In the last post we talked about some of the positive and negative impacts that variation can have on your products. In this article we will be looking at the opposite of variation, which is uniformity. Some of the ways product managers can create uniformity is by standardizing on systems, product features, and pricing schemes. There are people who dedicate their lives to mastering the subject of standardization (think six sigma and lean manufacturing). What I hope to express is that just like variation, standardization can be a double edge sword.
Examples of standardizations benefits
Reduction in sell price. The example I think of is the king of this game, IKEA. These guys have standard products down to a science. At the beginning of each year IKEA publishes a catalog that advertises their products prices. Because they execute so well they are able to promise no price increases that year, only decreases. That is truly amazing.
Create new sales channels. When you have standard products or pricing, you have the ability to bring on new sales channels faster. This is something my team and I are experiencing right now. As we have worked variation out of our product we have been able to develop things like training programs for new sales channels. We are also able to give the people at the end of those channels better marketing material and pricing schedules for our standard products.
Increase in product quality. Because the development process becomes consistent, the product becomes consistent, which leads to the customer having more confidence in the product.
Consequences of standardization
Less hands on experience. This was a consequence that my team and I did not see coming. In the early stages of developing our product, every team member was expected to be able to accomplish any given task on any given day. As we struggled through the learning curve we developed a micro level understanding of our product. As we programmed those lessons into our work process standards, new team members missed out on the opportunity to go through the same learning curve. To overcome this, we have had to develop a lot of training programs. We have seen success with these programs, but the jury is still out on whether they are as successful as hands on experience. One thing is for sure though, we could not have scaled up as fast as we are right now with the way we used to run our operation.
Lack of creativity. One of the things you often lose when you start to standardize everything is the entrepreneurial and innovative spirit that made you so successful in the beginning. It is ironic to see once thriving organizations known for their innovation, began to crumble because they put so much focus on standards and uniformity. Companies like Motorola, Blackberry, and Nokia were at the forefront of technology and innovation. Many experts have weighed in on why these giants failed, but I would argue that they lost their focus on innovation.
What I hope you have taken away from these posts is that there are no absolutes when discussing these issues. Instead of seeing variation as an opposing force to standardization, product managers should see these issues as tools to be used. Much like golf clubs, product managers should consider the shot they are trying to make and use the appropriate club.
What do you think? How should product managers approach variation and standardization? Please let me know your thoughts in the comments below.