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

The most important factor in decision making is the motivation of the decision maker. If various members of the product development team are, in effect, pursuing goals at variance with that of the shareholders (profitability), then it can be expected that they may make decisions about the actions that should be taken in response to a particular set of circumstances that are less likely to result in project success as measured by overall profitability.

Following are a few examples of the motivations that I have observed:

Blame Avoidance. There is an old joke about the two guys who are being chased by a charging bear. The first guy cries “We can’t outrun this bear!” and the second guy says “No, but I can outrun you!” A similar situation can happen among members of a product development team. Teams are usually struggling, often under great pressure, to hit project milestones on time. One member of the team may be secretly relieved if another team member is tripped up by a problem because it may buy more time for themselves and thereby allow them to avoid blame for a delay for which they might otherwise be responsible.

Such “shadenfreude” can also occur between different functional groups, say between engineering and marketing, or within a functional group say between the mechanical and electronic design functions, for example. The problem with this natural emotion is that, if not checked, it can potentially result in perverse incentives against cooperation between people that need to be working together and communicating closely with one another for the project to be successful.

There are various other forms of blame avoidance: CYA, plausible deniability and risk adversity among them. These sorts of motivations / behaviors may be more prevalent in organizations that reward “success” and punish “failure” in an unconstructive manner. Product development inherently involves a high level of uncertainty and therefore requires a degree of intelligent risk taking. The incentives should not be to avoid risks and mistakes at all cost but rather to take risks and make decisions in a rational, methodical manner, i.e. follow a sound product development process.

Ego. Most people who have worked in industry for a while have certainly experienced this phenomenon. It may take many forms such as self-aggrandizement: seeking to appear as a hero or an expert or the smartest person in the room. As a young engineer I would sometimes find myself secretly hoping that my idea for how to address a particular design challenge would be accepted by the lead engineer and by management. I wanted to show others what I was capable of and I wanted to see something that I invented in production or to see my name on a patent. Although these emotions are natural and understandable, they can also become a distraction if not kept in balance. As I have grayed and gained confidence I have, mercifully, lost the longing for my ideas to the be “the winner” and have become more focused on the process of making optimal decisions between alternatives, regardless of the genesis of the underlying idea.

Ego may also motivate a quest for greater status, authority or financial reward. These are not necessarily negative motives unless they run contrary to the primary objective of the business: profitability. For example, decisions about adding or reducing staff, reorganizing, or adding or eliminating a particular in-house capability obviously need to be made with long term profitability as the primary motivation rather than personal empire building.

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