For several years there have been multiple conversations worldwide about climate change, waste reduction, recycling, and other sustainability-related topics. There are many perspectives on these topics, but the one takeaway I have; there is an impact on products and product design.
For example, we take that with product design; the focus has been on mapping products that can be created for the least cost. So if the product breaks, you can throw it away and design a new one. The term “built-in obsolescence” has become popular, where organizations appear to design products that will only last for what seems to be a very short time before it needs replacing. In the short term, this may be good for the organization, the product is produced for the lowest cost possible, thus maximizing profits, and then it fails encouraging customers to buy a new product, thus supporting continuous sales and revenue.
Is this the best business model? Are customers happy when they have to buy a new product after a few years? What is the cost to dispose of the product? Who pays to dispose of the product? And then, there are larger questions about the impact on the environment and society at large.
I believe that organizations ignore these questions and the associated costs, to their detriment. There are many examples, but one that comes to mind is the car industry. In the 1960s, the North American car manufacturers followed this business model. In particular, after only a few years, rust started appearing on cars, and after a few more years, the rust started to be a safety hazard. Also, it seemed the cars were not built well, and engines broke down. At the same time, the manufacturers were developing new car models with new features. The result was that people were buying a new car every 3 to 5 years. Were car owners happy about this? No! First, they had to pay to repair their cars to fix the rust and other defects. Then, their cars depreciated quickly, making them worthless, and eventually, they had to pay to get rid of the cars.
So, what happened? In the 1970s, the Japanese car manufacturers started exporting their cars to North America. The Japanese cars did not rust as quickly; they had durable engines that lasted longer. The Japanese cars were designed for the longer term. North Americans started to buy Japanese cars, even though they cost more. By the end of the 1970s, the North American car manufacturers were in financial trouble and had to start designing more sustainable cars.
As product owners, you should think about how to make your products sustainable. To do this, you should ask these questions:
Does the quality of my product exceed my customer’s expectations?
How easy is it to repair defects in my product?
Can my product be upgraded or its life cycle extended without high costs?
How is my product disposed of?
Does my product put my customers at risk of getting hurt or sick?
In Chapter 7 of our book Gen P New Generation of Product Owners Who Care about Customers, we define customer value as the intersection of quality, delivery and sustainability. Quality is determined by the customer, and your job is to exceed your customers’ expectations. Delivery is about great customer experience in doing so. Sustainability is continuously delivering additional value to your customer. Addressing the questions above and focusing on quality, delivery, and sustainability will allow you to build a more sustainable product that delivers more value to your customers. Be open with your customers; they will be willing to pay for better quality!
For more, watch our September 25, 2020 webinar, Sustainable Products Sustainable Business with Dr Philip Walsh.
Peter
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