the cost of product delays

Well, it’s happened again.  A product that has been “announced” has actually been delayed.  Now, mind you, it’s not as bad as vaporware in the ’90’s but it is maddening that companies cannot meet the expectations set with the consumer base.  I totally get the reasons for delay: put your best foot forward with a product that you can be proud of that contains features that your customers want and it actually works.  But, I have to ask myself, when the delay is longer than 30 days from announcement, does the development team (or the company) ever wonder:

what are the costs of product delays?

Now don’t get me wrong.  I know developers are extremely passionate people who when involved with something often find it dominates their lives.  They think about it all the time, it dominates their subconscious, they avoid doing things that interfere with their passion, many may consider them obsessed.  Of course, this leads to long hours and late nights and in the lead up to product release they inevitably end up sleeping underneath their desks and kissing their families and friends good-bye for a period of time.  And, after all that, it becomes apparent that they will not be able to meet the “drop dead” date.

But an extended product delay is more than just demoralizing for the team (and the company) it will also delay sales volumes, market messaging and market share which effects revenues and profits.  If a delay results in the loss of early high pricing opportunities or long-term loss of market share (which in some cases can happen within a few months of delay) the effects can be extremely pronounced.  And  there is also the damage that is done to your brand - both corporate and individual.  Your sales and marketing team have been out actively promoting the new product, whipping the customer base up into a frenzy as to how all the great features will solve their problems.  From a company standpoint, extended delays imply that you can’t forecast accurately (not a good thing) and therefore do not have good internal processes.  If your customers can’t wait any longer they will be seeking other options.  But what does the individual sales rep say after the repeated: “no, tomorrow.  actually, Friday.  uhm, maybe end of next week?”

At large companies, a profit and loss statement is prepared for each new product that makes estimations as to market penetration, the resulting revenues and the costs to deliver.  When a product delays they update their models and can articulate the financial impact to management.  However, at small companies the resources do not exist to perform the same exercise but the “cost” is palpable - everyone has a voice and opinion on the who, what, why of the delay.

So although we aren’t providing you the loaded gun to determine the actual cost of a product delay I can tell you:

to minimize the overall cost you must have strong leadership.

Someone needs to re-engage the developers, pull them together as a team, make sure that the “drop dead” date is achievable and show them the milestones to get there.  External messaging must be factual and address the reasons why a product has been delayed and when it will be delivered.  Internal messaging is the same but adds the steps to get you there so that the entire company is well informed.  Finger pointing should be stopped immediately and constructive comments and solutions should be promoted.

You’re small.  You’re a family.  Pull together and deliver and then party and then start all over again …