Rich Karlgaard is running a new blog for Forbes Magazine. He's been taking on "Institutional Stupidity". In this installment, he looks at the case of an engine manufacturer that:
As promised, here is the story of a company that fights its own loyal customers, insults their intelligence, and voids their warranties. This, even though its customers have figured out a cheaper and safer way to use the company’s product.
The company makes airplane engines, and the cheaper and safer way to run the engine is a bit lean of the settings specified by the company. This is called "lean of peak (LOP)".
The problem with LOP used to be that it needed more precise handling. Get it too far off and the engine might explode. Nowadays, though, with computer monitoring and adjustments, that's not a problem. The problem is, the company doesn't trust the customer to use hi-tech monitoring, and fears being sued if they allow customers the option of running LOP.
Rich's advice to the company:
What is the lesson here? Listen to your customers, not your lawyers. Or you’ll sink to the level of institutional stupidity faster than you think.
The problem with this advice is, ignoring customers may be cheaper than ignoring lawyers. In this case, if you ignore your customers, you force them to spend more on fuel and replace their engines more often. If you ignore your lawyers, you may have to settle expensive lawsuits when an engine explodes and a plane crashes.
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