March 3, 2024

Volkswagen’s toxic innovation is just the tip of the iceberg

Toxic innovations are harmful to customers. They can harm them by changing products, services, or behind-the-scenes business processes. It can either be a deliberate act of greed or the result of a benign but misguided intention. Or it could be a completely unpredictable and indirect outcome. It can ultimately damage or destroy an organization.

Clumsy companies

VW is not the only innovation story where skills used to create genuinely successful products were put in service of narrow financial objectives that had damaging effects. These impacts are not all deliberate, conscious, or pre-planned.

Seen better days. Nomad Tales CC BY NC-ND

This phenomenon is often the result of a troubled corporate culture. This rotten business culture was also exposed when banks were recently accused of manipulating the LIBOR interbank loan rate. The LIBOR rigging itself was highly innovative and involved a lot of creative activity. The rigging was illegal, and the impact of this on banks and world economies is still being felt today.

VW’s environmental cheat, which involved software that could fool emissions tests, allowed cars to pollute without anyone knowing. Volkswagen was warned not to do this. However, the extent of this deception in the company’s higher echelons has yet to be revealed.

The software was potentially innovative, but it became toxic for the environment and the Volkswagen brand. The case also revealed that emission tests themselves could benefit from real (and nontoxic) innovation.

Design to fail

Another example is the concept of ” planned Obsolescence“. All good innovations involve testing products to determine how and when the product will fail. This is important for product maintenance, safety, and replacement. When companies are accused of deliberately designing products to fail or making them more difficult to repair, it does not feel as if their ingenuity is devoted to the consumers.

Hakan DahlstromCC BY

This idea was brought to light recently when a Harvard Study raised questions about whether Apple’s operating system update was slowing iPhones during a period when product upgrades were available. New software can load new features that demand more resources, which can slow down systems. This is part of the appeal for technology companies to try to lure customers to upgraded products constantly. The customers who thought the iOS9 update was slowing down older phones were wrong. However, the suspicion can damage a brand’s reputation.

There are growing evidence to suggest that consumer electronics companies are increasingly focusing on innovation in order to make it more difficult for products and devices to be repaired. It is possible that if clever design by manufacturers of smartphones were used to cripple older phones and force us to upgrade by stealth, the scandal would be similar to that which has beenfall VW.

Innovation or intrusion?

Facebook’s share price was 4% lower when its platform went offline for several hours. This is not the first time. Engineers were credited with crashing the network due to small, incremental innovations. It was an unintentional mistake, but it did a lot to damage Facebook’s reputation for being a social media platform that is always on.

Its attempts to introduce an alleged innovation called the Year in Review and change a core component of its platform (the “timeline”) resulted in a significant negative impact on the brand. Users began to see photos that they would have rather forgotten to appear under their noses. The phrase “inadvertent algorithmic cruelty” was coined as a way to describe the situation. The firm was also forced to apologize.

Not so Sunny Delight

Facebook’s attempt to improve its service was a technological failure, but the marketing innovations are perhaps more damaging.

Sunny Delight, an orange juice drink for kids, was promoted to parents as healthy and fresh. When parents found out that it was artificially colored sugar water, the brand disaster began. Sales crashed.

Designers in the backroom of this product engaged in all sorts of product innovation to trick consumers into thinking that this drink is healthy and filled with orange juice goodness. The bright packaging with oranges, the color, and the taste of this product were all a scam.

VW is not the only toxic innovation. To keep consumers’ trust, corporations will need to eliminate poisonous innovation from their innovation activities. Unfortunately, more and more stories emerge in which corporations are using the same skills that they use to bring us great products and services to cheat, deceive, or simply try to be clumsily intelligent. This results in damage to everyone involved in the supply chain.

Volkswagen’s case proves that these attempts, or at least those we learn about, are massively false economies. Innovations are more likely to be successful over the long term when they are conscious, linked to real customer benefits, and create trust and confidence.

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