Acuscan Kelly Holds the Following

Acuscan

Kelly holds the following assumptions: Pat does not know about product design; that his team is incapable of managing the workload associated with the product development; that marketing has no idea about what it would take to create such a product; that the company is fine as it is and does not need a new product to ensure its survival.

Pat holds the following assumptions: that the company's programmers can handle the development; that the development will be possible by summer; that the development can be done for under $500,000; that the market will accept multiple iterations of the project. Pat assumes that the company must have a new hit product, and that product development is as simple as it was in the cereal business. Pat assumes that Kelly is being stubborn and obtuse for no particular reason. She assumes that the new product will be marketable. She also holds the value that because she dreamed about this product it is clearly the next big thing for the company.

Cliff holds the following assumptions: that the company needs a new product in order to survive; that the retail version of the scanner is not only deliverable by August but that August delivery is imperative; and he assumes that all other elements of the company's operations are working well -- that only commoditization of their core product is to blame for the company's poor performance.

Chris holds the following assumptions: that development needs to go through Kelly; that Kelly and Pat will be able to work out their differences; that the new product is critical to the survival of the company.

Each individual holds specific arguments in this situation. Cliff's argument is that the project must go ahead. The company has been suffering declining market share and revenues to the point where its survival is now in danger. The retail version of the iScanner is therefore the key to the survival of the company and whatever needs to be done to get this project to market cheaply and quickly should be done. Cliff's argument is more emotional than rational. As CEO, he is ultimately responsible for the success of the company. AcuScan is failing, so Cliff is under pressure of losing his job if he cannot turn the company around. His arguments are emotional because of this pressure. They are also unsound -- he has no evidence that there is a market for this product or that the product is feasible. It is so to him simply because he needs it to be.

Pat argues that the new product is the key to success for the company. She believes that the company has the ability to bring this product to market and that there is a market for this product. Pat's arguments are unsound. She has not taken the time to understand the development process. As well, Pat has not tested the market and is basing her opinions about the product's potential on a test survey about a theoretical product, not even a prototype. Her arguments are emotional in nature. She is new and this is her opportunity to make a big splash. As well, the retail iScanner is her idea so she had an inherent emotional attachment to it.

Kelly argues that the other managers do not understand the product development process. He takes the view that his department is already overworked and therefore cannot possibly deliver this product in the time frame requested, much less on budget. The product, Kelly contends, is not feasible and needs to be reworked. His arguments are sound -- he has the requisite knowledge of product development to make this judgment. There is an emotional element to his arguments, too, however, which have detracted from the case he is trying to make. He is threatened because the other managers have dumped the future of the company onto his lap without providing the resources necessary to make it happen, and without so much as discussing the development plan with him. They simply pushed this idea through out of their own respective self-interest and this has put Kelly on the defensive.

Chris argues that that product is critical to the success of the company, and that Kelly and Pat will need to sort out the details with respect to how best to proceed. There is an emotional element to his argument in that he knows the company needs to turn itself around. His arguments are more sound because he has less direct attachment to this specific product, but the emotion relating to the threat of the company going bankrupt has caused him to place undue expectations on this project.

There are a number of fallacious arguments at work. The first is that this product has been supported by potential customers -- an idea has been supported. A prototype has not been tested, price points not settled, nor functionality defined. The second is that the commoditization of the market has caused AcuScan's decline -- Cliff believes its service function is superior. Without facts to back up Cliff's contention, service or other areas cannot be ruled out as causes of the company's decline. The third fallacious argument is that the company needs this product. It is not known if this product has a market nor is it known that a new product will cure the company's ills. Ultimately, whether the company needs this product or not is undetermined at this point. The fourth is that Pat, Chris and Cliff all argue that this project can be completed on time and on budget. Yet, they have no product development process and do not understand how product development works. They have not consulted Kelly on the matter at all, so they have no basis on which to make this claim.

The main problem in this situation is that the company is failing. Secondary problems are a lack of communication and a lack of willingness to work together -- Pat, Kelly and Chris in particular are guilty of this. A lack of leadership is a tertiary problem. The declining market share proves the company is failing; Cliff's inability to address this and his inability to manage the conflict between his staffers is indicative of his poor leadership. The fights between the others indicate the lack of communication. The underlying problem, however, is that the company is failing and nobody knows how to address the issue.

There are two potential solutions to this problem. The first is that the company could talk to Kelly and get a development plan from him. Then AcuScane could provide him with the resources needed to make it happen. AcuScan could also scrap the plan entirely. The company would then pursue new avenues for saving the firm. The first solution would have the strength of allowing the company to bring this product to market. It would resolve the conflict that Kelly has about the project. This solution, however, would be a significant drain on already taxed financial resources. The second solution would resolve the conflict and focus the company in a more positive direction. A downside to this, however, is that the company would still not have any ideas and still would have no leadership.

I would recommend that the AcuScan abort this project. The proponents support this product based mainly on emotional reasons. There is no demonstrated capability for the company to develop this product, much less market it. There are likely other problems for AcuScan and these should be addressed instead. The company has only cut costs in response to its troubles -- it has not acted strategically. It needs to do that first before chasing dreams.

Executive Summary

This executive summary will attempt to resolve the conflict that is occurring within management ranks at AcuScan in relation to the retail iScanner concept. The situation at present has management divided over the project. Kelly Thomas does not believe that the project's specs, time frame and development budget are feasible. Pat Lambert believes that they are. Chris Martinas believes that the project is necessary for the survival of the company but that Pat and Kelly should resolve their differences.

The key points to consider are as follows. There is no project development plan at AcuScan. The process thus far has been entirely ad hoc. Preliminary testing indicates this project may have a market, but these results are not based on robust study or a prototype product. The cost of developing this project is high, so if the decision is made to pursue this project, we must be able to bring it to completion. As of yet, we do not know what this will cost or how long it will take -- our current figures were created top-down rather than bottom-up and therefore are of little practical relevance.