The complaints started small but rapidly escalated. Management came off as clueless and callous and the critics piled on. Seemingly overnight, a crisis was born.
Try Intel, 1994.
In October of that year, Professor Thomas R. Nicely, then teaching at Lynchburg College in Virginia, discovered a flaw in Intel's chip. He posted his findings on a cyber bulletin board, hoping others might know what was causing the problem. A few weeks later, Intel got first wind of the problem after the trade journal Electronic Engineering Times ran a story prior to Thanksgiving.
It was the beginning of a corporate boondoggle that remains seared in Intel's and the industry's collective memory.
"We started to address the report but it wasn't looked upon as any ultra-big problem because within the industry, everyone knew there were errata on chips and that you do work-arounds and fix them," recalled Howard High, who handled Intel's communications in the matter.
But this time the old playbook didn't work. The World Wide Web was now attracting attention and the story spread over the transom in a way that caught Intel off guard. Looking back, Intel's dilemma was amplified by the success of its "Intel Inside" push on television and other media. That campaign did a great job fostering brand recognition for a computer chip of all things. It also fostered a perceived relationship with consumers and they were unhappy.
"We were following our normal procedures for dealing with this but the story hit the Internet--which until then had been used by fairly technical people. Now a new set of people were participating." (One side note: Andy Grove, at the time Intel's president, did not have a direct Internet account. One of the company's engineers actually posted statements for him.)
When people returned to work, the festering resentment that built during the long weekend spilled over.
"We were floored. For average users, our engineers told us that the problem would not even manifest itself in an actual outcome. Users might experience it once every 27, 0000 years," High recalled.
What Intel failed to understand at the time was the implied promise it was making. Story after story dinged management for being out of touch as Intel inexplicably failed to understand that consumers were holding it to the implied promise of its advertisements.
It took about a month but Intel eventually recognized that beyond an engineering problem, it was dealing as much with a communications and customer support challenge. Eventually, Intel agreed to set aside $475 million to swap out the chip for any PC owner who sought a replacement P5, an expensive lesson for a company where engineering's dictates had pride of place.
It's the consumers, stupid
Chuck Mulloy, a current Intel executive who then worked for rival Advanced Micro Devices, noted that the days when companies could make decisions without keeping their ears to the ground are over.
"You really have to pay attention," he said. "If you have a relationship with consumers, then you have to realize there are expectations. The customer won't always be right but you have to treat them with respect."
But old dogs sometimes do learn new tricks. When Intel discovered a glitch with a chipset used with its "Sandy Bridge" microprocessors in January 2011, the company jumped all over it. Intel stopped shipments and put a fix in place. The news barely caused a murmur and then disappeared from the news cycle.
Lesson learned--at least at Intel.
But though the Intel P5FDIV bug was supposed to be a turning point for an industry forced publicly for the first time to confront consumer expectations, not to mention their sometimes easily-bruised feelings, two decades later it doesn't seem that way.
Nowadays the newsy issues revolve around Internet privacy and security. And there's no shortage of concern about whether the tech industry is doing its best to protect user interests on both counts.
The recent fuss surrounding Path--the company's iPhone app was found to upload and store user address book data onto its servers--captured a lot of attention in the last week. Dave Morin, the CEO, subsequently apologized and said the company deleted any personal data that had been uploaded to its servers. But not before getting hammered for initially coming off as insufficiently concerned. Then there was the revelation that a company called Pinterest was making money by adding tracking code to certain user pins without notifying its users.
Humans being human, fact is that memories are notoriously short. But there's another reason why old habits in the tech industry linger: Job No. 1 for engineers is to invent new technology and figure out what it can do for their companies. Full stop. Most of them--and yes, I'm generalizing--can't spend anywhere near the same number of brain cycles worrying about privacy implications or scenarios where consumers might have different expectations. (Mark Zuckerberg being Exhibit A.) It's the rare tech impresario who can do both.