Don't Overpromise and Under-Deliver

Last Updated Nov 10, 2009 12:01 PM EST

Some executive staff meetings can get pretty heated. I'll never forget one where we fought over a multimillion dollar promotional budget centered on the prelaunch of a major product line. In the middle of the mayhem, one executive asked a very good question.

"Why do we even need all this PR stuff? Why not just deliver the goods?"

"Because," I replied, "The only thing more powerful than delivering a great product is saying you're going to deliver a great product and then doing it."

That was 12 years ago and I don't mind admitting that today, my answer would be different. Indeed, telegraphing the introduction of a potentially breakthrough product in advance is a powerful PR strategy I've employed many times before and since. But the risk of overpromising and under-delivering can, at times, dwarf the potential reward.
First, a pro example: Apple telegraphed the coming iPhone 6 months in advance of its launch, creating media frenzy in anticipation of the device. Of course, the iPhone actually delivered on its promise, and then some. After the fact, it was certainly worth the risk.

Now for some con examples:

Microsoft's Vista operating system had a long development cycle made longer by changes in strategy and several beta releases. The anticipation caused by all the delays did nothing but raise the product's visibility and fuel media hype. Unfortunately, it was negative hype over Vista's compatibility issues. The result was a disastrous launch. It may not have been entirely intentional, but the way the product rollout was handled probably did increase the backlash.

Markets can have high expectationsThere's a company named Tessera that develops technology that makes cell phones and other devices smaller and thinner. Several times in its relatively short 5-year stint as a public company, Tessera's share price fell off a cliff, not due to operating performance, but because investor's expectations got ahead of the company's guidance. Tessera might be better off not giving any guidance at all.

Starbucks CEO Howard Schultz has a characteristic history of setting high expectations for his company's performance. For example, this quarter's earnings call included a statement about the company's prospects in China:

"On a recent trip just this past quarter, I saw firsthand the ongoing emotional connection we've already created with customers. I visited Shanghai, Shenzhen and Hangzhou and was reminded of our early days of growth and development in the US. In each of these very diverse major cities, Starbucks has become part of the daily Chinese ritual."
Anecdotal data tells me that last sentence may indeed be an overstatement. Still, while I have chided Schultz for his overly optimistic spin in the past, the market does appear to be happy with the status of the company's turnaround.

So far.

And that little cautionary statement highlights a peculiar attribute of people - whether they're investors, customers, or your boss. When it comes to promises and expectations, they can have very, very long memories. Longer than yours.