A Bloomberg articles details the Takata airbag recall series of events. The line that caught my attention is:
…company documents suggesting that Takata executives discounted concerns from their own employees and hid the potential danger…
“Sixty Million Car Bombs: Inside Takata’s Airbag Crisis”, Susan Berfield, et.al. Bloomberg Business Week, posted June 2nd, 2016, https://www.bloomberg.com/news/features/2016-06-02/sixty-million-car-bombs-inside-takata-s-air-bag-crisis
There are other examples where management doesn’t seem to listen when engineers raise concerns. Have we cried wolf too often? Has management gotten used to taken risks as a good business practice?
At times reliability risks are real and need to be clearly communicated. Let’s talk about how you can effectively get the message across.
Are You Using the Right Language?
You do not need an MBA to speak to senior managers. It would help though.
The language of business is money. Not probability of failure or engineering risk. It is the impact on earnings per share, or simply money.
Detailing the results of reliability testing by discussing the noted failures, images of failure sites, along with estimates of failure rates does little to convey the magnitude of the issue.
An engineering presentation often talks about the engineering and calculations.
We need to convert our work into dollars. How much will the expected failure rate cost us in warranty or lost sales?
If there is a 10% chance of a $100 million recall, the net present cost is only $10 million, which for some organizations is still a lot of money.
What is Important to Your Management Team?
I’ve found senior managers talk in terms of money.
Not every manager you work with will. Some focus on time to market, other on functionality, and you likely will find managers focused on cost. The priority changes for different industries, products, and situations.
You need to know what is important to the team of managers you work with regularly.
Knowing the financial impact is a great place to start and still useful at any management level, yet you also need to speak a few other languages.
For example, if your product has a critical time to market emphasis, the management team may be acutely aware of the cost per day of delay.
For the inkjet printer project, I once worked on we knew it cost us $1 million per day of delay in lost sales.
Therefore, when discussing the value of HALT you should emphasize the ability to find issues earlier thus reducing the risk of delaying production. Avoiding a one day delay makes the investment in HALT rather worthwhile.
If cost is the primary focus, emphasize the total cost including warranty.
Often the focus is on the bill of material cost and ignores the cost of failures, yet a profit margin will quickly evaporate if the failure rate increases even slightly.
Is the Main Point First and Clear?
You perform ingenious failure analysis to ferret out the primary cause of failures.
The report details the symptoms, customer complaints, the step by step analysis done in the lab, and eventually if at all, gets to the recommendations. While we’re impressed by the SEM images and derivations of thermal transfer equations it’s not the point you are trying to make.
Think executive summary. One page.
Main point, recommendation, total cost and return on investment on one page or less.
Lead off your presentation with the bottom line. Make the key points clear and connected directly to what your management team cares about. Money, time to market, cost, etc.
You are not telling the story. This is not an interesting detective story or thriller where the forensic team cracks the case. Well, it often is, yet your team most likely isn’t all the interested in the drama involved with finding the answers.
Lead with the recommendation, key findings along with their impact (money). Let the rest of the discussion follow the questions you receive.
You may be able to tell the story, yet do not let the story obscure your primary recommendation or finding.
Help Your Teams Listen and Understand
In summary, do your homework and determine what is important to your audience.
Focus your presentation or report first on what is important to your management team. In most cases, this means lead with the impact on the bottom line.
You still need to do solid engineering. You still need to check your assumptions. You still need the supporting research. Yet, that is all backup to the primary point that your presentation or report has to convey.
Do not make your team work to get the message. Spell it out clearly and quickly.
What have you found effective when talking to your management team? How do you prepare and communicate bad news (or good)?
Leave a comment and share with your peers.