A high level of senior management engagement is absolutely critical to the long-term success of any company’s new product development (NPD) and innovation success. A recent article on the role of Jeff Bezos during the development of the Fire Phone (1) led to a question: Can and should the senior manager in a business function as what might be termed a “super product manager”? By my definition, a “super product manager” drives the process to define what products or services get developed, but is also responsible for the company’s short and long-term financial success and to whom everyone else ultimately reports to functionally. These are two very different roles, and the question addressed in this article is whether this level of engagement in NPD is actually detrimental to a company’s long-term success.
I and many others have written extensively about the need for management engagement in NPD (2). Those of us who have spent considerable time in management positions within companies can attest to the need for senior management engagement, or experienced the organization dysfunction that results when the senior manager is not engaged. The senior manager in this context is whoever is responsible for the overall financial performance of a particular business unit or the company itself. It may be the owner and original founder in a small or mid-sized company, or CEO, or maybe a divisional manager in a large organization. For this leader, just being involved in the decision making process is not good enough. They must be intimately engaged and view the decisions around new product development and innovation as a key business process, perhaps the most important of all processes. Engagement means they invest considerable time and energy in the process. They view themselves as ultimately responsible for the success or failure of new products, and do not view NPD as “just an R&D” function.
But can a high level of engagement in the NPD process result in the senior manager taking on the role of a “super product manager” as I have defined it? This will likely be very dependent on the leader themselves, including their history with the company, the culture of the organization, and their familiarity with the technology and market. It might even be a function of their arrogance. Maybe they truly believe they do have all the answers. There are certainly many examples of leaders that fit this mold: some successful, many more not successful over the long run in my opinion. The article on what transpired with the development of the Fire Phone at Amazon, its first foray into the smartphone market, illustrates some key points.
Amazon and Jeff Bezos have had a history of investing in a wide range of innovation geared to future revenue streams rather than a singular focus on short term financial results so endemic to large public companies today. That has enthralled many investors as that is certainly not the norm. The investment community has focused on the high revenue growth rates at Amazon, rationalizing that once growth rates moderated, earnings would increase. The reality is that revenue growth has slowed significantly the last five years, but earnings have not been forthcoming. The Fast Company article makes the point that the Fire Phone debacle raises new questions about Amazon and whether they have lost their focus. The phone was introduced in June of 2014 at a price of $199. Almost immediately, it was criticized by reviewers, and ultimately the price dramatically reduced and the company forced to write off $170M. By any definition, the product was a failure, though it is possible that some of the technologies developed will find a home in successful future products.
What is significant for the purposes of my argument is the role that Jeff Bezos played in the development of the Fire Phone. By all accounts, he clearly functioned as a “super product manager”. As the article states, “Because the Fire Phone, as with most big innovations inside Amazon, came straight from Bezos’s brain. As one founding team leader of the project puts it, “This was Jeff’s baby.”’
The project started as all do in Amazon, with a mock press release of the product they hoped to launch. His mandate to the team was that they needed to “wow customers with something big and distinctive”. That statement is not sufficient to drive a development, but the article goes on to say that based on interviews with more than three dozen employees involved with the project that “the CEO drove every aspect of the phones creation from the outset.” The article goes on: “Bezos’s guiding principal for Amazon has always been to start with the needs and desires of the customer and work backward. But when it came to the Fire Phone, that customer apparently became Jeff Bezos.” And, “…With Bezos managing every critical decision, teams began second-guessing themselves trying to anticipate how he would react.” Remember, Bezos is the CEO of Amazon. If you were an engineer working on a project at Amazon, and the CEO was managing every aspect of the feature set, how would you react? Do you think this would positively motivate a team, or have negative effects? Do you think most team members would feel free to disagree with his direction and ideas? According to the article, his heavy-handedness did not promote a culture of openness that could have prevented this failed foray into the smartphone market.
An example from the article makes the point. The team experimented with many different technologies including what was called “dynamic perspective”. This would use the phone’s camera to track the user’s head, adjusting the image on-screen to appear three-dimensional. The team struggled to make it work, and after the first set of leaders failed to succeed, new leaders were brought in. They were told to make it work no matter how much it cost or how long it took. There were serious reservations by many on the team for both technical reasons (battery drain) as well as marketing reasons. Namely, no one really could envision the uses and how the cost could be justified. No matter, it was “what Jeff wanted”.
Of course, Bezos has a reputation, as do many other high-profile creative CEO’s, of making bets that pay off and a knack for anticipating what customers are going to want but cannot articulate, so-called latent needs. Bezos famously insisted on a wireless feature on the first Kindle to allow users to access the Kindle store to buy books. Most within Amazon at that time believed this feature would negatively impact profitability. Clearly, he was right, so many in Amazon felt that when it came to Fire Phone, maybe they should listen and just get on board.
The question is whether over the long-run, this is the best way to make decisions on new products? Maybe for specific companies with a CEO that has that rare, unique set of skill sets, but the reality is most companies are not blessed with that type of CEO. In those cases, the best solution is implementing an effective innovation management system that does not rely on any one person, but leverages the knowledge across the organization, and even outside the organization. The challenge for any company is to institutionalize innovation, without stifling creativity.
So in the end, the Fire Phone was not a successful new product, at least as measured by financial performance. In the long run, maybe some of the technologies will be used in other products, or the phone will continue to go through multiple iterations and Amazon eventually gets it right. For me, I believe this example illustrates some of the pitfalls of a senior manager filling the role of a “super product manager”. These lessons include:
- A senior manager taking on this role might be supplanting or undermining a well-functioning innovation management system that leverages the knowledge of the entire organization and institutionalizes innovation without stifling creativity. Successful long-term innovation should not be dependent on one person within the organization.
- The senior manager who takes on this role should realize the unintended consequences of driving innovation to this degree while serving as the leader of the organization to which everyone reports. The negative consequences of team members not speaking their minds for fear of upsetting the manager is very real. This can lead to a group-think mentality that can potentially reduce the chance of new product success over the long run.
- This illustrates what happens when we “fall in love” with the product or service and forget about the real challenge in developing new products or services. Namely, what customer problems are we solving better than alternative solutions already in the market?
- Many senior managers or CEO’s, whether in a small, medium or large organizations are likely there because of their talent at managing organizations and past successes. Many, however, fall into a trap where they start to believe they have all the answers. They become arrogant and have an attitude that “I’m right and you’re wrong”. They believe they alone know what customers want and if “R&D would just give us what we ask for and on time”, then all would be well. They ignore bad news, and often punish those who bring it to them. They can be so driven that they ignore the advice of others in the organization. Jeff Bezos may have fallen into this trap, and any senior manager must resist the temptation.
Does your company rely on the “wisdom” of a so-called “super product manager”? Has that been a successful long-term model for innovation in the company? What are some of the positive aspects of this model? Any negative aspects?
- Carr, Austin. 2015. The Real Story Behind Jeff Bezos’s Fire Phone Debacle and What It Means for Amazon’s Future. FastCompany February, 2015.
- See this article: New Product Development (NPD) as a Key Business Process, and this whitepaper: Critical Role of Management in Effective Innovation
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