The Musings Of An Opinionated Sod [Help Me Grow!]


Appetite For Destruction …
March 18, 2010, 6:27 am
Filed under: Comment

Many years ago, the head of R&D at an international consumer electronics company asked me to look at the implications of them being asked to continually develop/launch new products and brands.

Without going into too much detail, what I saw shocked me.

In essence, the senior guys at the company were demanding their R&D guys cut development time by upto 50% ensuring that there was a constant stream of new news to drive communication, sales and profit.

Whilst I understood the economic possibilities of this strategy … especially given their increasing competition … I couldn’t help but feel the implications on the brand were alarming, leading me to write a paper to the organisations board entitled:

Why The Quest For Every Possible Cent Of Profit Will Lead To Loss.

The basic premise was that the way this company looked at their market was ‘how many products can we sell them’ … and whilst that was all very well and good … the reality was they had failed to take into account a number of issues from igniting customer dissatisfaction [basically the fact people will get pissed off when a product they’ve just bought is superseded within 3 months] through to a total disregard for the economics of people’s budgets [in essence they ‘forgot’ that people have many commitments and activities that need to be satisfied so it would be impossible – not to mention ridiculous – to assume they would spend every pound/dollar/cent of their budget/income/credit card on their products each and every month]

However the bit that really scared me was the speed of development they wanted to embrace.

By cutting get-to-market times by upto 50% [without dramatically increasing the R&D budget/staff] I couldn’t help but feel corners would have to be cut, resulting in mistakes and problems that very quickly would affect people’s view and trust of the brand, ultimately encouraging them to choose or seek out alternative manufactures – regardless of price-point, distribution and/or features.

Worse.

The R&D investment that was being made was focused more on product evolution rather than innovation – a trait this brand had been built on – so not only were they going to be cutting corners, it was going to be on products/brands that were no longer breaking new ground, ultimately making brands with a lot of good-will, worse.

Despite the full backing of the R&D department, my paper was brushed aside with one of the most condescending rationales from the global head of marketing … and you know what, he was right, because for 3 years they enjoyed record share and profits.

Then it all fell apart.

Badly.

Products that were once seen as the backbone of the company’s reputation were now seen as expensive and unreliable … and when they did release fundamentally new products, they were lacklustre, making you feel they were developed for the sake of development rather than answering a real market opportunity/need.

Fortunately the decline in innovation, quality, reputation and – most importantly – sales, resulted in a change of approach and attitude however even today, they are still fighting the demons of those mad few years of trying to vacuum up every possible penny from people’s wallets and whilst they still were able to make a profit [but only just], it was a real lesson for me both in the arrogance of brands and the power planners have to get to the core issues, not just the communication elements.

The reason I write this is that over the last few weeks we’ve seen major recalls by Toyota, GM and Nissan and I can’t help but feel I’m seeing history revisited, except instead of greed driving the corporations pressure on R&D development times – it’s survival … and whilst I can sort-of understand why that would happen, the thing is as soon as you forget your reputation is only as good as your latest work, you’re investing in your destruction.

Whilst progress and ambition are fantastic – and to a certain extent, vital – attributes to have, it would be pretty useful and beneficial if companies remembered the importance of what Harrison Ford calls the value of value.


39 Comments

very serious post today campbell. i dont know what to fucking say but thats becaus im full of fucking guinness and my head has started to fucking leave my body.

Comment by andy@cynic

you didnt share the fucking blame with shareholders. you always mention them. standards are slipping.

Comment by andy@cynic

do you think people cant work out youre talking about fucking sony? do you think were that fucking stupid? thanks a lot buddy.

Comment by andy@cynic

did forest lose again?

Comment by andy@cynic

did you pay for dinner or lee? if its you (its always fucking you) i hope you took him for a singapore meal deal and not his usual fancyfuckingpants place.

Comment by andy@cynic

Put it this way, you’re right on one bit and sadly wrong on the other. Ha.

Comment by Rob

Your hospitality was very generous and very enjoyable. Thank you Andrew.

Comment by Lee Hill

Are you OK Andy? Guess the Guinness kicked in? LOL.

Another great post today Rob. I know in the example you cite, the motivation to launch more and more products was to rapidly increase market share and profit but I’m not sure if the Toyota situation was based on the same management need for greed.

Maybe it was, but Toyota feels quite a different company in terms of culture to the one you badly don’t name in your post. 😉

Regardless, the issue you raise is important especially as an alternate role model is there for big business to see.

Even though Apple launch multiple products throughout the year, they tend to reveal only one kickass showcase product per 12 months because they spend the time to get it as right as it can possibly be.

This hero product attitude means they only require 1 definitive product launch per year and yet they still can drive constantly increasing profits. Well they did till ipad. (Sorry Baz)

I wonder how much of this fast production line mentality is driven by having to feed the fat cats or the over resourcing that tends to take place during good times?

Speed and greed may go together well at the beginning but it never tends to last except for banks but they don’t even pretend to have any corporate morals.

Comment by Pete

What Andy said in comments 1 & 3-5.

Comment by Billy Whizz

Julian Temple’s Requiem for Detroit suggests that in the 60s, the car companies were producing a new model a year for exactly those reasons. I guess it works in a growing market, but not in a mature one where, as you say, innovation is much harder.

(That said, I’m not sure if the recalls actually have anything to do with this – http://www.washingtonexaminer.com/opinion/columns/OpEd-Contributor/I-am-not-afraid-of-my-Toyota-Prius-87361597.html – but of course the car companies can’t be seen to point to the age and height of the drivers. Time will tell.)

Comment by John

I’m with Pete and not just because I want to balance the comments against the madcap antics of our drunken creative representatives.

I am unsure whether Apple is as good a role model as Pete suggests. They are certainly less prone to multiple new product launches but I can’t help feel that if they believed they could get away with it, they would.

Saying that, the fact they know they can’t do this and maintain standards is the pivotal point.

Comment by George

I agree with your point John, especially in the early days of a business, but the company Robert refers to in his post were prepared to lower standards in a bid to build even greater financial inflow because they arrogantly believed they could pull the wool over the publics eyes while also undermining the talent and dignity of their R&D guys.

Comment by George

come back billy, the nerds are revolting.
revolting by name revolting by fucking nature.

Comment by andy@cynic

Are you OK Andy? This behaviour is mad even for you.

And don’t give me your “I was celebrating St Paddy’s because ‘m 1/32th Irish” … I hate that shit, not because it is isn’t true, but because it means you’re becoming American because they’re the only people who define their heritage in such bloody micro-terms.

I’m with George and Pete and John … but that’s hardly surprising given to side with Andy or Billy would indicate I’ve had a brain anurism.

Comment by Rob

I believe Andy is undertaking an in-depth ethnographic study.

Comment by John

Andy doesn’t have access to any freebies John, it’s a wasted fake compliment.

Comment by Rob

cock

Comment by andy@cynic

If you make stuff that makes a real difference to some aspect of people’s lives, they will feel enriched, they will feel indebted to you and they will feel inclined to buy more.

If you’re just shifting units, they won’t.

Comment by John

Funny, that’s pretty much what I said at the record industry conference last year … if they continue to approach music as ‘units’ and forget just what it means to people, then they’ll end up only producing souless, valueless units which will turn people away rather than turn them on.

Comment by Rob

Was the global head of marketing fired after it all went tits up, did he stay and orchestrate the change of approach, or was he long gone to greener (excuse the bad pun) pastures on the back of the three fantastic years he’d just had?

A bit like in finance and other fields it’s hard to fight that attitude when you’re evaluated, and rewarded in terms of units you shifts, profit you make……….or awards you win.

Comment by rafik

Don’t forget Rafik, there are also lots of executives who are recompensed beyond most people’s wildest dreams for getting things wrong as well. What a strange World we live in.

Comment by Lee Hill

He left just before the myth came crashing down. He went to a competitor – a Korean company – who purely coincidentally [cough cough] followed an almost identical strategy resulting in the same result and situation … a result and situation I should add, they’re still trying to get out of.

Why companies haven’t realised there’s something wrong with marketing directors having an average ‘lifespan’ of 2 years, is beyond me.

Comment by Rob

yay!! rob’s back! as is andy!! woo hoo!

excellent post rob – you are always a sucker for supporting the r&d, which i think is why i like you. or maybe i like you because you chose to lead in with g’n’f’n’r. man that was a great album.

on one hand i fucking hate greed. but on the other, i admire it as an amazingly powerful force for destruction.

it’s an unsustainable business model, yet the one that attracts the weakest of business minds. it’s an evolutionary motivation that darwin and homer (the greek) would be proud of, whereby those weak enough to succumb are eventually crushed by the true nature of the market, which is a fickle, but tender system of artifice and authenticity.

given the anxiety in the top tiers at the moment, the true courage of the world’s business leaders is going to be interesting to watch over the next 5 years.

Comment by lauren

I believe Robert would prefer to be regarded as a sucker for standards Lauren. Well he is in marketing.

Comment by Lee Hill

Yes, that’s much better Lee. Ha.

Comment by Rob

I am fine with greed.

I am fine with making as much money as is physically possible.

The issue is HOW you make it and WHAT you do with it once you’ve got it … and the company in question made it by encouraging lower standards for the goal of lining their own bonus, not to help lead the company and its employees to a better, brighter, more sustainable future.

You can get away with it … but like all conmen, you get found out eventually, it’s just that often the real crims are long gone and living off their ill-gotten gains.

And what hurts most is the company in question had honour and integrity at the very, very top [and very, very bottom] … but the competitive culture of the middle tiers led to shortcuts and risks being taken in a bid to ‘shine and grow’ and while these should have been picked up, the fact is it demonstrated a company that had started to make ‘units’ not products based around deeply held beliefs and philosophies.

I AM a sucker for R&D aren’t I Lauren, ha!

Comment by Rob

i think greed is separate from a desire to succeed and to make money. i see greed as the inability to have scruples attached to that desire.

Comment by lauren

This is a quite excellent post Robert, reflecting the danger of a blinkered profit chasing approach over intimately understanding your audiences needs and broader life responsibilities.

Fits quite well with yesterdays post, the one where you talk about a dyslexic bearded gentlemen with a distinguished collection in jumpers.

Comment by Lee Hill

i was thinking much the same thing lee.
he doesn’t seem greedy to me. but maybe i’m a sucker for a gentleman with a distinguished collection in jumpers.

Comment by lauren

I will now rant about the Ipod Shuffle. I bought one a couple of years ago for various fitness related activities. I was small, clipped to clothes easilly and even a muppet like me could operate it.
After 18 months it broke. Not too happy about this, but hey, it had taken a beating.
To my horror, I couldn’t replace it..they’f changed it to this ridiculous thing that didn’t have any buttons, just a rickety little thing on the headphone cable that anyone on the move (what it’s designed for) wouldn’t be able to operate.
Still, with no choice I bought it. Not only were my worst fears confirmed, it was a pain to operate and I kept getting playlists instead of the track after ‘Smack My Bitch Up’ – it broke. The volume took on a life of it’s own, playlists changed without asking.
I got it replaced, same thinh happened.
So I gave up and bough a Nano at twice the price, complete with another £20 for armband.
Sounds to me like corners were cut AND they ‘developed’ the product without asking anyone if they wanted it and knackering up it’s primary benefit.

So when I specify my workphone soon, it will not be an Iphonem it will be an Android.

(I’m in a bad mood again)

Comment by northern

suddenly cynic is looking a much better fucking option than being god jobs tampon isnt it baz?

and can lauren stop fucking complimenting campbell on his choice of picture about a band he loves, itll only convince the bastard theres a chance well all start to love fucking queen. seriously ive seen him get excited for less and for more fuck all chance scenarios than this.

Comment by andy@cynic

I hope you haven’t chosen Android because you’re in a bad mood Northern. It is an excellent product that will bring a smile to your face once more.
Additionally, our friend and colleague Jonathan, was integral to its development and he’s a very nice man who deserves lots of praise and support.
I hope that has convinced you.

Comment by George

Fucking funniest thing I read in ages…U the king of thE backhandslap thing

of course I know it is more

Comment by Niko

i hope to fuck youre talking about me and not auntie niko. dont fuck up a wonderful friendship.

Comment by andy@cynic

George is my favourite Beatle.

Comment by niko

Nah, the geeks here have all told me it’s better.

Comment by northern

Are all George’s mild and easily manipulated?

Oh hang on, George W was hardly mild was he … OK, let me rephrase … are all George’s easily manipulated?

I think they are you know, ha!

Comment by Rob

What i find so mad about that is just how much it went against the whole belief and values of the company. Blind focus on money and short term. We all know that were it not for playstation they would have been seriously fucked. I welcome back the old sony like a redeemed drunk, if only they had listened. Also, this was probably why sony screwed up in flat screens initially, focus on sucking profit from trinitron meant they were left behind.

Comment by Rob Mortimer

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your skin problem.

Comment by Cecil




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