Every decision has consequences. Some can be spectacular.
My first job after college was at McDonnell Douglas, a (former) giant airplane company in St. Louis. It was at the very tail end of the Cold War and we were building the F-15, F-18, and Harrier fighter jets.
I was a young producibility engineer assigned to work on carbon fiber composites.
Traditionally, carbon fiber parts were assembled by hand layup. A (unionized) worker would take each layer of carbon fiber and place it on a mold in a certain orientation. They had a clear plastic sheet with orientation lines that would show them where each piece would go.
A typical carbon fiber part may have a dozen or sometimes 50 or more individual pieces of pre-cut carbon fiber sheets that would be formed by hand, one after the other, to make a part. Once laid up, the mold would be covered by a vacuum bag, then cooked in an autoclave.
As you could imagine, this was a very labor intensive, time consuming and tedious process.
Carbon fiber parts were laid up in a clean room. Everyone wore a smock, and the building had careful temperature control because the resin in the carbon fibers would go bad if exposed to high temperature before assembly.
Someone had the brilliant idea to automate this process.
The (non-union) engineers designed a giant gantry machine. It cost several million dollars and was 15 feet high, 20 feet wide, and probably 30 feet long. It had this big robot arm that was supposed to carry a big placement head and lay down carbon fiber composites.
This was the late 1980’s, long before a lot of robotic automation technology was readily available off-the-shelf. Consequently, the engineers were basically designing the machine from scratch.
The second brilliant idea was to put this giant machine in the exact center of the clean room. It was only afterwards that they knew how brilliant this decision was.
The machine was a technical disaster. But a spectacular success.
There were endless meetings, presentations, and buy in from management before they started spending money on the project. Once the machine was built by a vendor, it took several weeks to install the machine. Then engineers started tinkering with it.
The process went on for months.
They would get the machine to work a little bit, then it would crash or break something. Then they would spend a couple weeks fixing it again and trying all over.
The (unionized) workers would constantly snicker amongst themselves with every failure. The machine would start moving, then suddenly stop and the red lights would go off. Engineers would scurry around, scratching their heads.
While all the snickering and finger-pointing was happening, slowly, almost imperceptibly, production increased in the Composites Shop.
The (unionized) workers began to work just a little bit faster, then faster, and faster still.
In fact, production in the Composites Shop tripled during this period.
All the workers knew, at least subconsciously, that their jobs were at stake.
In the end, the giant machine never made a single carbon fiber part. The engineering team was humiliated and, you can be sure, got dinged on their performance reviews. There was some manager who championed the project and probably got a promotion when the project was approved. That manager’s string of promotions ended right then and there (unless they had deftly slid to a different project, so it was someone else’s fault when it failed).
The director of the Composites Shop was loving every minute of it. The unionized workforce was working harder and harder. I would not be surprised if he argued to keep the machine in the shop even longer.
All entrepreneurs fall prey to the fantasy.
Every entrepreneur falls prey to the fantasy that the world is static: that their new product will address a real issue with their customer.
But the world is not static. It reacts and compensates to a new change in the market.
In the example above, the new machine was based on the productivity rate of the (unionized) workers over several years. It was impossible to see that the economic argument for the automated machine would fundamentally change once the production rate went up.
All of the engineers and managers on that project assumed that the (unionized) workers were working at full capacity. Little did they know that there was a whole lot of latent capacity in those workers, once they were motivated.
It is impossible to prophesy how your product will change people’s perceptions and their actions, once they know about the product. Often times, there are unintended consequences that are completely unforeseen.