Motivation & Decision Making for Entrepreneurial Product Development- Part 1 of 3

Product development can be thought of as a series of thousands or perhaps millions of decisions that must be made at all levels of an organization. These decisions pertain to business, marketing, engineering, manufacturing and other aspects of the business. There are decisions about everything from where to locate the product’s “on” button to whether to select a recirculation valve that is made in China to whether to advertise the product on late night TV. If all of the decisions (or enough of them) are made correctly the product will be a financial success. An organization that is intent on developing excellent, profitable products must be able to make good decisions consistently and efficiently.

There are many factors that affect the ability of a product development organization to make good decisions. The issue described in this post is one that I have observed to be one of the most critical for good organizational decision making. However, I have also found it to be one of the most challenging and frustrating to grapple with. This topic is one of the things that I wish I had been warned about when I was a baby engineer but had to learn on my own. It has to do with how the goals of many people within a product development organization are not aligned with the primary goal of that organization.

What is the primary goal? The primary purpose of any “for profit” business is to increase the wealth of the shareholders. Obviously, this should be done in a way that is ethical: we must treat others as we would like to be treated and be good stewards of our environment, etc. Nevertheless, the reason that any business exists is so that the people who invested capital in that business will see a financial return on their investment.

The reason a business hires employees (or engineering firms) is because the leaders of that business believe that the work performed by those workers will help increase the wealth of the shareholders. The shareholders are taking the risk of paying us for our labor with the expectation that we will strive to help them realize a return on that investment and we have an ethical obligation to uphold our end of the bargain by striving to ensure that our efforts and decisions are consistent with that goal. One might expect that this statement is so obvious as to be hardly worth mentioning; however, in my experience I have found that not to be the case. In fact, I have long ago concluded that, whether they know it or not, many employees and business managers are actually pursuing a different goal altogether!

I am going to provide a few examples of ways that some workers pursue goals that may not be aligned with the goal of profitability. My purpose in doing so is not to pass judgment but rather to point out that humans are complex creatures who make decisions in diverse ways for diverse reasons. Given that product development is inherently a process of making decisions within a group of people, one should have an awareness of how people make decisions.

Motivation & Decision Making for Entrepreneurial Product Development- Part 2 of 3