merrill Lynch, a U.S. investment bank (IB), using the remaining character rights such as Avengers as collateral. If the project failed, it was a do-or-die move that would strip away even its core characters and blow the company apart.
But the result was a resounding success. Iron Man, released in 2008, grossed $585 million (about 895.6 billion won) worldwide and opened the curtain on the Marvel Cinematic Universe (MCU). The following year, Marvel was acquired by Disney for $4 billion (about 6.124 trillion won). Had Marvel settled for making ends meet by peddling rights to survive the immediate crisis, today's Marvel would not exist.
Best Buy embraces its weakness head-on
In 2012, Best Buy, the largest U.S. consumer electronics retailer, received a death sentence in the face of Amazon's onslaught. Its share price plunged below $15, the lowest in 10 years. Consumers checked products in person at Best Buy stores and then completed purchases at Amazon's lowest prices. This was the so-called "showrooming" phenomenon, which turned brick-and-mortar stores into an expense burden.
That fall, when CEO Hubert Joly took over as a relief pitcher, market experts spoke with one voice, prescribing, "Aggressively shrink your brick-and-mortar stores and cut staff to slim down first." But Joly gripped the knife by the blade. He instead turned the much-maligned "brick-and-mortar store" into a weapon.
In 2013, he fully introduced a "matching price" policy that unconditionally matched the lowest online prices, including Amazon's. At the same time, he rolled out a "store-within-a-store" strategy, leasing prime store space to Samsung, Apple, Microsoft (MS), Google, and others. He redefined space that had only drained expense as both partner companies' showrooms and a stable rental revenue platform. The gamble paid off. The share price, in the $10 range when Joly took office, soared to around $70 by the time he stepped down in 2019.
What leaders need is not reckless bravado but the eye to discern the essence. Is the stopgap you are about to choose truly a safe alternative, or is it merely buying time on a slowly sinking ship? "Foolhardiness," which is a reckless all-or-nothing lunge, and "decision," which accepts risk after seeing its end, are distinctly different.
Decision and bravado are divided by the eye for the essence
The lesson from the two corporation cases is not a simple message that "in a do-or-die moment, a bold move is necessary." Countless corporations staked their lives and faded away without a sound. What must come first is a cold calculation of the real danger, not blind boldness.
Consider why Marvel's board and Best Buy's CEO Joly were able to throw such perilous gambles. They detected that choices to merely escape the immediate crisis were, in the end, stopgaps leading to death. By shattering that illusion, they could make decisions that overturned the table.
What leaders need is not reckless bravado but the eye to discern the essence. Is the stopgap you are about to choose truly a safe alternative, or is it merely buying time on a slowly sinking ship?
"Foolhardiness," which is a reckless all-or-nothing lunge, and "decision," which accepts risk after seeing its end, are distinctly different. A leader's reason for being does not lie in the competence to glide past crises smoothly. The standard that separates managers from true leaders is exactly the decisiveness to resist the lure of stopgaps and loft a game-tying play.
Plus point
Corporations ruined by avoidance, not decisions, in the face of crisis
Kodak and Sears on the road to decline
Kodak developed the world's first digital camera in 1975, but management abandoned commercialization to protect film business revenue. They ignored the essence and leaned on what was familiar. As a result, the company filed for bankruptcy protection in January 2012.
The U.S. retail chain Sears, when Amazon was rising, defended short-term results by selling off real estate asset instead of shifting online. Then in October 2018, it filed for bankruptcy protection. The 687 stores at the time of bankruptcy were subsequently reduced to virtually the point of disappearance. It was the price corporations paid for choosing avoidance over decision at a critical moment.