“Good Enough” and Business

Posted: June 17, 2011 in Broadcom, Engineering, Management, Qualcomm, Trends
Tags: , ,

I just finish talking to a friend and mentioned my last post. As we discussed it I realized it was about the individual engineer. Missing was how the concept of “good enough” affects business. That was a very big omission on my part. It’s time to fix that mistake.

When it comes to business, the idea of being “good enough” has a huge impact on decision making and the future of companies. This is best illustrated by discussing an area I am intimately familiar with – the semiconductor business. Imagine you are running the fictitious company GPScom. GPScom makes the world’s best GPS chips. They are WAAS and LAAS capable, very sensitive, and simply the best GPS chips by far. They own the personal navigation device, PND, market along with being in most other GPS based devices. However, companies like Broadcom and Qualcomm start producing mobile phone chipsets with relatively poor GPS receivers in them. These chipsets have only basic GPS circuitry that lacks not only LAAS but WAAS. They aren’t very sensitive and the GPS might say you are in the parking lot when you are really in a cafe having a bowl of soup. The problem is, these receivers are mostly good enough. With proper software the mobile phone becomes a decent navigation device. Furthermore, after a couple of generations, these phone chipsets have GPS receivers that are more than good enough. Since they are integrated into the mobile phone chipset they burn less power, take less precious board real estate and cost less. This means they do a better job of meeting the needs of the consumer. The PND market begins to fade as mobile phones take it over. This is happening today. GPScom engineers can tell themselves all day long how their circuitry is superior. The problem is that sales, and hence revenue, are going to Broadcom and Qualcomm. GPScom will have to either diversify, get acquired, or watch itself become less and less relevant until it fades into the sunset.

As an area of technology moves forward there gets to be a tipping point when what can be put into a CMOS chip is good enough. At that point the technology gets integrated and becomes part of a bigger solution. Companies that fail to recognize this risk becoming irrelevant. This is why the idea of “good enough” isn’t just about the individual engineer. It affects core business strategy. Every company needs to be worried that their area of core competency will evolve to the point where “good enough” marginalizes their value. These companies must either diversify so that they make the chips with the broader functionality, acquire technology that can be integrated in, or get acquired themselves. Is your company aware of just what “good enough” is when it comes to their specialty areas or does hubris cloud their thinking?

Advertisements
Comments
  1. Cathe Conner says:

    As I mentioned in the previous blog, “Cheaper, Better, Faster”. That is the world today. Companies want to met the demand of customers but they must listen to the customer and what their wants and needs are, which they are not doing. I as an individual don’t mind paying the little extra as long as I know that I am getting what I need and require. Companies should be prepared to do away with the “Cheaper, Better, Faster” or as you state “Good Enough” and be ready to invest into “Excellence”. You GPScom company will supercede Broadcom and Qualcomm because they are meeting the customers needs. Nnever tell the customer that this is the way it is, cause it isn’t. There is someone out there willing to listen and take the chance. We need to go back to the old way of doing things and stop this “Good Enough” stuff. Just my opinion.

    • paulplatt says:

      I think you misunderstand the post. Perhaps another example will help. Grab a smartphone (iPhone or Android) and use a navigation app. Would you pay an extra $100 and put up with decreased battery life in order to improve the accuracy from perhaps 200′ to 16′? Most of the time the accuracy is much better than 200′ anyway. I doubt you would pay the extra dollars. I’ll give another example aimed differently. People complain about airline seats. They long for the good old days. However, the price of a first class ticket today is similar to a coach case ticket (adjusted for inflation) from the good old days. Yet these people who complain don’t buy first class tickets. It’s the old cliche that actions speak louder than words. Companies do miss the target at times. They cut cost too much and generate a poor quality product. The task is to meet customer expectations at the best ice point possible. That is why engineering is so hard and why you sometimes ask why they couldn’t have done a slightly better job even if it cost a little more.

  2. Cathe Conner says:

    You stated it very well, “They cut cost too much and generate a poor quality product.” If they didn’t cut the cost so much the product would be better and the customer a lot happier. I don’t think engineering is that hard, it is the requirements put forth that make some of the decisions of the product more difficult.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s