Good People---Bad Products

Why Good People make bad products
By Paul Herbig

Like many of you, I too saw Bruce Almighty, the Jim Carney movie about a man having the chance to be God for a short time. I too could empathize with him after suffering blow after blow about “Why do such things happen to me?” that is, “Why do bad things happen to good people?” Which led me to think about Marketing (no I don’t think about it my every waking moment but yes, it does appear I even dream marketing) and the question of “Why do Good People (re Companies) make bad products?” I will be discussing this great dilemma in a series of articles.

Many studies have been made on what factors cause a product to be successful and what factors can explain many of the failures seen in the marketplace. This is an excellent starting point for us to answer our question.

Some of the reasons can be found in the nature of companies. One of the most common reasons behind failure is the ‘sunk cost’ fallacy (this is not just a business weakness, you as consumers see if you can identify yourselves here). Millions of dollars are spent on a project over a period of years. Bugs are found and more money spent. At some point some prophets appear to preach that the product is no longer needed by the market, it has been made obsolescent, too expensive, not powerful enough or any one of a dozen reasons to stop the product development cycle. Yet, the money keeps pouring in until either it hits the market in a silent thump or (as is usually the case) a new regime with no loyalty to the project enters the picture and kills it. Why did it continue even after most of those working on the project felt uneasy on its shrinking success? Because after spending all that money, they felt like they had an investment and could not afford to pull the plug now and see all those dollars float away. (Kind of like why some people marry, isn’t it?) A more proper judgment would be to see the money spent as gone (a sunk cost), and to examine whether it is worthy to spend more good money after bad. But it is human nature not to want to cut and run after spending considerable (time, money, etc) on an investment.

A second major falling comes under the title of hubris. CEOs often have been promoted many times due to their successful efforts on projects. Often this will cause many to believe they can do no wrong and make no wrong decisions. Sometimes a never-destined-to-succeed project is continued or a product kept on the market way past the point it should have been upgraded or pulled, because the CEO believes so strongly that it is the right product, it becomes almost a matter of will. Sometimes CEOs bet the company. Henry Ford for all his successes in the twenties believed, “You can have any color you want as long as it is black” and that affordability was all that mattered. Years past the point it was obvious that differentiation led the market, Ford kept on producing his single color, single version cars. He did finally change but in so doing lost for good his market domination and industry leadership.

A third major failing can be seen in the nature of corporate bureaucracies. The product development process can be an iffy affair and many companies attempt to institutionalize it through procedures and a Product Management Life Cycle process to control it. An excellent idea. However what starts out as a five page guide tends to increase exponentially as the years roll on. Since as in any bureaucracy, avoiding failure is the way to success, the process is designed and modified as necessary to weed out failures (as the years go by, each failure—either in process or product—leads the company to add new sections to the manual to avoid making those failures again). But in so doing the baby (success) is often thrown out with the bathwater. Honeywell’s PMLC process through twenty plus years of tinkering had grown to two volumes each two to three inches thick. It became obvious that the process dominated over the product. No matter how good the product the question became “Have you had your Step 1 (or two, etc) process review yet?” If the answer was no, proceed at your own risk. Products would linger in the process for so long, when they finally saw the light of day, they were obsolete or the market had passed them by. But, the corporation administration was happy as long as the product had successfully passed all phases (call this phenomena the doting of the I’s and crossing of the t’s obsession ).

(To be contin