June 16, 2011
Keeping It All In Sync?
I just read a great quote in a non-business book, Richard Dawkins’ River out of Eden, Dawkins himself quoting Darwinian psychologist Nicholas Humphrey’s revolting of a likely apocryphal story about Henry Ford. The full “double” quote is:
It is said that Ford, the patron saint of manufacturing efficiency, once
commissioned a survey of the car scrapyards in America to find out if there were parts of the Model T Fird which never failed. His inspectors came back with reports of almost every kind of breakdown: axles, brakes, pistons — all were liable to go wrong. But they drew attention to one notable exception, the kingpins of the scrapped cars invariably had years of life left in them. With ruthless logic, Ford concluded that the kingpins on the Model T were too good for their job and ordered that in the future they should be made to an inferior specification.
You may, like me, be a little vague about what kingpins are, but it doesn’t matter. They are something that a motor far needs, and Ford’s alleged ruthlessness was, indeed, entirely logical. The alternative would have been to improve all the other bits of the car to bring them up to the standard of the kingpins. But then it wouldn’t have been a Model T he was manufacturing but a Rolls Royce, and that wasn’t the object of the exercise. A Rolls Royce is a respectable car to manufacture and so is a Model T, but for a different price. The trick is to make sure that either the whole car is built to Rolls Royce specifications or the whole car is built to Model T specifications.
Kind of makes sense, right? This is interesting to think about in the context of running a SaaS business or any internet or service business. I’d argue that Ford’s system does not apply or applies less. It’s very easy to have different pieces of a business like ours be at completely different levels of depth or quality. This makes intuitive sense for a service business, but even within a software application (SaaS or installed), some features may work a lot better than others. And I’m not sure it matters.
What matters is having the most important pieces — the ones that drive the lion’s share of customer value — at a level of quality that supports your value proposition and price point. For example, in a B2B internet/service business, you can have a weak user interface to your application but have excellent 24×7 alerting and on-call support — maybe that imbalance works well for your customers. Or let’s say you’re running a consumer webmail business. You have good foldering and filtering, but your contacts and calendaring are weak.
I’m not sure either example indicates that the more premium of the business elements should be downgraded. Maybe those are the ones that drive usage. In the manufacturing analogy, think about it this way and turn the quote on its head. Does the Rolls Royce need to have every single part fail at the same time, but a longer horizon than the Model T? Of course not. The Rolls Royce just needs to be a “better enough” car than the Model T to be differentiated in terms of brand perception and ultimately pricing in the market.
The real conclusion here is that all the pieces of your business need to be in sync — but not with each other as much as with customers’ needs and levels of pain.