Managing Biases in Product Development Teams: A Tale of Two Rocks

Abstract

The management of product development teams is a challenging task, especially when success hinges on the ability to guide technical and nontechnical personnel through an effective decision-making process. The “Tale of Two Rocks” exercise illustrates how differing motivations and beliefs about new technologies can affect the decisions developers and managers make in the product development process. In the exercise, the instructor provides a narrative about two very different new products: a novel, nontoxic cleaning solution and a simple rock with amusing packaging. When students complete a questionnaire about the market and profit potential of these new products, individuals with technical backgrounds prefer the high-tech solution, even when they sense that the market is more likely to accept the low-tech alternative. During the debriefing, students learn to both distinguish between a technical accomplishment and a business opportunity and better understand the mind-set of their colleagues.

Keywords

leadership classroom exercises entrepreneurship MBA perception self awareness specialist masters teams/team dynamics product development

Despite the advent of improved models and tools for managing the new product development process, the majority (perhaps even 90%) of new products brought to market are outright failures (Christensen, Cook, & Hall, 2005). Failed products from high-profile firms (i.e., Amazon’s Fire Phone) are excoriated in the news media, while thousands of others fade away quietly each year—sometimes taking their companies with them. Some products may fall victim to factors such as inadequate promotion, but more often development teams simply made poor decisions. For example, in the case of Amazon’s Fire Phone, it was widely reported that most customers simply did not care for many of the built-in features of the product, not that they were unaware of it. In an effort to improve their success rate, a majority of firms have embraced the use of cross-functional interdisciplinary teams in the product development process over the past few decades (Cooper, Edgett, & Kleinschmidt, 2004). However, it has become clear that tightly integrating technical and nontechnical personnel in teams pursuing innovative products can present difficult management dilemmas (Visser, Faems, Visscher, & Weerd-Nederhof, 2014). Understanding these challenges is still an emerging area of study, but the importance of skilled and strong leaders to the success of such teams is evident (Sivasubramaniam, Liebowitz, & Lackman, 2012).

As the importance of technology-based innovative products continues to grow, the need for managers who can bridge the gap between the technical and business realms within an organization will become increasingly acute. This challenge is exacerbated by the fact that unconscious motivations and values with regard to technology and new products can drive critical management decisions during the product development process. Managers must understand that scientists and engineers often mistake a technical improvement for an improved product—effectively solving a problem that no one cared about (Slater & Narver, 1998). It is crucial that they see how implicit assumptions about what constitutes value in a product, which are rooted in intrinsic differences of mind set between developers and managers, can compromise the commercialization of new technologies.

In this article, I present a classroom exercise, the “Tale of Two Rocks,” which was developed to help students gain a better appreciation of how motivations and values with regard to technology can cause firms to misdirect resources toward creating products they assume are desired by the market, when in fact that is not the case.

This exercise aims to build a conceptual bridge between students trained in technical fields and those trained in management fields, helping each group of students appreciate the different values held by the other students. Exercises such as the “Tale of Two Rocks” contribute to the development of “T-shaped” individuals—that is, individuals with deep understanding of a technical discipline combined with a broader knowledge of the business world (Duckro, 2016)—as well as managers who can work more effectively with such individuals, helping them avoid common pitfalls in the product development process.

The Tale of Two Rocks Exercise

A Tale of Two Rocks is an easily communicated exercise with a long track record and nonintuitive results that ties to a number of important points covered in typical courses focused on managing innovation, entrepreneurship, and the development of new products. The “stickiness” of the exercise is evidenced by its frequency of unaided recall by students after they have completed their educational program.

The exercise presents students with a narrative about two very different new products associated with two very different rocks: (1) an enzyme-based stain remover that is used to remove black deposits (“Desert Varnish”) from sandstone rock (see the photo in Table 1) and (2) the Pet Rock^®, made from a common river rock and intended as a novelty gift.

Table 1.

Tale of the Desert Varnish Rock.

Background: “Desert varnish” is a black coating that forms on a surface when acid rain leaches manganese out of porous stone and then oxidizes (forming “manganese oxide”). Desert varnish is merely a curiosity in cases like the sandstone cliffs of Zion National Park, but it causes aesthetic problems for certain brick, limestone, and marble structures or artwork. In such cases, the desert varnish (or more technically, “manganese oxide” deposits) needs to be removed.

Current market solutions: Established methods for removing desert varnish at commercial scale are sandblasting and washing with certain acids. Both approaches have the potential for some destruction of the surfaces being cleaned, since sandblasting erodes the surfaces of softer materials and acid reacts with limestone.

Potential new technology: The chief technology officer for a small company focused on developing products based on fungal enzymes has led efforts to develop a novel enzyme-based chemical solution that can completely dissolve away desert varnish, exposing the native stone underneath. The photograph below shows the results of a laboratory test in which a piece of sandstone was partially immersed in this new cleaning solution, completely dissolving away the desert varnish and exposing the native rock underneath. The solution (termed Desert Varnish Cleaner) is a nonabrasive, environmentally benign, and nontoxic solution.

Supporting material: Photograph of a naturally occurring sandstone rock that was immersed in a proprietary, enzyme-based solution to dissolve away black deposits of manganese oxide (known colloquially as desert varnish).

Over the past decade of using this exercise in a specialized MBA program, I have found that students with technical backgrounds are clearly more “excited” about the Desert Varnish Cleaner, as compared to the Pet Rock, because of its novel technical capabilities. This excitement distracts them from the economic and market realities of the difficulties a company would face in commercializing such a product. In contrast, I find that students with more traditional management backgrounds intuitively understand that the simple novelty item, The Pet Rock, has a much more lucrative market and profit potential as compared to the Desert Varnish Cleaner. However, both types of students often fail to realize that their perspective is different from students with the other background. When teams tasked with new product development fail to recognize these differing perspectives, they can make decisions that lead to catastrophic failures.

Learning Objectives

After completing the exercise, students should be able to do the following

Recognize their own values in regard to new products and understand how these values will affect their decisions in the product development process.

Recognize that other individuals, particularly those with different education and work experience, may have significantly different value systems with respect to new product innovations.

Explain the dangerous role of irrelevant social trends and personal beliefs in influencing management decisions involving product development.

Distinguish between a business opportunity and a technical challenge to improve on an existing product, and be able to assist other team members in doing the same.

Harmonize the misaligned objectives of product development teams and direct their efforts.

Conducting The Exercise

Begin by distributing the printed questionnaire (Figure 1), facedown, with the request that students not turn it over until asked to do so. Set a relaxed tone for the exercise and simply “tell” the class a story about the two rocks (see Tables 1 and 2 for summaries of each rock’s story and photos). For the first rock—the sandstone rock—it is important not to intimate that there is an expressed desire for change in the marketplace as one relays the information about the new enzyme-based cleaning solution to the students. For the second rock, either show illustrations of the Pet Rock or purchase one from an online retailer. Display the packaging and operating manual that is sold with the Pet Rock and read a few passages from the manual (e.g., “Simple Obedience” and “Attack Training” as reproduced in Table 2).

Figure 1.

Student questionnaire.

Table 2.

Tale of the Pet Rock^®.

Background: The Pet Rock is an ordinary river rock that has been smoothed by the passage of grit in water over the course of time. The distinctive features of this rock involve its packaging and associated paraphernalia. For example, a 32-page training manual, “The Care and Training of Your Pet Rock,” is included with the cardboard carrying case complete with straw and breathing holes.

Supporting materials: The following are excerpts from the official training manual to read:

Simple Obedience Training

Simple obedience. Come. It is essential that your PET ROCK learn this command. A rock that doesn’t come when it’s called will cause its owner endless embarrassment. It is assumed that you have given your PET ROCK a name by now. If you have not, do so before proceeding with obedience training.

Attack Training
A rock is a loyal, devoted pet that can easily be trained to protect you and your family. Woe be to the burglar or prowler who ventures into the home guarded by a PET ROCK—or the mugger who attempts to accost a PET ROCK’s master. There are two basic attack methods to teach your PET ROCK. Long distance attacks and close range attacks. (Excerpt from Attack Training, Rock Bottom Productions, 1975.)

After telling the stories of the two rocks, direct the students to complete the short questionnaire as shown in Figure 1. The questionnaire takes the students through a series of questions concerning their opinions on the merits of the two products, their probability of success in the marketplace, and so on. Instruct students to take no more than 1 minute to answer the 10 questions with a simple check mark or circle. Stress that this is not a test of any kind but only an anonymous exercise designed to stimulate discussion, and so students should go with their gut reactions rather than worrying about whether there are right and wrong answers.

Debrief of Exercise

Begin the debrief by asking students about their answers to the first question: “Overall, which do you think is the better new product?” (Figure 1). Students that identify the Desert Varnish Cleaner as the “better” new product are asked why they did so. Students preferring the Desert Varnish Cleaner typically argue that it is “better” because it solved a problem (in their perception), whereas the Pet Rock did not serve such a purpose. Secondary beliefs that may emerge from the discussion are that it is better because it accomplishes some good (by replacing acids with environmentally friendly and nontoxic compounds), and because it aligns with modern trends in those directions. See Table 3 for detailed guidance on debriefing each question.

Table 3.

Debriefing “A Tale of Two Rocks” Questionnaire.

Question	Key points in discussion
Overall, which do you think is the better new product?	1. Solicit a show of hands as to which product students selected (Desert Varnish Cleaner or Pet Rock). Typically, students with technical backgrounds and/or a product development orientation (“Developers”) overwhelmingly (≥85%) tend to answer that the Desert Varnish Cleaner is the better new product.
	2. Solicit the rationale for why it is the better new product. Rationales tend to focus on the Desert Varnish Cleaner solving a problem and having perceived competitive advantages such as being environmentally friendly. Nontechnical students hailing from other functional areas of business (“managers”) will typically be much less skewed in favor of the Desert Varnish Cleaner and will be more attuned to “what sells” and what would be more easily adopted by the market.
	3. Provoke student thinking by asking whether the fact that a product or process can be enhanced from a technical perspective automatically means that there is a problem in need of solving. It is usually helpful to instigate discussion by giving an example in the form of a question, for example, “Is the fact that the 2016 Toyota Prius has a top speed of about 110 mph a problem? Would reengineering that hybrid vehicle to have a top speed closer to 150 mph make it a better product?” The most important goal at this point is to lead everyone to the understanding that while there will always be team members who want to achieve breakthrough results, and their ideas should be acknowledged and will often pay off in the long run, for any particular market there is only an unmet need regarding any performance parameter if the customers will agree that it is a problem in need of solving. Otherwise, the technical improvement does not create a competitive advantage or make it a better product; it is the responsibility of product development managers to control costs and time lines while maintaining focus on the aspects of a new product that will actually affect its success in the marketplace.
	A subsidiary point is that there is almost always a cost to improving some aspect of performance, either in the form of expense or in the required trade offs with other characteristics (e.g., the Prius could be made more crash resistant by adding more metal in the design, but that would make it heavier, more expensive to build and less fuel-efficient), and managers must constantly think holistically when making decisions during the course of their projects. See Christensen, Cook, and Hall (2005).
Which new product would you most like to see succeed?	4. Answers will overlap with the previous question (“it solves a problem,” “environmentally friendly,” and“safer”) because students with product development orientation tend to conflate what they want to succeed with what will succeed.
	5. The significance of the overlap of answers to “Which is the better new product?” and “Which would you most like to see succeed?” is important for students to realize on their own. Point this out by the end of the debrief to ensure that students have come to this critical realization.
	6. Lead students along in these realizations with discussion questions such as: Do trends always indicate a pathway to success? Does the ability to do something that is “different,” such as being environmentally friendly (vs. toxic), inevitably mean that the market is going to consider that solution to be “better?”
	7. Offer counterexamples. For instance, a “Decaf” version of the popular energy drink, 5-hour ENERGY^®, was introduced to the market, but soon disappeared from store shelves.
Which new product would you think most likely to succeed?	8. Students will often state that the Pet Rock is more likely to succeed (it is “inexpensive,” “an impulse buy,” “a novelty item,” and “doesn’t require user to learn anything new”). If necessary, note that these are all aspects of products that make them easier to sell from the point of view of a firm, or perhaps easier to buy from the point of view of the customer.
	9. Ask students what would be involved in bringing the Desert Varnish Cleaner to market. (“Customers will have to be trained.” “Customers will have to change the way that they have been doing things for years.” “Customers will have to be willing to spend more money as the new technology is likely to be more expensive than the existing solutions.”)
	10. At this point in the discussion, some students will already be shifting their thinking to realize that even though they wanted the Desert Varnish Cleaner to succeed, this product faces significant barriers to adoption.
Which new product do you think will be most profitable?	11. Students are likely to realize that the Pet Rock will have high margins.
Which new product do you think will be most profitable?	12. If necessary, point out that as an enzyme-based product with industrial applications, the Desert Varnish Cleaner’s profit margins will be constrained by commodity pricing.
Which new product do you think the market will accept faster?	13. Review the adoption hurdles for each product.
	• Hurdles for Pet Rock: Almost none for an inexpensive, impulse buy.
	• Hurdles for the Desert Varnish Cleaner: Convincing customers that the new technology is effective and cost-competitive with established products, possible regulatory issues, education, and switching costs (as it differs from what the industry is familiar with and what existing infrastructure is built around).
	14. Discuss the likely differences in the adoption curves for these products. This discussion leads nicely into the discussion of how important technology and marketing are to each product.
On a scale of 1 to 10, how important is Technology to each one?	15. Students easily see that the Desert Varnish Cleaner is all about technology, whereas the Pet Rock uses no technology.
	16. Lead discussion about the role of technology in product success. Questions could include “How does technology affect what makes for a good product?” “Is something a good product because it harnesses novel technology?” “Does harnessing novel technology automatically make something a good product—that is, something that the market will accept rapidly and automatically? Or is the technology content relatively irrelevant to the majority of customers?”
	17. Consider giving examples of consumers who are repelled by some new technologies (e.g., self-driving automobiles) as contrasted with people that are attracted to such new possibilities (who are often drawn to careers in product development). Note that individuals attracted to a technology’s ability to solve problems tend to be biased in their perceptions of the potential of a product’s offerings. These perceptions will often be at odds with the way that a manager would look at things.
On a scale of 1 to 10, how important is Marketing to each one?	18. This question is aimed at exposing the common Field of Dreams bias that “If you build it, they will come.” Many technically trained people believe that if something is brilliant, innovative, and solves a problem, then marketing is redundant and unimportant. It is critical to argue that no matter how wonderful something that one has accomplished technologically may be, marketing (and educating your consumer about a new solution) is still of paramount importance in order to get it out into the world.
	19. Marketing is just as important whether it is a Pet Rock or a Desert Varnish Cleaner.
Summary points	• Each question is designed to make students confront issues of biased perceptions and preconceived notions that they tend to carry with them without realizing how influential these thought processes are to their decision making and the potential fallacy of many of these biases. Developers must not allow aspects of concepts that personally excite them (such as a radically improved technology) or what they want to see happen with a new product to influence their judgment of what is likely to happen based on market forces.
	• The exercise illustrates differences between how managers think about new products and how developers think about new products. See Shaw, Shaw, and Enke (2003).
	• It also reveals that both developers and managers will be puzzled, and perhaps even startled by the way the other side thinks. For example, a room full of classic entrepreneurs or business people would likely find this exercise trivial and unnecessary, as it is clear that the Pet Rock would be the superior product, while cohorts of scientists and engineers typically find the ensuing discussion to be a bitter pill to swallow. Just as it is important for developers to recognize their biases, it is important for managers to realize that the developers they work with will see products very differently from them. This exercise illustrates one of the reasons that so many tech-based products (and companies that rely on technology) fail.

The goal of the debrief is not to “answer” the questions for the students, but rather to break down their thinking process and allow students to uncover their own biases. Do not “force” the discussion points, but rather let students discover insights at their own pace. By the end of the discussion of the questionnaire, however, make sure all students have learned the key points of the exercise.

The order of questions as presented in this exercise is purposeful and designed to elicit “gut” reactions and associated subconscious biases. If the series of questions were inverted when presented to students, the answer to which is the “better” new product would likely be influenced, because the later questions effectively prime the students to think differently about the definition of a better new product.

The typical total time for this exercise in a classroom setting with 20 to 30 students is about 40 minutes. In situations involving larger numbers of students, an instructor might try breaking the class into smaller groups who could discuss one of the questions, and then initiate the subsequent discussion of that question during the debriefing by offering their thoughts and conclusion.

After completing discussion of the questionnaire, reveal what actually happened with the two new products. The Pet Rock made millions for its creator as a fad gift, whereas the Desert Varnish Cleaner never made it out of the laboratory, since there appeared to be no significant market for it (see Table 4 for details).

Table 4.

Fate of the Desert Varnish Cleaner.

• Market research revealed that the largest current customer base (contractors and suppliers) did not feel any need to move away from the existing technologies (sandblasting and acid) at their disposal.

• Customers faced no government pressure from regulatory bodies (e.g., OSHA or EPA) to change their approach to cleaning desert varnish type stains.

• The distance from laboratory testing (i.e., dipping rocks into enzyme solution) to commercial application (e.g., foam formulation for spraying on large brick buildings) was too risky for customers not experiencing “pain” from current solutions.

Note. OSHA = Occupational Safety and Health Administration; EPA = Environmental Protection Agency.

Subjects such as product development are often taught with little to no context regarding the roles of leadership and management, but this exercise offers strong connections to those subject areas. The statement that the Desert Varnish Cleaner was the brainchild of the company’s CTO and founder (see Table 2 for the complete story) is meant to plant the seed for a subsequent discussion concerning the management of creative staff. However, in practice this discussion almost always must be initiated by the instructor. When asked whether the company’s president was simply “done” with the issue after making the decision to abandon the project, very few students will identify the looming personnel problem without being prompted with a reminder that the product was directly attributable to the company’s key technical employee. Students commonly overlook the fact that many employees will take the cancellation of pet projects as personal attacks, with subsequent adverse impacts on company culture, relationships, and performance. The ensuing discussion can then segue into the techniques for handling adverse news without creating dissension and lowering morale, such as combining praise for creativity with reasoned discussion of markets and limited resources. I always point out that a key value of structured decision-making tools such as Stage-Gate^® (Cooper & Edgett, 2008) is that they depersonalize tough decisions and thereby avoid personal animosity among team members. The importance of support from senior management and an atmosphere of trust in the decision-making system should also be emphasized.

Classroom Experience With the Exercise

Over the past decade, more than 85% of students have chosen the Desert Varnish Cleaner as the better new product despite the following facts: Only 28% of them thought it the most likely to succeed, only 20% thought that it would be the most profitable, and a mere 12% believed that the market would accept it faster than the Pet Rock! This disconnect is best explained by their responses to the question “Which new product would you most like to see succeed?” In this case, 89% checked the Desert Varnish Cleaner. Such technological bias can make it difficult for product developers to accept that a “silly” product such as the Pet Rock can do better in the marketplace than more sophisticated technologies. In practice, additional demonstrations (detailed in the appendix) have been presented during the same class period to reinforce the key lessons of this exercise, but they could also be used in a subsequent session. This exercise has been administered in a specialized MBA program designed for scientists and engineers, but it could easily be adapted for students with any level of education and experience.

The most dangerous assumptions are the ones that are never challenged, because they are rooted in socially constructed beliefs. That is why it is so easy for executives, team leaders, and developers to miss the fact that people involved in managing and performing the product development process often do not share key assumptions concerning the value of a product. During the 10 years that I have been using this exercise, my management, entrepreneurship, and marketing students have learned a valuable lesson by watching the potential scope and scale of this value misalignment play out in their own classroom.

Footnotes

Appendix

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

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