Why Good Products Fail Despite Having Best Engineering Teams And Process Management Systems ?
— from Good Omens, by Terry Pratchett and Neil Gaiman
With the corona virus pandemic growing exponentially across the world, we are all locked down in our homes. At the time of writing this article, I have been at home without venturing out for 15 days and I still have at least 15 more days to go like this. While more than 30,000 people are dead with more than 6,00,000 infected, the pandemic is still growing with no signs of slowing down.
Dr. Li Wenliang from China had discovered the Corona virus strain in early December. He notified his colleagues and wanted to alert about the SARS kind of virus that he had found out. He wanted to alert the world that something deadly is coming up. But chinese authorities shut him down before he could say much. To the extent that he was made to apologise publicly for rumour mongering. While the chinese government was successful in shutting him down, they failed to notice the spread of corona virus. By the time they realised the scale of this disease, it was too late and few cities were completely taken down. Within a month, the virus had spread to South East Asian countries and parts of Europe. European countries failed to notice it again causing a pandemic and now, the USA is leading with most number of people infected with corona virus among all countries in the world. This pandemic not only caused the issue of healthcare around the world but has also caused the early onset of economic slump or recession at an unprecedented scale that will result in mass scale unemployment, loss of trade, extreme supply with low demand, real estate price crash, healthcare crisis with social and emotional instability. And it will leave the world scarred for the next 3-5 years making this event as one of those that are written in history books being mentioned for next 100 years at least.
What Dr. Wenliang had noticed or discovered was the initial change in the ecosystem that caused the butterfly effect to take place.
What is Butterfly Effect ?
As given in wikipedia: In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state. In a simple language, butterfly effect can be characterised as a small event triggering a chain of events having huge implications on a system such that the system can go into an irrecoverable state. Butterfly effect is something that almost everyone fails to notice because the tiny event that causes it may not even be related to the large catastrophic events that it can cause.
What is the connection of butterfly effect and good products ?
Although the concept applies to all kinds of products, I’ll focus on B2B software / tech products. I have spent my last 20 years building B2B tech products in different roles and have been part of many products being successful or going to the grave. All B2B products companies always have focus on some kind of verticals as they develop products related to particular industry or domain. For example : GE healthcare sells its products to hospitals, Slack works mostly with tech companies (not so much with Banks or manufacturing sector), Stripe works with companies who need to collect online payments, Akamai works closely with media industry, and so on…
All these companies have product managers focussing on the product growth and strategy while working with engineering to define the “right” product. And the senior management is looking at the top line and bottom line while keeping sharp eye on competition and market share. But then, many good products or companies die even after having a successful run. Why ?
Let’s consider a hypothetical example :
A good B2B product from company ABC was being bought by many large customers in the market. ABC was growing as customers are adopting the product fast. As the product was growing, ABC was setting up processes and departments to help customers use the product effectively. Be it 24⁄7 support, project and account management, finance support, product support, engineering interfacing or anything like that, ABC was making sure that the customer is able to reach out for any help. but even after all this, one small customer (say D) was complaining about certain problems in the product that was causing her some stress. The stress was not only financial but also emotional as she was losing face in her own organization. all the departments of ABC while trying hard were still struggling to resolve the problem. ABC’s management had taken notice but it seemed like an isolated incident as other customers are running fine.
Over a period of 1 year, ABC added 3 new customers in its portfolio but lost about 8 existing customers and in the following year, ABC wasn’t able to sustain the product and had to shut down.
What had happened in these two years?
In the B2B world, while the industries are large with huge market sizes, people are socially connected and talk to each other. All of the industries ( be it airlines, media, healthcare, banking, etc.) have their conferences and have their offices in business hubs in different cities. People meet and talk. This small customer (D) started discussing its problem about ABC’s product with another customer ( E ) of ABC who, in general, was happy. But when the second customer (E) heard about the problem , she also started thinking a bit about it and questioned about the effectiveness of the product in her own organization. Over a period of time, vendors and competitors got the wind of the issues and the word got out. While the company ABC was trying to figure out the issues with the product, they started losing customers faster than they were winning deals. Sales team of ABC was facing the heat in the market. Existing and potential customers were losing trust on ABC and its product. Sales cycle had become much longer than earlier. This lead to frustration causing distrust internally in different departments and in turn, leading to blame game. The system fell like a house of cards.
That small customer’s complaint was the initial change that had caused the butterfly effect. It started a chain of events which led to other customers losing trust in the product and identify the issues that weren’t even noticed earlier. When this happened, it created a lot of pressure on engineering and product teams to roll out features and fix issues faster , in turn, causing more issues and more frustration for the customer. This chain of events caused a downward spiral when the competition kicked in and customers of ABC started the switchover.
Finally, a good product having potential of leading the market disappeared from the scene “overnight”.
What customers buy ? Looking through the lens of Jobs To Be Done framework
While the product is same, every customer buy a product with different expectations. While someone may buy an SUV for long trips with family, another person may buy an SUV to drive it as a taxi and earn livelihood. SUV is still the same. Media companies use CDN to distribute content across the world, but some want to keep the costs low but the others may want the best streaming experience. CDN will still be the same.
So, how does the same product cater to different expectations when “one size fits all” doesn’t work as a strategy at least in B2B environment ? To achieve this, companies create processes. But then most of the companies that fail create processes to support the product, not the customer. While the support department may be called customer support, it is actually supporting and defending the product by making fixes to keep the product running and to make the customer complaint go away. Sales is pitching the product to customers, not to solve her problem but to sell its product and earn incentives. Engineering is writing code to make the feature work without worrying about scale and performance. Management is just reviewing the margin numbers.
Clayton M. Christensen says, “People buy products and services to get a job done”.
The late Harvard Professor and a well known author innovated a concept or framework called “Jobs To Be Done”.
The theory behind this framework is to identify why the customer is buying the product. In B2B domain, while an organization is paying another organisation for the product, its humans who are decision makers and influencers. Even in B2B deals, product features are an important consideration but the buyer is also putting her own reputation at stake inside her organization when she recommends any product. This just makes it more complex as buyer has locked in her emotional side into the product even in this B2B decision. When the product doesn’t perform “as expected”, while the support department of buyer is interacting with support department of seller, there is a feeling of discontent where people start questioning the decision makers and influencers. In order of save themselves, the buyer starts discussing issues in social forums connecting with other buyers seeding doubt in the minds of others too. When the network effect happens, It doesn’t consider the positive or negative side of effect. It can go either way and generally, negative trending happens much faster than the positive one.
Ideally, while building products and processes, the companies should consider the nature of the jobs that the customer wants to accomplish. Everyone knows about your product and its features so you don’t need to project it. During business discussions, discover the answer to a simple question “Why is this customer buying our product and what problem is she trying to solve ? “
Then, just categorise that one answer into different categories of jobs that are not just functional but social and emotional. This means the buyer has certain unique context and circumstances that doesn’t apply to any other buyer.
Once you identify the job, create a job statement that has 3 key components : Action, Object , Context. A simple template of a job statement can be :
Once you create the main job, create some related jobs and prioritise them by asking the buyer to rate the jobs in order of priority. This helps understand the needs of the buyer. Once that happens, now you can align your internal company processes to the needs of the buyer. While every organization has the same kind of departments or org structures, the smooth functioning of the departments depends on how they interact with each other with respect to each customer. For one customer, functional product might be a priority leading to more communication with product support and engineering, but for another financial impact might be more important than features of the product leading to proactive communication with analysts of the company. And may be for the third customer, features or financial impact is lower priority than the impact it may have on the end user experience.
These different job outcomes involve the same product, may be 90% of the same features and same teams with same processes but the priority of the jobs and customer need drives the requirements of where the emphasis should be in the process pipeline and can help in identify what you think is okay can be a bottleneck for the customer.
Product and Processes are important but if they do not provide a smooth experience and does not help in accomplishing the job for the customer then they don’t matter. When we think process, we think assembly line. But we always forget that there are always multiple paths in the same assembly line to address different needs of different customers.
If the companies apply “Jobs To Be Done” framework, they may still not notice those small events having the capability of causing butterfly effects but can definitely reduce the probability of those small events significantly and protect their products from failure.
By the way, two months later in early February 2020, Dr. Li Wenliang died from the very same disease that he discovered.
— Jules Henri Poincaré (1854–1912)
References & Suggested Reading:
- Deterministic Nonperiodic Flow - Edward N. Lorenz
- The Butterfly Effect: Everything You Need to Know About This Powerful Mental Model
- The Butterfly Effect: Managing Your Organization as a System
- Butterfly Effect
- Know Your Customers’ “Jobs to Be Done”
- Competing Against Luck: The Story of Innovation and Customer Choice - Book by Clayton M. Christensen
- Dr. Li Wenliang