Do Not Overtighten

Do Not Overtighten: Getting too much of a strategically good thing, by Mark Chussil

We will end this essay with a valuable point about costs and prices. We will begin with an enigma about assembling products at home.

As I home-improve my home, I come across products whose directions warn me not to “overtighten” something. This confuses me. How am I supposed to know how much tightening is too much? If something shatters, cracks, or crumbles, I figure I’ve overtightened it, but that information is tardy and not helpful. Remember, I don’t want to undertighten it either. I don’t want it to fall apart and spill a Caution! Awfully Hot! liquid on me.

A pleasant alternative would be “go ahead and tighten until you reach the limits of your strength.” To do that, the item being tightened would have to be strong enough to withstand my formidable strength, and we all know that sturdy is out in these cost-conscious times (which apparently have been in effect for 30 years or so, based on how often we are warned of the delicacy of items about to be tightened).

I think the elegant beauty of “do not overtighten” can only be understood from the perspective of a lawyer. (Your Honors, I hereby state for the record that I am not, have never been, and expect never to be against lawyers. I almost became one myself. Ipso facto. Habeas corpus. De minimis non curat praetor.) Or understood from the perspective of folks in product support, who in turn are dealing with a situation created by cost accountants (about whom I also have nothing against). Let’s replay the scenario.

Customer: “I was putting the product together and it broke.”
Support: “When did it break?”
C: “Sunday.”
S: “No, at what point in the assembly process? Were you tightening something?”
C: “Yes.”
S: “You must have overtightened it. The instructions specifically state not to overtighten it. Bad customer. There is no warranty, express or implied, on overtightened items. We would be happy to sell you a replacement. Want my advice?”
C: “Yes, please.”
S: “Do not overtighten it.”

Businesses tend to overtighten. They do it because they’re led there by simple, persuasive logic, which we can boil down to this: it is cheaper to print “do not overtighten” on the instructions than it is to supply products that can withstand formidable strength. It is even virtuous to do so, because driving excess costs out permits lower prices, which makes customers happy. That’s true. Until we overtighten. Unfortunately, the dividing line between nice-and-tight and overtight is as hard to discern in business as it is in home improvement.

Overtightening in business leads to being unable to get an airline seat for days if your flight is canceled. (See “Police Called to Quell Unruly Passengers at J.F.K.” Notice that the airline blames the weather, not overtightening.) Overtightening leads to being put on hold for hours. Overtightening leads to being vulnerable to hiccups anywhere in a long supply chain. Overtightening leads to nutritional quality gradually being subtracted from food.

Nobody intentionally overtightens. Probably nobody thinks he or she does overtighten. We’re just listening to that eloquent cost analysis showing how much money we lose when there’s an empty seat on an airplane, when phone operators are sitting idle, when we don’t outsource to Mars, and when we compare natural proteins to polyglutamatinousbiphosphorescentcosamine.

You will notice that this essay is not entitled “In Defense of Wasteful Practices.” I am not defending waste; I am in favor of efficiency and productivity. All I’m saying is that cost analysis makes an implicit assumption: if saving $1 is good, then saving $2 is twice as good. It makes another implicit assumption: saving the next dollar is equally good as saving the previous dollar. In other words, the tools we use to gauge the goodness of tightening make it hard to tell the difference between nice-and-tight and overtight.

There’s even an opportunity to create (inadvertently?) a vested interest in overtightening. If a person is paid a percentage of a company’s profits or cost savings, for example, then he or she has an incentive to err on the side of tightening too much rather than too little. That’s especially true if the person doesn’t plan to stay long at the company. We might get the same effect if a person expects much compensation in the form of stock options, because the “benefits” of overtightening (profits are up!) are evident before the downsides kick in (sales and market share are down).

Some companies, notable for their rarity, explicitly reject overtightness. I had a Sears Craftsman ratchet wrench that I broke, perhaps by overtightening some poor thing. Sears offers a lifetime warranty on Craftsman tools. I took the wrench to Sears, found my way to the tool department, and presented the wrench to a friendly Searsperson. I said that I’d bought it a long time ago, far, far away, and it broke. Before the word “broke” had faded from my lips, I had a replacement wrench in my hand, along with a receipt documenting that there was no charge. Similarly, there’s Nordstrom, and LL Bean, and Chelsea Audio Video, which is even more guy-fun than the tools department at Sears.

So how can you avoid that sickening feeling that comes right after you’ve overtightened?

  • Beware of the death of 1,000 tightenings. I believe it was Jay Russo and Paul Schoemaker, in one of their marvelous books about decision-making, who gave a terrific example of how we devolve from nice-and-tight into overtight. (If it wasn’t Profs. Russo and Schoemaker, please correct me.) Imagine that customer surveys show product A is statistically indistinguishable from product B, and product B is indistinguishable from product C, and C from D, and D from E. It does not follow that A is indistinguishable from E. If A through E involve successive minor cuts in quality, it may appear that customers won’t notice or care about each cut, but when you add them all up A is far from E. Think about airlines: an inch of legroom here, a baggage fee there, no more meal service, and pretty soon you just want anesthetics. Available for your convenience for a small extra charge. (Update: see “Airline fees: Where will they pop up next?“)
  • Don’t filter out what you need to see. “Customers aren’t asking for something else,” you say? How do you know? Multiple-choice surveys make it hard for oddball ideas to get through. People with complaints get shuttled to the complaint department, which emphasizes placating; how do the complaints get to R&D? Comparisons with competitors — “we perform in accordance with accepted industry standards” — are meaningless if you and your competitors behave the same way. Which gives creative upstarts the opportunity to beat coasting incumbents. (See Further Reading, below.)
  • Why, oh why? We all make assumptions; the trick is periodically to ask why oh why they work for your business. Here are some examples: We must sell out our capacity; it’s better to sell a perishable good at a low price than to have it go unsold; we should scale capacity to fit peak demand; we should maximize demand; customers are more sensitive to price than quality. I’m not saying those assumptions, and others, are right or wrong. I am saying they are assumptions (possibly supported by data; see Further Reading), and before we continue to risk our businesses on them we should ask why we continue to believe them. I’ve found in business war games I’ve conducted and strategy simulations I’ve built that a good test question is this: will our strategy work if our competitors do the same thing we plan to do?

Competitive strategy. Some assembly required. Do not overtighten.

Further Reading
About overtightening: Gross Galactic Product.

About upstarts versus incumbents: With All This Intelligence, Why Don’t We Have Better Strategies?

About assumptions: House, MBA, More Internet Users than People, and Doesn’t Make Sense.

About being misled by well-intentioned data: It’s Working! and Self-Fulfillment

About the strategy equivalent of the Tower of Babel: Motor Swilling Forbidden.

Update, February 16, 2010: For an interesting commentary on layoffs as an ineffective form of overtightening, see The Case Against Layoffs, by Jeffrey Pfeffer, a professor of organizational behavior at the Stanford Graduate School of Business, published by Newsweek.

Update, May 6, 2010: For a discussion of the effect of the Icelandic volcano on super-efficient transportation and manufacturing networks, see The Days The Earth Stood Still, by Daniel Gross, published by Newsweek. Take what he wrote and add in the time, effort, and money it took to return those networks to normal; for example, stranded passengers waiting additional days. Not to mention the resulting angst. For instance, see Iceland volcano: passengers still stranded vent fury at the airlines.

Update, August 26, 2010: See We’re Mad as Hell, by Daniel Gross, published by Newsweek. He says Bureau of Labor Statistics data suggest “companies may have pushed workers as far as they can go.” “When the BLS reported the second-quarter productivity numbers on Tuesday, August 10, the results were a little shocking. For the first time in several years, productivity actually fell — at a 0.9 percent annual rate. Workers put in more hours, but output didn’t keep up. They simply can’t run any faster.”

Update: About pricing assumptions: “Yes, You Can Raise Prices in a Downturn,” an interview with Benson P. Shapiro (Malcolm P. McNair Professor of Marketing Emeritus at Harvard Business School), Frank V. Cespedes (senior lecturer in the Entrepreneurial Management unit at Harvard Business School), and Elliot Ross (a former McKinsey consultant and President of The MFL Group in Beachwood, Ohio).

Update, December 21,2010: Air travel is severely snarled in Europe due to snow. According to an article on CNN.com, European Commission Vice President Siim Kallas, the EU’s top travel official, “took issue with airport infrastructure which he said was the ‘weak link’ in the chain, and urged airports to ‘get serious’ about planning for severe weather conditions.” Overtightening, overconfidence, or both? By whom?

Update, January 6, 2010: Today the Wall Street Journal reported that American Airlines wants to save about $3 per flight by selling more of its tickets directly to consumers rather than through “global distribution systems” such as Sabre and online travel agents. The move could make it more difficult for customers to comparison-shop with other airlines. Also, CNN.com reported on possible airline fees that might appear in 2011: infant fees, in-person check-in fees, credit-card fee, baggage fees by weight and distance, and carry-on bag fees. Debatable whether it’s overtightening, regular old tightening, or a profound (mis?)understanding of pricing psychology.

Update, January 27, 2011: The Wall Street Journal wrote about Cookie Cutters: Girl Scouts Trim Their Lineup for Lean Times. Management of the Girl Scouts of America think it’s a good move to reduce cookie varieties. Bakers and many Girl Scouts disagree. The issue is perhaps less about the numbers and more about the way one views and interprets the numbers.

Updates, May 20, 2011: CNN.com posted two overtightening-related stories on May 16, 2011. One that hints at further overtightening in the airline industry and one that holds out some hope for “premium flyers.” The former is Fewer Hubs Mean Fewer Options for Fliers. The latter is Little Planes Get Big Seats.

Update, October 24, 2011: David Carr, in The New York Times, writes about an egregious form of overtightening in Why Not Occupy Newsrooms? He points out how media companies (Gannett, owner of USA Today, in particular) have overtightened their staff, costing tens of thousands of jobs, hurting their stock price, and not helping their customers, but enabling them to pay large bonuses.

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Who Doesn’t Like Airbags? | Advanced Competitive Strategies

[…] Third, many automakers initially resisted the safety improvements. Due, perhaps, to what I call spreadsheet thinking, where costs are easy to see while benefits are hard to see. Spreadsheet thinking can unintentionally encourage companies to make shortsighted decisions. (See ”Do Not Overtighten.”) […]