Speaking of Leadership®, Vol. 2, No. 9
Phil Holberton

One of the most difficult decisions to make is determining when your product is ready for release to the marketplace. We all know of companies that release a product before it has been thoroughly tested, whether in the lab or with alpha or beta customers. As customers, we grouse about it, but at some level, we have come to accept this behavior as “being ahead of the curve.” After all, we may just be one of those early adopters, willing to accept imperfection to be out in front.

Many years ago, I heard a speech given by noted and gifted entrepreneur Ray Stata, who articulated a very important lesson that he learned as CEO of Analog Devices, Inc., a company that he founded in 1965 and that today is a $2 billion manufacturer of integrated circuits. As he described, there was always the tug and pull between the product engineering body and the sales and marketing arm. The engineers wanted to find incremental improvements to the product features, benefits, and performance before releasing it to the marketplace, but as a young company, the newly assembled sales force was very eager to move the product. After all, with no product to sell, the sales organization was costing the company a lot of precious capital. It was a constant struggle. Years later, Stata's advice to young entrepreneurs was to decide upon a date to release the product and release it with the provision that they will be offering an updated version shortly thereafter. Let's face it: there is no substitute for actual customer feedback. We can continue to work in our offices and strive for perfection, but that doesn't really solve anything. The real value is to get the product out into the marketplace and see if it works.

As leaders of our respective organizations, we are faced with these types of decisions all the time. This is the gray area of leadership. There is no textbook or recipe for making the correct choice. All the lines are blurred by each unique situation. However, we must rely on common sense, balancing the undoubtedly useful information from product performance with the long-term branding and financial implications of our decision.

It's here that project management comes in—keeping to target release dates, having confidence in your testing protocols, and then deciding whether you release a product before it may be fully tested and functional. The correct decision will only be known after the product is released to the market where consumers will either embrace your product (even with its shortcomings) or flatly reject it.

Of course, your market power and branding will also help dictate customer tolerance levels. Take Microsoft as an example. They can afford to release products with known issues (bugs), because of the company's market dominance. Because of compatibility issues and a dearth of competition, Microsoft essentially precludes customers from rejecting products—bugs and all.

But, what happens when problems go beyond bugs? When they reach a level of product failure in the marketplace? Do you recall the product? Do you let your customer base absorb the problem? Contrast, for example, the Ford Explorer/Firestone tire issue with that of Tylenol for Johnson and Johnson. In the Ford situation, Jacques Nasser took a hard line, blaming the situation on everyone else, and particularly Firestone. He held an open and public discussion as to whose fault it was and who should pay for the damage. In the final analysis, it cost him his job. On the other hand, James Burke, CEO of Johnson and Johnson, moved unilaterally and quickly to remove all the Tylenol from the shelves. He saved the company by not pointing the finger.

Leadership is not a science. It is very much an art. Making decisions that are in the best interests of all the stakeholders is what it is all about. It's also about doing what's ethically right!

Now ask yourself... Am I a Leader?