In the January/February 2005 edition of Business 2.0, they list their 5th Annual 101 Dumbest Moments in Business. This post is brought to you by #45 on this list of often unbelievable and embarrassing grouping of business blunders, affectionately titled If I wanted tasteless bread, I would've bought that Atkins Crap.

Faced with flat revenue, declining profits, stiff competition, and non-existent profit margins, Intersate Bakeries - the maker of Wonder Bread and Twinkies - filed for bankruptcy protection last September. Now under a formal SEC investigation on their handling of workers' compensation reserves, the company continues to claim itself a leader in their market and blame there woes on the popularity of high-protein, low-carb diets such as Atkins and South Beach.

In an effort to boost profits by reducing waste and saving money, the makers of Wonder Bread came up with the idea to extend the shelf life of their product. This if-you-can't-sell-it-fast, make-it-last-longer thinking led to a product change that left consumers stating the bread now felt "gummy" and "doughy", contributing to a net loss of $25.7 million in fiscal 2004 and ultimately bankruptcy.

Who wants gummy bread? Don't we all want fresh, soft bread?

I would love to have been at the meeting where the solution to generate more revenue and profits from Wonder Bread resulted in a decision to lengthen its shelf life. Can you picture the discussion? Likely there were self-congratulations around the table when it was stamped approved..."We'll boost profitability by extending the shelf life of our bread to consumers that won't by it fresh."

In other words, the bread making "leader" addressed their sinking revenue and profitability by putting "gummy" bread on the shelves in hope that keeping it there longer increases their sales per baked loaf; all the while failing to appreciate the buying public buys fresh bread. That's not what I call a "leader's" decision.

Interstate Bakeries has an underperforming product and instead of focusing on improving it to meet the demands of their market, they blame the market and customer ( they're buying low-carb Atkins and South Beach dietary foods) for their weak sales and then completely ignore their customer's number one buying criteria - fresh and soft.

The most amazing part of this tale is Business 2.0 thought there were 44 dumber moments in business last year. Incredible!

Here's the take away from this post - if your product is underperforming, don't blame your market and prospective customers. Customers tell you everything you need to know about your product and the current status of your market. Don't fight it be putting "gummy" bread on the shelves...learn from your market and lead. Build the best, care the most, and you're sure to grow a profitable business.