Why are products so complex?
Posted by Grant Brewer on 28 Aug 2007
Technology and progress were meant to make us more productive and make life easier. We were meant to be enjoying more leisure time, whilst technology helped us get the job done. We know that this idea was far from the truth, but there is still a nagging doubt that life (and the products and services we consume whilst living) have become more complex to deal with rather than less complex. One of the keys to overcoming the challenge is to stop trying to please everyone -- accept that some potential customers won't buy your product or service, and this takes courage. Good strategy often requires the courage to take such a stand. If you get your product portfolio right and get customers to understand your products you might be on the road to creating value through product leadership. And that might help you lower the cost of sales and lower support costs as you get the right product to the right consumer, just when they want it.
Technology and progress were meant to make us more productive and make life easier. We were meant to be enjoying more leisure time, whilst technology helped us get the job done. We know that this idea was far from the truth, but there is still a nagging doubt that life (and the products and services we consume whilst living) have become more complex to deal with rather than less complex.
Focus on service experience + the product
I don't only mean that products themselves are complex to use, but also that finding the right product or service can require negotiating a confusing world of choices, all wrapped in complexity. That companies find making their products easy to use is well established. It is one of the reasons that products that are seen as well designed and easy to use are so successful. iPods are one of the best examples of this type of product success built on brilliant product engineering that makes the product highly functional, easy to use and good to look at. A lot has been said recently about the emergence of design as a part of corporate strategy and in the industrial design of products (or services). Unfortunately, not enough has been said about the design of a product or service portfolio. Apple, Inc is the most notable leader of high-design product development built on the skills and reputation of their head designer, Jonathan Ives. They are also a leader in bringing simplicity and elegance to a product portfolio — they have gone far enough to link the packaging, the marketing, the product portfolio and the products themselves into an tightly integrated, well designed product strategy.
This is a challenge of equal importance that many organisations are struggling to deal with: the temptation not to complicate their product portfolio. Persuading the consumer to buy in the first place is largely the focus of marketing, but surely it is in both the company's and consumer's interests to make sure that the products are easy to understand.
Increased choice doesn't necessarily add more value
Part of the problem lies with the illusion that increasing the choices available consumer creates value for the consumer by empowering them to match their individual needs with a product. This might be true if there are indeed substantial need differences between consumers, or if consumers value the ability to customise their experience. However, it is not true of all product categories — it is difficult to understand how the almost infinite choice of mobile phone products is adding value to or empowering the consumer. Brand extensions are a viable way to extend the reach and equity of a brand, and indeed to grow revenues. However, simply adding additional brands to an existing product category seems more focused on short term revenue growth. More sustainable revenue growth will come from real product innovation, rather than re-branding existing products with slightly different feature sets. Real innovation is exemplified by organisations that significantly upgrade or replace their products within a repeating time-cycle (the frequency would depend on the industry). Mobile phone handset vendors seems well placed to do this since most contract phone users replace their handsets every second year, giving them a almost guaranteed upgrade path. Instead, most handset manufacturers seems more focused on making more and more variations on their phones so that the choice to a consumer even within a single brand such as Nokia can be intimidating and bewildering.
BMW do a pretty good job of simplifying their product portfolio: most of their target customers understand their product range (which is built around cleverly numbered model numbers: 1, 3, 5, 6 & 7). In many cases, the match of product to type of consumer is easy to understand. That should be a model for other industries.
Aside from the volume of confusing product alternatives and choices, consumers are also challenged by organisations that display their products or services poorly. This is especially true of the use of the web within South Africa — companies here frequently don't make good (or enough) use of their Internet sites. This is particularly strange given the information rich nature of many of the products or services. As an example, consider Telkom's web site(s). Finding detailed product information as a consumer (or worse as a business looking for a PBX, for example) can be a frustrating experience. In Telkom's case, their challenge extends to their physical product descriptions and locations. It is simply confusing to know where to go or who to ask when you need to purchase a product.
The other service providers in the telecommunications industry are not that much better: neither Vodacom nor MTN have web sites that make clearly understanding their products easy. And all the mobile phone operators could do with refinement of their product portfolios: it can be difficult to understand which contract you should get, what is included, what is different to other contract options, etc. Financial service companies don't fare much better. Standard Bank's home page contains enough links to keep you browsing for hours of not days. Overall, banks and investment companies make it pretty difficult to understanding their products: what do you get, what does it cost, what are the terms? One wonders whether the brokers selling some of these products really understand them or know the differences between them?
Stop trying to please everyone — create clear customer categories for product
One of the keys to overcoming the challenge is to stop trying to please everyone — accept that some potential customers won't buy your product or service, and this takes courage. Good strategy often requires the courage to take such a stand. If you get your product portfolio right and get customers to understand your products you might be on the road to creating value through product leadership. And that might help you lower the cost of sales and lower support costs as you get the right product to the right consumer, just when they want it.
Why are products so complex? was published in Intelligence Magazine as Strategym #52 in September 2007.
Categories
Essays | Strategy | Intelligence Strategym
Tags
design (3) | product strategy (2) | mtn (2) | apple (2) | telkom (1) | simplicity (1) | compexity (1) | bmw (1)
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Comments
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22 October
2007Hi Grant.
I enjoyed this article in Intelligence. Your comment is spot on [I believe not just iro products, but business processes and systems in general] and it seems there is a metaphorical pot of gold waiting for those who really can keep it simple [to the benefit of customers, while not sacrificing production, reliability and performance]. Funny how keeping it simple seems to be such a difficult thing for many to do…
btw - I like your blog’s ‘new’ look.
— Posted by Darren
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23 October
2007Darren,
I agree—simplicity can be applied also to business processes and systems in general. What surprises me is how little may businesses or organisations do in order to make their activities simple, and it is even more surprising how many organisation lay claim to simplicity without actually understanding it or implementing something that is actually simple. Perhaps in South Africa there is too little competition in many industries which diminishes the “pot of gold” waiting for those that get it right.
— Posted by Grant
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23 October
2007Oh, and thanks for the comment on the look. The design is in a constant state of flux at the moment until I get the time to do an proper design. Time is always the problem.
— Posted by Grant
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23 October
2007Yes, time somehow seems to slip away unnoticed… I was surprised you went with Movable Type when almost everyone seems to live on Wordpress.
But on the main topic - the paradox to me is that understanding something usually leads to more complexity, yet more complexity leads to less understanding [basic example: if you’re making a spreadsheet - the more you “understand” the more you add, but the more you add the more difficult it gets to keep track of]. The real pot of gold is for a consulting company that can help others simplify. Although “Simple consultants” doesn’t really roll off the tongue as a company name…
— Posted by Darren
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24 October
2007I moved to Movable Type from Textpattern. I use Wordpress for other blogs, and expression engine was in the decision mix as well. Perhaps my reasons are worth a quick blog post.
_update:_ I’ve sketched my thinking over [here](http://http://grantbrewer.com/2007/10/why-movable-type-4.html).
— Posted by Grant
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