In today’s world, having a great product at a good price is not enough. The consumer world has evolved to expect more from a product than the item itself. Consumers expect a level of responsibility and engagement from the firm itself. Customers expect to feel good about the product they just bought by knowing where it came from, knowing that it will not cause harm during use and knowing that disposal at the end of its life will have more options than just the landfill. This demands a number of competing commitments to product designers when developing new goods.
Product designers must first and foremost understand their target market and a list of customer requirements and expectations for a particular product concept. In a nutshell, if product developers ‘miss the mark’ of what the customers want, or miss the cost target that the market will bear the product will fail. This responsibility to the customers is the classical area of focus and where most companies invested their resources in years past. This is also prevalent in the international theater with emerging markets, where low economic overhead requires product developers to invest their resources into the area that provides the greatest bang for the buck. In this case, a whiz-bang gadget at a dirt cheap cost.
In the context of this discussion, corporate responsibility is referring to a product development team’s duty to release product that is profitable to the organization. This is different than corporate social responsibility, that is a topic for another day.
A product development team must balance customer expectation and target product cost with a level of margin required by the company to remain sustainable. A common desire from product developers is to create products that far exceed customer expectations; think a gold-plated toaster. While a gold plated toaster may be super cool, it’s probably not any more functional than a chrome toaster. The balance here is to exceed customer expectations, while driving the lowest COGS, or Cost of Goods Sold for the producer. This is the responsibility to the corporation, the throttling back on the product features to maintain margin.
Social Responsibility is a big topic in today’s consumer and business world. Social Responsibility is what helps customers ‘feel good’ about their purchases. This can come from the product being manufactured from recycled material, sourced from responsible supply chains, etc. I consider this to be part of the contemporary move towards Corporate Social Responsibility, which is really a macro-level initiative that successful organizations drive from the top down. Chiquita is a good example of this with their organizational turnaround in the late 90’s, then they changed their operating strategy to be employee and socially focused with the assumption that business would follow. It did.
Digging down to the micro level, how does Social Responsibility effect product design and development? Turns out, product development teams can have a large impact on social responsibility with low effort investment. Product design is a very early step in the overall release process to get products into consumer hands. This means small steps in component or material specification upstream can drive responsible product sourcing downstream in operations. The sourcing and supply chain activities can have a large impact regions and societies, and can potentially drive out unfortunate activities such as child labor, pollution or human rights violations. Simply put, Product Developers are at the handle of the Operational bullwhip, small changes can make a big impact.
Examples? Conflict Minerals is a recent and ongoing issue of mining activities in the Congo area that is responsible for child labor, human rights violations, pollution, the whole gamut of social sins. Materials from this region include gold, tin, tungsten and tantalum, which unfortunately are basic industrial staples for modern electronics, including your iPhone and iPad you might be using right now. Local laws in this region are ineffective or too corrupt to stop the activity, and consumers keep the demand strong for the products. This is where Product Development can step in. Engineers designing the releasing product can take additional steps during the design cycle to specify components and materials that are certified ‘conflict free’ upstream and stop an issue before it starts.
There are a number of other environmental and social issues and restrictions that can be addressed relatively easy upstream in the design cycle, including RoHS, REACH, WEEE and Recycling Initiatives. Addressing these items downstream, or not addressing them at all can be difficult or costly.
From a corporate perspective, these activities should be encouraged, supported and institutionalized to build them into the culture of the company. Subtle marketing campaigns can be built around these activities as well, to educate the buying public on how your product can make a difference, and make the customers feel good about buying it!
Do you intentionally purchase products from responsible companies? Drop me a line and leave a comment.