When Good Products Go Bad

Managing product liability and stakeholders when things go wrong. The good, the bad and

the ugly news for Product Managers.

BCTIA - Product Management Group – May 8, 2012 - Facilitator

Derek Pettingale – Product Marketing Manager, Schneider Electric – SolarLindsay Hardie – Global Product Manager, Schneider Electric - Solar

The goal of the Product Management Group is to promote and enhance the profession of Product Management in BC’s technology industry. The BCTIA with Members of the Product Management Group work collaboratively to:

• Promote Product Management as a recognized discipline • Encourage the sharing of best practices in a non-competitive environment • Provide networking and peer building opportunities for product managers

Product Management Group events are open to product managers, product marketing managers or those responsible for product management in their organization. Attendees must work for a BC based technology company in any technology sector, whose core business is the development and/or distribution of technology-based products or services.

Legal Product Liability

Your Legal Product Liability

≠Your Guarantee or Warrantee!

Legal Product Liability

• USA - The risk-utility test is used to determine whether a product's design or warning is defective, thereby making the manufacturer liable for injuries caused by its product.

• Do not assume the same for all parts of the world. Review other parts of the world, especially the European Union.

Risk Utility Test

• The manufacturer is held liable under the risk-utility test if the probability of injury times the gravity of injury under the current product design is more than the cost of an alternative reasonable design plus the diminished utility resulting from modifying the design.

• Simply, the court considers if the economic costs (determined from likely lawsuits) are higher than the cost of changing the product design (ex: add plastic guard) plus the loss of use of the product (ex: guard makes it harder to use the product).

• Generally, the simplest risk-utility test is the Hand Formula.

Hand Rule

• A term coined by Judge Learned Hand and describes a process for determining whether a legal duty of care has been breached.

• An act is in breach of the duty of care if: B < P*L• Where B is the cost (burden) of taking precautions,

and P is the probability of loss (L). L is the gravity of loss. The product of P x L must be a greater amount than B to create a duty of due care for the defendant.

Managing Product Liability- Top Mistakes -

Legal

Not involving legal resources in advance in product development and support• Review of marketing materials• Review of instruction manuals, product labels• Monitoring legal or regulatory frameworks in your industry• Review of warranty statements, exclusions, other “fine-print”• Document retention

Confusing “risk management” with “buying insurance”

Contact Center Processes / Training

• No training / lack of established processes – When and how to escalate an issue– How to record information on a call ticket– Terms and conditions of warranty

• Relying on the contact center as main source to detect problems

• No empowerment to quickly resolve small commercial issues

Product Traceability

• No method to track products and identify affected populations when a problem arises• Serial numbers• Production batches (finished goods, sub-assemblies, components)• Firmware/software releases and relationship to hardware

• No method to determine who the products were actually sold to via distribution channel partners

Communications• No decision making process to initiate a recall, upgrade, or customer

service campaign

• Lack of training for communications staff• External media relations• Internal communications to all departments• External communications to distributors and their role in an action

Product Design and Program Management

• No cross-functional review of product design• Placing program budget/financial considerations

ahead of quality• Putting schedule considerations over quality• Elevating “political” considerations over quality

(internal politics and external marketing)

Product Managers,where does it all

start?

Understand Product Warranties

• Warranties are part of the “product”• Know the rules where you do business• Understand that Liability ≠ The Warrantee• Resources:USA: http://business.ftc.gov/documents/bus01-businesspersons-guide-federal-warranty-law

Canada (provincial jurisdictions): http://www.consumerprotectionbc.ca/

Europe:http://ec.europa.eu/publications/booklets/move/64/en.pdf

Product Development Tools

• FMEAFailure Mode Effects Analysis

Identification and ranking of failure modes and effects on the system/customer

• Fault Tree AnalysisAnalysis of probability, hierarchy and failure logic of complex systems to find the paths and the probabilities that contribute to a specific system failure

Contact Center Process/Training

• Call yourself up – how well is tech support supporting your products??

• Ensure staff is included in all aspects of risk assessment and design reviews

• Support the team’s efforts develop processes and training to manage risk

• Empower staff to make front line decisions within a set framework

If Disaster Strikes….

• Lead the company’s response effort– It’s your product and your career…

• Involve all stakeholders – Right from the beginning– Especially your finance team– Involve Senior Management / Leadership

• Over communicate with all stakeholders– Until they tell you to put down the microphone…

BCTIA - Product Management Group – Facilitator

Derek Pettingale – Product Marketing Manager, Schneider Electric - Solar

So now, what do you think about the role of Product Management when things go wrong?