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.

1. 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 – Solar
Lindsay Hardie – Global Product Manager, Schneider Electric - Solar

2. 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.

3. Legal Product Liability
Your Legal Product Liability
≠
Your Guarantee or Warrantee!

4. 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.

5. 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.

6. 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.

7. Managing Product Liability
- Top Mistakes -

8. 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”

9. 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

10. 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

11. 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

12. 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)

13. Product Managers,
where does it all
start?

14. 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

15. Product Development Tools
• FMEA • Fault Tree Analysis
Failure Mode Effects Analysis
Analysis of probability, hierarchy and
Identification and ranking of failure failure logic of complex systems to find
modes and effects on the the paths and the probabilities that
system/customer contribute to a specific system failure

16. 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

17. 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…

18. So now, what do you think about the role of Product
Management when things go wrong?
BCTIA - Product Management Group – Facilitator
Derek Pettingale – Product Marketing Manager, Schneider Electric - Solar